Marital vs. Separate Property Rule

Property division is one of the biggest (and often most contentious) issues that couples must resolve when they divorce. There are laws that guide the division of marital vs. separate property in North Carolina. There are also rules in place to prevent spouses from making major financial decisions while a divorce case is pending.

Epperson Law Group, PLLC, has more than 70 years of combined experience in divorce law. Keep reading to learn more about dividing assets and how a property division lawyer with our firm could help you protect your rights.

How does North Carolina divide property in a divorce?

North Carolina law recognizes three different types of property in a divorce: separate property, marital property, and divisible property.

Separate property is property acquired by each spouse prior to the marriage. It also includes inheritances received and gifts given by third parties during the marriage (but gifts from one spouse to the other generally do not qualify). Because separate property belongs to one spouse and not the other, it is not divided during a divorce. Each spouse gets to keep the separate property that belongs to them.

Marital property is property acquired during the marriage and before the date of separation. It can include property purchased by both spouses together, or by one spouse or the other. Marital property is divided. If spouses cannot determine a way to do this through divorce settlement negotiations, they may have to go through a divorce trial, in which the court will decide on property division.

Divisible property includes certain increases or decreases to marital property occurring from the time of separation to the date of property distribution. At distribution, divisible property and debts are valued and allocated between the spouses.

Courts seek to divide marital property and divisible property equitably, which does not necessarily mean equally (i.e., 50/50). Equitable distribution is the fair division of property, based on the unique aspects of each divorce case. According to N.C. Gen. Stat. § 50-20, judges must consider several factors when determining equity. These include, but are not limited to:

• The length of the marriage
• The income, property, and liabilities of each spouse
• The health and age of each spouse
• The contribution of each spouse to the acquisition of marital property, including contributions as a spouse, parent, income-earner, or homemaker
• Contributions by each spouse to the other’s education or career development
• Each spouse’s efforts to maintain or improve the value of marital property

When should you start thinking about property division?

Divorce is emotional, and often, property division can be a major source of conflict. Naturally, each spouse wants to protect their financial stability and have as many resources as possible as they begin the next chapter of their lives. Fights over homes, business interests, and bank accounts are not uncommon. For some spouses, it may be tempting to take actions to financially benefit themselves, such as moving money or assets, but the law prevents this.

Unlike in some other states, North Carolina does not have automatic temporary restraining orders (ATROs). These are orders that automatically go into place when one spouse files for divorce. They force both spouses to maintain the financial status quo until the divorce is final. ATROs generally prohibit either spouse from:

• Selling or transferring assets, including real estate, vehicles, or valuables
• Giving away assets
• Hiding assets
• Making changes to insurance plans, including life, health, and auto
• Naming new beneficiaries on retirement accounts, pensions, or insurance plans
• Stopping payments on rents, mortgages, utilities, taxes, and other property-related expenses
• Incurring unreasonable new debts

To get a restraining order of this type in North Carolina, you must petition the court. You will need to show that there are grounds for the request, such as a risk that property may disappear, be wasted, or be converted.

What happens when a spouse violates property division rules?

When a spouse violates a restraining order or other property division rules, they can face consequences, including contempt or, if the conduct is independently criminal, criminal charges for other applicable offenses.

If you believe your spouse has violated a court order or is improperly handling marital funds and assets during your divorce, you should ask the court for appropriate relief. The court will review your motion, and if it finds your spouse has violated an order or improperly wasted, devalued, or converted property, it may order appropriate relief, and in some cases, fees or sanctions.

Additionally, if your spouse acted illegally, they may face criminal charges. For example, your spouse cannot vandalize or destroy marital property. These acts are crimes, and if found guilty, the spouse who committed them may be sentenced to fines, jail time, and other penalties.

How to prove a property rule violation occurred

If you are divorcing and believe your spouse has violated a financial restraining order or taken other improper financial actions, you should file a motion in court immediately. You should then contact a property division lawyer who can help you prove your case.

For a layperson, proving a property division rule violation can be extremely challenging. It usually involves following a complex paper trail or digital accounting trail. And the spouse in violation may have taken steps to hide their wrongful actions, making it even more difficult.

An experienced divorce lawyer can enlist financial accounting experts who are skilled in finding financial irregularities and proving that rules have been broken. Attorneys and financial experts can also help you evaluate the financial impact the violation has had on you, including providing a valuation for vandalized or destroyed property. Your lawyer will then use this information to seek appropriate relief on your behalf.

Contact Epperson Law Group today to learn more

You have rights, protected by North Carolina law, when it comes to property division during a divorce. Each spouse must obey marital vs. separate property rules, including any orders that freeze the financial status quo. If you believe your rights have been violated, you can and should take action to protect yourself and your future.

Epperson Law Group, PLLC, handles divorce and property division, as well as a wide range of other family law matters, including child custody, child support, and alimony. No matter where you are on your divorce journey, we can help. Contact us today to learn more about our services. We speak English, Spanish, and French, and have several offices conveniently located across the state.