How Are Assets Divided in Executive Divorce in North Carolina?

For high-net-worth individuals or those who have complex financial situations, pursuing a divorce in North Carolina may bring up many questions, including, “How are assets divided in North Carolina?” Understanding North Carolina’s equitable distribution laws can help shed light on the most optimal way to protect your wealth and secure your financial future following a separation.

How Are Assets Divided in High Asset and Large Estate Cases in North Carolina?

With the divorce rate in North Carolina around 2.7 per 1,000 people, it is important to understand what a separation can mean for your finances.

Property division during a divorce is addressed under NC. Gen. Stat §50.20. Once a divorce petition is filed, both parties are required to provide a thorough list of assets and debts held by each, whether it is under individual ownership or joint ownership.

Courts are then tasked with determining which assets and debts are marital property, separate property and divisible property, what their value is, and how they should be divided.

Marital property includes any real or personal property that was obtained by either party during the marriage and prior to the separation period before the divorce was filed. Retirement accounts, pensions, homes, and even a business can be considered marital property.

Separate property includes any real or personal property either party owned prior to marriage that still exists on the date of separation or property received via inheritance during the marriage, and is not subject to equitable distribution, with few exceptions.

Divisible property means any appreciation or reduction in the value of marital property after the separation but before distribution of property. This includes appreciation or depreciation of marital assets, passive income from those assets and changes in debt.

The net value of the marital property and divisible property is then divided among both spouses.

When determining property division, courts do not simply split assets in half without further consideration. The division is based on the following factors: 

• The duration of the marriage
• Whether either spouse has a large separate estate
• Each party’s custodial responsibility if there are children
• Each spouse’s contribution to the marriage
• Each party’s behavior during the divorce (i.e., concealing assets)

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How to Protect Your Interest in a Large Estate Divorce

A divorce can place a significant financial burden on both parties, even those who are involved in a large estate divorce. Data from 2022 revealed that newly divorced individuals saw a 12% decline in their income within 12 months of their separation.

If you are worried about losing your financial security when entering into a divorce process in North Carolina, there are steps you can take to protect your interests:

• Challenge the court’s definition of property. Only marital property and divisible property can be split in a divorce. You may be able to show that an asset is a separate property, including assets obtained prior to the marriage and those that were obtained following a separation.
• Get an expert’s valuation. Determining the value of complex assets like business, equity compensation, and intellectual property may require expert valuation to ensure that asset division is both fair and accurate.
• Utilize forensic asset tracing. If you suspect a spouse has hidden and transferred assets, a forensic asset tracing expert can assist you in uncovering these assets and help prevent the other party from evading their financial obligations.

You may also be able to gain the upper hand in your divorce as it pertains to asset division by entering the negotiation and mediation stages with a structured proposal that can benefit both parties while protecting your interests and providing strong evidence in front of a divorce judge in support of your specified asset division proposal.

FAQs

What Is the Division of Assets in a Divorce in NC?

In North Carolina, both marital assets and distributive assets are subject to equitable distribution.  Marital assets are those that were obtained during the marriage and before the separation, including commingled assets that were purchased with separate property. Divisible assets are those earned during the separation from the efforts of either spouse before the distribution of assets.

Assets may be split 50/50 unless the court determines the arrangement is not equitable.

What Is a Stay-At-Home Spouse Entitled to in a Divorce Settlement in NC?

Each party in a divorce, regardless of their gender, is entitled to a fair share of the net value of marital assets and, in some cases, spousal support. If a non-earning spouse made significant contributions to the marriage, such as raising children or putting their career or education on hold to support their spouse’s career, they may be entitled to a larger portion of the marital assets and alimony.

Who Has to Leave the House in a Divorce in NC?

There is no law requiring either of the spouses to leave a house in a divorce in North Carolina. However, a couple cannot file for divorce in North Carolina unless they have been living separate and apart for more than one year. A spouse may be required to move outside of a marital home if there is a 50B order issued against them for domestic violence.

What Is the Ideal Way to Split Assets in a Divorce?

The ideal way to split assets in a divorce is to pursue a division that is fair and reflects the contributions you have made to the marriage. If there are children involved, the split should also take into account the financial well-being of the child while they are living with one or both parents.

Asset Division Is Not Always Straightforward in High Income and Large Estate Cases in North Carolina

If you are going through a divorce in North Carolina, especially a high-net-worth divorce, you should learn about all aspects of the process, including how property is divided. Though North Carolina splits assets in an equitable way, this does not always mean that it is a 50/50 split. How property is defined, asset appraisal, who has custody, and the contribution of each partner in the marriage are all factors that can influence the way the assets are distributed.

Avoid making a critical mistake in your divorce that can result in significant financial loss. Consult a skilled divorce attorney from Plumides, Romano & Johnson, PC, to learn more about how your assets may be split during your divorce and the steps you should take to ensure that the process is fair and accurate. Amy R. Howard, a partner at Plumides, Romano & Johnson, PC and Certified Family Financial Mediator, has served as a zealous advocate for her clients for almost thirty (30) years and has been a mediator for over eleven (11) years.  Her experience in litigating and mediating high asset cases can help facilitate a resolution for your divorce.  Schedule a consultation today.  Hablamos Español.