Articles Posted in Property Division

Published on:

By

Dear Carolyn,

I have a family member who is separated. Before the separation, this person purchased a house with the deed only in her name and the deed of trust in both names. How will the courts view this property for equitable distribution? My family member thinks that since the property is only in her name that the other party has no rights under equitable distribution. Can you explain the difference between Deed and Deed of Trust?

Thanks

 

Carolyn Answers:

This is a very interesting and quite technical question. So, thank you for writing.  I’ll start first with the definitions of deed and deed of trust.

A deed is the ownership or title documents; by analogy, your car title is a title document for a car like a deed is the title document to your home. Thus, the deed states who owns the home, and generally on the deed the owner is referred to as the grantee. This ownership document (deed) is registered at the Register of Deeds.

A deed of trust is the security for the debt or Promissory Note. When you buy a home or get an equity line on your home, you sign a Promissory Note to the lender. At the time of borrowing, you also sign a document called a deed of trust as security (a lien); if you do not pay the Promissory Note, the signatures on the deed of trust allow the lender to foreclose on the home and take the home away from you. If you examine the deed of trust, you will notice that the lender is the beneficiary of the deed of trust, and that there is a trustee. It is the trustee that forecloses if the Note is not paid. When the Note is completely paid, the lender is required to cancel the deed of trust on the public record at the Register of Deeds. We are one of about twenty states that use the “deed of trust” system.  The majority of states use a “mortgage” system.

Continue reading →

Published on:

By

Dear Carolyn,

My wife and I have been married 20 years. Our child is graduating from high school this year, and we are miserable.  We own a home with lots of debt and we cannot afford to separate without selling our home first.  We both work, but there simply is not enough money to maintain two households without first selling the house.  Is there any way we can declare ourselves separated and maintain the same household until the house sells?   Why is the North Carolina waiting period for divorce a year?  I hear that one year is a long time as compared to other states.  Can we settle our property now?  We have retirement, cars and furniture, along with the house?

 

Carolyn Answers:

Generally, North Carolina requires 365 days of separation, with the intent of one spouse to live separate and apart forever, before a spouse may apply to the court for an absolute divorce. Separation in this state means, literally that the spouses, during separation, must have separate residences and essentially, conduct themselves as single for the entire 365 days. Isolated incidences of sexual intercourse, such as a weekend at the beach with an estranged spouse, do not start the 365 day period over.

Continue reading →

Published on:

By

Dear Carolyn,

I am involved in an equitable distribution case and I have a closely-held business in the Triad, which was started by my father. He still owns the majority of the business.  Eight years ago, my father gave me twenty-five percent of the business. I separated from my husband eight months ago. What can I expect in my divorce case related to my closely held business?  How do we go about getting a appraiser to appraise the business?  Can he get any of my stock in the family business?

 

Carolyn Answers:

 You ask a complex, but very interesting, question.  Rest assured that he cannot get any of the actual stock in your family’s business.  The stock itself is separate property because it was given to you by your father.

Continue reading →

Published on:

By

Dear Carolyn,

My wife and I have been married almost two years. Recently, and unfortunately, her grandmother passed away. Her grandmother had no immediate means to pay for funeral and burial services. The costs were paid by my wife and me on our credit card. The family has considerable land assets in Guilford County, but it is in her grandmother’s and multiple siblings’ name. My wife will inherit a portion of her grandmother’s land (split with my wife’s uncle). No one in the family has the means to buy us out, and, as is often the case, there is no reachable agreement by the family to divide the land. Is there any way to sell off some or all of what my wife is entitled to help reimburse us for the costs of the funeral and burial services?

Thanks for your helpful insight,

Jon D.

 

Dear Jon,

We have a solution for you!  The property can be sold to pay funeral and burial expenses, but there are several steps you must follow.

The answer assumes there was no Will, as a Will was not mentioned.

First, your spouse will need to go to the Clerk of Court, Estates Division at the Guilford County Courthouse if the grandmother died in Guilford County and open an estate file for the grandmother. If the grandmother died in another county, you need to open the estate file in that county.  Someone is going to have to qualify as the administrator of the estate.  Your wife, as a granddaughter, may apply; others may also apply, but hopefully they will not.

