If you have a property division/equitable distribution matter in Wake County, North Carolina, Attorney David Schiller can represent you during the process.
Equitable distribution is the legal term for dividing property between divorcing spouses. The purpose of equitable distribution is to “divide property equitably, based on the relative positions of the parties at the time of the divorce, rather than on what they may have intended when the property was acquired.” The judge at an equitable distribution hearing is required to conduct a three-stage analysis: (1) classification; (2) evaluation; and (3) distribution.
The court will first classify the property into three categories: (1) marital; (2) separate; and (3) divisible.
Marital property is “all real and personal property and divisible property acquired by either spouse during the course of the marriage and before the date of separation of the parties.” At the time of divorce, the spouses have an interest in approximately half of the money that was earned over the course of the marriage.
Separate property is defined as “all real and personal property acquired by a spouse before marriage or acquired by a spouse by bequest, devise, descent or gift during marriage.” Separate property of the parties is taken into consideration when making an equitable distribution, but is not subject to division between the parties. Rather, the separate property of a party remains the sole and separate property of the party at the time of dissolution.
Divisible property is a hybrid of marital property and separate property. In essence, divisible property is either an increase in the value or income of marital property through no effort of either party, property received after the date of separation but as a result of marital efforts and increases and decreases in marital debt.
The court will divide marital property and divisible property between the spouses. Although there is no precise formula for dividing the property, the court usually tries to divide the property equally.
Qualified Domestic Relations Orders
Retirement investment and pension plans make up a substantial percentage of marital property. Couples initiating divorce often underestimate the importance and value of retirement assets. The entirety of retirement savings and/or pension earned during the duration of the marriage is marital property, subject to an equitable division. Qualified domestic relations orders (shortened to “QDROs” and pronounced “quadros”) permit the division of ERISA-qualified retirement plans subsequent to divorce without penalty to the participant spouse.
The duration of the marriage is usually the determining factor to whether a couple should file QDROs rather than calculating a “buy-out” of the half interest. Because QDROs are detailed and cumbersome to draft, the “buy-out” option is generally preferred.
Contact Attorney Schiller
Attorney David Schiller practices family law in Wake County — divorce, child custody and support, alimony, post-separation support, separation, pre-nuptial agreements, name changes, and appeals.
You are welcome to contact us regarding your family law issue.
To schedule a consultation to discuss a family law issue, please telephone us at (919) 789-4677 or complete the contact form below.
