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How will my property be divided in a divorce? - II

In our last post, we began discussing how one of the more contentious issues for divorcing couples is property division, and how those unable to reach some sort of agreement on how to divide their assets -- and debts -- will have a court decide for them in accordance with the principles of equitable distribution.

In today's post, we'll continue our examination of property division here in North Carolina, focusing on the differences between marital property, divisible property and separate property.

What is marital property?

As you might imagine, marital property is anything acquired by the couple during the course of their marriage and up until the day they officially separate. This includes not just houses, cars and home furnishings, but also things like retirement accounts, pensions and deferred compensation rights.

What is divisible property?

This category is designed to account for those scenarios in which the value of marital property changes from the time of the separation all the way through distribution.

By way of example, consider property that was earned during the marriage, but which wasn't realized until during the separation such as a commission or a bonus. Similarly, consider a marital bank account or stock account, and any interest payments or dividends issued during the separation.

It's important to note that any gains or losses in the value of property that can be directly attributed to the post-separation actions of one spouse are not considered divisible property. Indeed, if a spouse owes a casino several thousand dollars after going on a post-separation gambling spree, the obligation would be theirs alone.

What is separate property?

Separate property is any property that was acquired by a spouse prior to the marriage, or property acquired during the course of the marriage that was meant solely for one spouse, such as an inheritance or gift. It can also include property acquired through the sale or exchange of separate property that remains separate (i.e., no comingling).

We'll continue this discussion in future posts, including examining the factors considered by courts when dividing property.

If you would like to learn more about property division or just have questions about how the divorce process works, please consider speaking with a skilled legal professional.