Real property is typically the most valuable investment that married couples make jointly. Many families in North Carolina own their family homes, and both spouses likely contribute toward their mortgage each month. Families may also have a vacation home at a nearby lake or possibly even in another state where they get away during the summer or the winter holidays.
Some married couples invest in real estate together to repair and flip houses for profit or to earn passive income as landlords. What happens to marital real estate holdings when a North Carolina couple divorces?
Equitable distribution rules allow for creative solutions
Some North Carolina couples can work out their own property division agreements. Others will disagree so fiercely on the details that going to court will be the only viable means of resolving their property division disputes.
When couples go to court, the equitable distribution standard requires that a judge find a fair way to divide their property based on family circumstances. The judge will consider numerous factors including:
- individual income
- separate property
- child custody arrangements
- the duration of the marriage
- financial and unpaid contributions to the household
Each of those considerations can influence what a judge believes would be appropriate for the family when dividing their property. Real property, being among the most valuable assets, will often receive the most consideration.
In some cases, one spouse might keep certain properties while the other keeps different real estate. For example, one spouse might keep the primary residence while the other retains the vacation home, and then they divide other assets to reflect the difference in values between those two properties. Occasionally, the sale of some of the properties and the division of the revenue generated will be the best approach.
In a scenario involving real estate owned for business purposes, one spouse might keep most or all of the properties while compensating the other spouse for their interest in those assets. When the case goes to court, the spouses have no control over the final terms. If they negotiate a settlement, they can potentially decide for themselves and keeps which home as long as they both agree that the final outcome is fair.
Recognizing that there are numerous viable solutions for dividing the value of each piece of real property included in a marital estate can help spouses set more informed goals for their high-asset divorce and increase their chances of successfully negotiating a settlement rather than going to court to litigate their differences.