Can Equitable Distribution Mean Unequal Division in North Carolina?

Equitable distribution in North Carolina is presumed to mean an equal split of marital property, but what happens if this division is unfair or unjust?

Dividing Marital Property in North Carolina

Assets and debts are considered marital, separate, or divisible property. Marital property can be included in the division of property during a divorce, while separate property is not included. Divisible property can be challenging to categorize because it may or may not be distributed.

Either spouse can file for equitable distribution before a final divorce decree is entered. The judge then looks at various factors to determine how best to divide property, including:

• The length of the marriage
• The age and health of both spouses
• Both spouses’ income, property, and debt

When Equitable Does Not Mean Equal: Smith v. Smith

Equal division of property is strongly favored in North Carolina divorces, and this can be seen in many cases throughout the state. However, equal division is not always equitable, as in Smith v. Smith. In this case, the Court of Appeals affirmed a lower court’s order that the parties’ property should be divided unevenly.

The wife in the Smith case had become recently unemployed and was receiving unemployment benefits and Social Security benefits. The husband owned and operated his own business, but he was working less due to his health and paid himself a salary of $30,000. The parties both owned the marital home, and the husband owned another property purchased before they married.

Most of the expenses associated with the marital home were paid for by the husband, and he used an inheritance from his grandmother and a line of equity from his separate property to finance the construction of the marital home.

The trial court made the following determinations:

• The husband’s separate property was valued at $179,239.27
• The wife’s separate property was valued at -$195
• The marital home was awarded to the husband

The husband was awarded the net amount of $217,189.44 in property and debt, while the wife’s total net amount was -$7499.20. The wife appealed.

It was stated by the Court of Appeals that only one of the 12 distributional factors outlined in North Carolina General Statute § 50-20(c) is required to award an unequal distribution of property. The trial court had determined that the evidence supported at least one of the distributional factors, and the decision on appeal was that the trial court’s ruling of unequal division was affirmed.

When one spouse receives more assets in a divorce, it may seem unjust, but 50/50 is not always the fairest or most equitable option. How the facts of a case are presented can make a significant difference, and a Greensboro divorce attorney can be an invaluable resource during this process.