Continue reading →

Published on:

By

Dana M. Horlick, Attorney, Woodruff Family Law Group

Whenever you become a party to a lawsuit, whether you are the Plaintiff or the Defendant, there are deadlines imposed by the Court, by statute, and by the Rules of Civil Procedure that are important to follow. There are deadlines whether you are in Guilford County, North Carolina or Fulton County, Georgia. Missing such a deadline could severely impact your rights.

For a real life celebrity example, let’s look at Phaedra Parks – star of Real Housewives of Atlanta – and her jailed husband, Apollo Nida. The couple were married in 2009 and separated in 2014.

On December 1st of this year, Apollo Nida filed a Complaint against Phaedra Parks, seeking a divorce, along with joint legal custody of the minor children and an equitable division of all of the personal property, assets, and marital debts.

However, back in November of this year, the parties were granted a divorce, after Nida failed to respond to Parks’ divorce petition. Parks filed for divorce in March of 2015 and subsequently was divorced in November. The judge also awarded Parks custody of the parties’ two children. Nida will have visitation rights once he completes the eight-year prison sentence he is currently serving for bank fraud and identity theft.

Now consider if this situation happened here in Guilford County. Once the parties remain separated for one year, either of the parties can file for divorce, which Parks does. Once the Plaintiff has effectuated service of the divorce complaint on the Defendant, the Defendant has 30 days to respond. The 30-day deadline is according to the North Carolina Rules of Civil Procedure. To extend this deadline, the Defendant can file a Motion for Extension of Time and receive an extension, as long as the deadline has not already passed. Now in the case of Parks and Nida, Nida never filed an Answer and never sought an extension of time.

Continue reading →

Published on:

By

13062458_1042739802458603_2436945721037467362_nBy: Dana M. Horlick, Attorney, Woodruff Family Law Group

 

Now let’s change the hypothetical of our Greensboro couple – Petunia and Rocky – in one respect. Recall that Petunia’s parents wanted her to have a premarital agreement regarding Home Grown Lawn Care, but Petunia and Rocky did not sign one. Maybe a few years into her marriage, Petunia realizes that she wants to keep Home Grown Lawn Care in the family and that Rocky and her parents just do not get along. So Petunia executes a will, leaving her shares of Home Grown Lawn Care to her parents and the remainder of her estate to Rocky.

Under this scenario, Petunia’s parents would receive her shares of Home Grown Lawn Care, valued at $125,000.00. Rocky would receive the 401(k) worth $15,000.00. Rocky may decide that he is entitled to a larger share of Petunia’s estate. He can then exercise the right to elective share, which is a two-step calculation. First, you have to determine what percentage of the total net assets the surviving spouse receives. Second, you have to determine the amount of the elective share, based on the percentage calculated in step one.

Let’s take this step-by-step. The North Carolina legislature has determined that the percentage of the total net assets should vary based on the length of the marriage. Thus, the longer the marriage, the higher the percentage of the total net assets. The below chart shows the percentages, based on the statutory language in N.C.G.S. §30-3.1:

 

Number of Years Married Share of the Total Net Assets
Less than five years 15%
At least five years, but less than ten years 25%
At least ten years, but less than 15 years 33%
15 years or more 50%

Continue reading →

Published on:

By

13062458_1042739802458603_2436945721037467362_nBy: Dana M. Horlick, Attorney, Woodruff Family Law Group

 

Now that we have the details and definitions out of the way, we can return to our Greensboro couple Rocky and Petunia and take a look at what happens to Petunia’s estate. Recall that Petunia died without a premarital agreement, without children, and without a will. Since Petunia died without a will, this means that she has died intestate, and her property will pass via intestacy, with Rocky as the administrator of her estate. Also recall that Petunia died with an interest in Home Grown Lawn Care worth $125,000.00 and a 401(k) worth $15,000.00, of which Rocky is the beneficiary. Also, Petunia died in a car accident five years into the marriage – this will be important later on.

Without a will, the share of the surviving spouse is governed by statute. There are other factors to consider, though, namely is the decedent (Petunia) survived by any children or her parents? The presence of either surviving children or parents reduces the share of the surviving spouse under the statute. In this case, there are no children, but her parents survive Petunia.

