Property settlements and equitable distribution is a complex issue for couples going through a divorce. Individuals may feel overwhelmed and not know where to begin when dividing up marital assets. Below you will find six frequently asked questions our family law attorneys in Charlotte get asked regarding property settlement and equitable distribution:
1. My wife inherited $30,000.00. Am I entitled to any of the money if we separate?
The usual answer is no. An inheritance is separate property and is not distributed upon the breakup of the marriage. However, if the money was intermingled with marital funds and the funds were utilized, prior to separation and there is no way to determine which funds were used and which funds remain in the account, the law treats the funds as marital and thus subject to distribution. Note if something is purchased with the separate funds and titled jointly, that absent a writing establishing the separate character of the purchased property, it too will be deemed marital property. Note however, that her separate estate may be a factor in determining the distribution of the marital estate.
2. I have a house that is almost paid for and am getting married next week, should I put the house in both names?
If you wish to maintain the separate character of the house in the event you separate, then no, do not place the house in joint names. Note that any monies that are earned during the marriage (marital funds) that are expended on the house (note payments, taxes, insurance, improvements, etc.) will create a marital interest in the house in proportion to the values of the separate monies and marital funds that went into the property.
3. Well, I put $60,000.00 from my pre-marital 401K on my house and after marriage placed the house in our names; can I get any of the money back if we separate?
Possibly yes. Although the house is marital property and the net value is assumed to be divided equally between spouses, you are entitled to some credit for the separate funds that went into the house. You will most likely not get a dollar for dollar credit; you are simply entitled to a factor which is calculated as to all the marital estate (not just the house). This factor is in the discretion of the judge and will usually amount to a small percentage if the factors (there are many) are in your favor. You may end up with a higher percentage of the marital estate that takes into account your separate contribution; this may amount to between ten and thirty thousand dollars.
4. What about my engagement ring? Can I keep it?
An engagement ring is separate property as it is usually given before marriage. Thus, you need not return the ring to husband and its value is not calculated into your marital estate upon separation. If the ring is a family heirloom, husband may purchase the ring back from you for some value or other consideration; or you can be nice and just return it to him because it was his great-grandmother’s ring.
5. My wife of 25 years gave me 1,000 shares of Microsoft 20 years ago for my birthday. That is my separate property, right?
Unless the gift was accompanied by some spoken or written intent to make it your separate property – “Happy Birthday, hope you enjoy the stock, oh, by the way should we ever separate, I intend for this to be your separate property” – it will be marital property. Gifts from spouses are marital property and are subject to distribution.
6. How can I learn more about this topic?
You can read Chapter 50-20 of the North Carolina General Statutes to find out more about these and other topics of equitable distribution; or contact the knowledgeable family law attorneys at Weaver, Bennett & Bland, P.A. We will be glad to help you navigate all the issues of property settlement.