Divorce with Multiple Properties in Raleigh, NC

Recent research suggests that nearly 6 million properties in the U.S. are considered “second homes.” When a divorcing couple shares multiple properties, the asset division process can be more complicated than it may have been with just one shared home.

Second homes and investment properties can be some of the most important assets to consider during divorce negotiations. That means – when push comes to shove – it’s absolutely vital to handle these divisions with care. Here’s a brief explanation of how North Carolina courts deal with multiple properties in a divorce case and an exploration of how an experienced Raleigh divorce lawyer can help you safeguard your most valuable assets in the long run.

How does North Carolina divide property in a divorce?

While some states take a standardized 50/50 approach to asset division during a divorce, North Carolina bases these decisions around what is fair based on the unique circumstances of a case. Negotiations may begin with the assumption of an equal split. But that assumption is just a starting point. Ultimately, the court can consider all relevant factors to arrive at a final division decision that reflects an equitable distribution of marital property.

This distribution approach applies to property (like shared homes) as well as liquid assets and debts couples acquired over the course of their marriage. That means any homes you and your spouse purchased while married (even if only one of your names is on the title) could be subject to equitable division under North Carolina law.

Separate property vs. marital property: What’s the difference?

As you might have noticed, North Carolina’s equitable distribution approach applies specifically to marital property but not necessarily to separate property. That means certain assets a spouse acquired before marriage may not be subject to division under the law.

There are a few important exceptions here. First, gifts clearly intended for one spouse may be treated as separate property under the law. Similarly, if one spouse receives an inheritance while married, their inherited assets may not automatically be subject to division.

Finally – and importantly – even if an asset was obtained prior to the beginning of a marriage, the court may consider it at least partially marital property if the value of said property increased due to joint marital efforts. That means if you bought a home prior to getting married and later flipped the house with your spouse’s help (or with shared marital funds), that house may be treated as marital property during the asset division process.

This is a particularly important consideration for couples who own multiple properties or who use their properties for investment purposes. When you take into account appreciation and invested funds, even seemingly “separate” property may have a marital component subject to division during negotiations.

What kinds of properties can be divided in a divorce?

Even the most well-informed clients may be less than clear about how the classifications above play out in practice. Here are a few examples of properties that may be considered marital and subsequently subject to equitable distribution in a North Carolina divorce:

• A shared primary residence: If a couple bought a home together and used it as their primary residence during marriage, this property would likely be treated as marital property in a divorce.
• Vacation homes: If a couple purchased a vacation home while married or made significant improvements to a vacation home that was previously owned by just one spouse, some or all of the value of the home could be subject to division.
• Rental or investment properties: Properties purchased with marital funds may be subject to equitable distribution under North Carolina law if equitable distribution is properly requested before or during the divorce process.
• Undeveloped land: If a couple purchased land without any additional structures constructed upon it, this property would likely still be subject to equitable distribution due to its status as marital property.

All of these properties can bear significant value and become the cornerstone of determinations about asset division. Because the end goal is to ensure that both spouses receive a relatively fair split of assets, the court considers factors such as each spouse’s income, liabilities, and earning capacity when determining an equitable division of property.

Experienced divorce lawyers often partner with financial planners, accountants and property appraisal experts to help their clients develop a clear and accurate picture of their financial position prior to divorce. The more reliably you can estimate the value of your marital assets, the more prepared you and your representation may be for any negotiations that take place with respect to property division.

What happens to shared properties after a divorce?

Once the court determines an equitable split, shared properties are handled in accordance with the court’s order or an approved agreement. While there is certainly no one-size-fits-all strategy here, these are some of the most common approaches:

Sell and divide the proceeds

Sometimes, the easiest thing for ex-spouses to do is sell their shared properties to generate liquid assets. From there, they can split the profits in accordance with the split mandated by the court.

One spouse keeps the property

The court will generally take into account the entire value of a couple’s shared property. Sometimes, one spouse may be able to retain ownership of one or more shared properties and compensate the other spouse with cash or other assets to balance out the split in accordance with the court’s requirements. Keep in mind that this scenario would likely require refinancing on the part of the spouse who plans to retain ownership in order to relieve the other partner of their mortgage obligations.

Spouses trade or swap properties

Sometimes, spouses can each keep one or more of their shared properties if the value of their properties will satisfy the court’s mandated split. Spouses may be able to swap or trade properties as part of their negotiations until they arrive at a satisfactory division.

Spouses arrange for co-ownership

A common approach in dealing with shared investment properties involves setting up co-ownership agreements. These agreements allow both spouses to maintain ownership of one or more investment properties but provide specific guidelines for property management, income distribution and the handling of profits from any future sales.

Spouses will need to decide on their preferred approach based on what aligns best with the court’s requirements as well as the potential impact on the couple’s tax liability, liquidity and overarching financial goals. An experienced divorce attorney can advise their clients on which approach might make the most sense based on the unique facts of their case and advocate for the best possible outcome during negotiations.

Final thoughts

In a growing area like Raleigh, it’s not necessarily unusual for married couples to share more than one property. While these assets may be a source of financial security during a marriage, they can also pose some additional challenges in the event that a couple decides to get divorced.

At Epperson Law Group, PLLC, we understand the complex nature of dividing up multiple properties in an equitable distribution state like North Carolina. That’s why our experienced team of Raleigh divorce lawyers works so hard to provide clients with the information and guidance they need to make clear-headed decisions about their most valuable assets during what can be a strenuous and emotional time.

If you are considering a divorce in North Carolina but are concerned about how owning multiple properties may impact the process, give us a call today or fill out our online contact form to schedule a free consultation with a member of our team.