Summary of Division of Property in North Carolina

North Carolina is an “equitable distribution” state. This means that all property owned by one or both of the spouses is considered to be in one of two categories: “marital property” and “separate property.”

“Separate property” acquired by a spouse before marriage or by way of inheritance or as a gift from a third party during the course of marriage, typically will be retained by the original owner of the property in a divorce. Property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance.

That which is deemed to be “marital property” is subject to “equitable distribution.” That is, it is split between the spouses in a way that the court deems to be “equitable” (assuming the parties do not agree between themselves about how they wish to split up the marital property). Note that equitable does not necessarily mean equal or 50/50. Rather, it means that property will be split in a way that a court believes to be fair or just.

A court may consider the following factors (and others, as found in section 50-20(c) of the N.C. General Statutes) when deciding how to distribute marital property in an “equitable” way:

  1. The income, property, and liabilities of each party at the time the division of property is to become effective.
  2. Any obligation for support arising out of a prior marriage.
  3. The duration of the marriage and the age and physical and mental health of both parties.
  4. 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.
  5. The expectation of pension, retirement, or other deferred compensation rights that are not marital property.
  6. 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.
  7. Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse.
  8. Any direct contribution to an increase in value of separate property which occurs during the course of the marriage.
  9. Any other factor which the court finds to be just and proper.