Asset Division in Divorce: How Does It Work?
From the time we were children, we’ve all had trouble with asset division. How do I split this piece of cake evenly? My friend and I both want the same toy, but who should get it? Of course, dividing up a piece of cake is nothing compared to asset division during a divorce. The process can spike already-raised tensions, as it can be difficult to determine who is “deserving” of what. How do couples divide their property without having a meltdown?
Even if it seems impossible, with a patient mindset and the right planning, you can survive your asset division process!
What are my first steps?
Before dividing your assets, you and your soon-to-be-ex-spouse need to list them all out. This includes your home, vehicles, valuables, bank accounts, retirement plans, and any other individually or joint-owned property. It’s important that couples are as honest and thorough as possible with this process to avoid bumps down the road. Next, the division procedure can begin. If you and your ex are managing the split somewhat amicably, you may be able to begin the division process on your own. At the very least, you can start determining what items will be deemed “separate property” and which items will be deemed “divisible property.”
North Carolina legislation defines separate property as “all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage” (the complete definition is a little lengthier, but this highlights the basic points). If you know your husband’s mother gifted him a bookshelf before your marriage, you can easily label that item “his.” Your divisible property will introduce the real challenge.
What happens when we disagree?
Many couples will work with attorneys to knead out the complexities of divisible property, such as valuing and splitting a joint-purchased house or car. Ideally, you and your ex-spouse will want to work out the division of these items without entering a courtroom, which can cause a steep increase in the cost of a divorce.
And if we still can’t agree?
When attorneys can’t negotiate an agreement, the next step for most couples is court. Unfortunately, there is no way to determine which spouse will end up with the house or the car or the dog. NC courts aim to divide all property equally, but if judges ascertain that an equal divide is not possible, they will examine the details of the divorce to determine the most equitable outcome. Some of these details include:
- The duration of the marriage and the age and physical and mental health of both parties.
- The need of a parent with custody of a child or children of the marriage to occupy or own the marital residence and to use or own its household effects.
- The expectation of pension, retirement, or other deferred compensation rights that are not marital property.
- Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services, or lack thereof, as a spouse, parent, wage earner or homemaker.
- Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse.
An exhaustive list of these details can be located on the NC Legislation website.
We know that asset division can be a tough and time-consuming part of a divorce. If you have further questions about the process, join us for our monthly workshop.