Divorce is a complex and emotionally draining process, especially when it involves the division of property. In North Carolina, like many states, the division of marital assets must be equitable, which does not necessarily mean equal. Understanding the common issues that arise can help you navigate this difficult time more smoothly. Three prevalent property dispute issues during divorce include the following.
#1: Identification of marital versus separate property
One of the first hurdles in a divorce property dispute is distinguishing between marital and separate property. In North Carolina, marital property includes all assets and debts acquired by either spouse during the marriage. In contrast, separate property refers to assets acquired before the marriage, through inheritance, or as a gift to one spouse alone. Marital assets often include home(s) purchased during the marriage and vehicles bought during the marriage as well as joint bank accounts and their contents
You can mitigate the risk of a dispute over an asset’s designation by obtaining clear documentation. This is especially true when attempting to establish that an asset qualifies as separate property. Having documentation to establish its origin and that it was not commingled with marital funds can help to mitigate the risk of a dispute.
A prenuptial or postnuptial agreement that clearly defines what remains separate property is also a helpful tool.
#2: Valuing the property accurately
It is important to get accurate valuations for high worth items. This can include the family home, vacation properties, and business interests as well as other complex investments. It is wise to hire independent appraisers for real estate and business and to use financial experts to assess the value of investments and other financial assets.
These professionals can help provide a fair, market-based valuation of the assets, reducing the likelihood for disputes over perceived inequalities in asset division.
#3: Dealing with the family home
The family home is not just a major asset but also an emotional symbol in many marriages. Deciding who gets the home can be one of the most contentious issues in a divorce.
Options for handling the family home include:
- Selling the home and dividing the proceeds.
- One spouse buying out the other’s interest.
- Agreeing to continue co-ownership for a specified period, especially if children are involved.
Each option has legal and financial implications. Those who are going through a divorce should consider their long-term financial stability and emotional well-being when deciding on the future of their family home.
Navigating property disputes during a divorce in North Carolina requires a clear understanding of the law, careful planning, and often, professional guidance. By focusing on defining property types, working to better ensure accurate valuations, and carefully considering options for the family home, you can mitigate many common issues. Remember, the goal of equitable division is to ensure a fair outcome for both parties, which ultimately supports a smoother transition into post-divorce life.