Equitable distribution is available in North Carolina divorces whenever either party requests it. The court will determine the most equitable division of assets and debts, which is not always an equal split. Determining the most equitable distribution of the spouses’ property involves various factors, including:
- Income of each spouse at the time of property division
- Assets and liabilities of each spouse at the time of property division
- Support obligations from previous marriages
- The duration of the parties’ marriage and their health
- Pension, retirement, and other deferred compensation considered to be separate property
- Contributions by one spouse to the education or career of the other spouse
- Direct contributions to the increase in value of separate property
There are many more factors that courts may use to determine the most equitable way to divide property.
In some cases, property may be distributed to one spouse before the divorce matter is finalized, and this can impact the valuation of that property.
Lowder v. Lowder
Equitable distribution and valuation of the former marital home were at the center of Lowder v. Lowder. Wife appealed from an equitable distribution order, challenging the trial court’s findings of fact, as well as its classification and valuation of the parties’ former marital residence.
The Court of Appeals chose to dismiss four of Wife’s five arguments, but the fifth argument that the appellate court did hear centered around classifying and distributing divisible property, namely the marital residence.
The appellate court agreed with Wife that the lower court did not follow the necessary statutory mandates when making determinations regarding the marital home. The Amended Equitable Distribution Judgment and Order entered by the trial court stated that the value of the marital home was roughly $419,926 at the date of separation and $555,000 at the date of distribution. The court credited this increase to market conditions and classified it as divisible property.
However, the Court of Appeals notes that the lower court erred in this determination. According to North Carolina General Statutes, once the former marital residence was distributed to Wife by order, it became her separate property and was no longer marital property. The date of distribution was the appropriate date for all subsequent valuations. The changes in value that occurred after that date were Wife’s separate property and not subject to equitable distribution.
The appellate court reversed the Amended Equitable Distribution Judgment and Order in part and remanded it to the trial court for further proceedings regarding the valuation of the marital residence.