As people get older, their finances can get more complicated. For older couples in North Carolina who divorce, there are several potential complexities in the process of property division. One of these is calculating alimony. In addition to a salary, the individual who pays alimony may have additional income from an executive compensation package or stock options.
Since North Carolina is an equitable property state, assets are supposed to be divided fairly but not necessarily equally. Couples may want to try mediation instead of heading straight into the more adversarial process of litigation. After decades of marriage, it can often be difficult to determine what counts as separate and marital property. For example, inheritances are usually considered individual property, but if the inheritance has been mingled with marital property over the years, it could be classed as shared property.
If alimony payments are part of the agreement, the payer might carry a life insurance policy. This ensures that the other spouse can still receive compensation if the payer dies. In marriages that have lasted for at least 10 years, a lower-earning spouse could draw on the other spouse’s Social Security benefits after retirement. A retirement account may also be divided in a divorce, but it is important to understand its values and rules around division.
There are a few things to consider when looking at the value of a retirement account. One is whether there will be taxes on withdrawal. If the retirement account is a 401(k) or a pension plan, a document called a qualified domestic relations order must be prepared before it can be divided. Retirement funds might need to be rolled into an IRA. For some couples, having each partner take certain assets may be easier than dividing them. A lawyer could help a divorcing spouse through this process.