N.C.G.S. §29-14 (a)(3), provides for the surviving spouse’s share of   the real property as follows: “If the intestate is not survived by a child, children or any lineal descendant of a deceased child or children, but is survived by one or more parents, a one-half undivided interest in the real property.” Based on those facts, and the statute, Rocky gets ½ undivided interest in the real property. Under the facts of our hypothetical, there is no real property, meaning that Rocky gets ½ of nothing. If for example, Petunia owned a parcel of land, Rocky would get ½ of that parcel, and her parents would get the remaining half.

Continue reading →

Published on:

By

13062458_1042739802458603_2436945721037467362_nBy: Dana M. Horlick, Attorney, Woodruff Family Law Group

 

Have you wondered how much of your estate is your spouse entitled? What happens to all of your assets when you die? Do you have much control over the disposition of your estate? Does having a will make a difference? To demonstrate the nuances involved in determining how much your surviving spouse is entitled to, I am going to set up a hypothetical, with a Greensboro couple – Rocky and Petunia.

Petunia owns 40% of a closely-held business started by her family, Home Grown Lawn Care, and will likely inherit another 11%. Petunia’s brother will inherit the other 49%. Petunia is engaged to Rocky, an engineer with a promising future, who has joined an engineering firm. To set up the financials, Harry makes $70,000.00 per year. Petunia, as a Vice President for Home Grown Lawn Care, has a salary of $60,000.00 per year and typical K-1 dividends of another $25,000.00 per year. Petunia also gets a tax distribution to pay the federal and state income tax on the K-1 distribution.

Neither Petunia nor Rocky have been married before, have any children, or have any college debt. They do, however, have the following assets: there are Petunia’s shares in Home Grown Lawn Care valued at $100,000.00; a 401(k) with $10,000.00 for Petunia; and a 401(k) with $10,000.00 for Rocky.

Continue reading →

Published on:

By

              By Carolyn Woodruff, North Carolina Family Law Specialist, CPA, and CVACarolyn

I am constantly amazed at how people going through a divorce “fight” over “stuff” like a tea cup, a train set, a doll, or a stuffed animal. Generally, when I am using the word “stuff,” I mean personal property like tables and chairs, jewelry, or sentimental items from childhood.  The items have very little monetary value usually (some jewelry and collectibles excepted).  Sometimes the items have great sentimental value.  So, why the fight?

The columnists “Soapbox” in the Sunday magazine Wall Street Journal inspired me to contemplate personal property and its role in our lives.  Jay Leno was one of the columnists, and he talked about his one hundred and fifty cars and one hundred and seventeen motorcycles, all in working condition.  He likes the story behind his cars.  Pat Cleveland considers expensive items “meaningful” and indicia of success, perhaps why so many like Louis Vuitton purses.  Someone commented on behalf of Barbie, the Mattel doll, who states her accessories of a Corvette or outfits create imagination.

In a divorce, anger and striking out at the other side frequently takes the form of snatching and holding hostage a special, sentimental item.  So as a boy, perhaps you collected fishing lures.  The lures bring back memories of special travel and times, but have no monetary value.  There is the pink trout lure that grandma bought you when she took you to the Colorado mountains to fly fish for trout.  Priceless!  And in your divorce, your ex-wife wants to make it an earring.  Oh boy!  Continue reading →

Published on:

By

A premarital agreement is a contract, signed by two persons who are about to be married. It sets forth rules that will apply when the marriage ends, either in death or divorce. It can also set forth rules to govern how the parties will deal with their property during the marriage.

Married persons do not have to sign a premarital agreement. The law already provides rules for dividing property and awarding support upon divorce, and rules for dividing property upon death. If the two people do not have a premarital agreement, these normal rules apply. The purpose of a premarital agreement is to contract out of the normal rules, and to apply different rules in their place.

To understand whether you need a premarital agreement, you need to first understand the rules that will apply if you do not have an agreement. If those rules are acceptable to both parties, there is no need to sign a premarital agreement. If those rules are not acceptable, and the spouses can agree upon a different set of rules that they both like better, there is reason to sign a premarital agreement.

The rules that apply without an agreement vary from state to state. This blog post will discuss the rules that apply to division of property upon divorce, and why spouses might want to sign an agreement that applies different rules.

In North Carolina, when a marriage ends in divorce, the court divides the parties’ property into two categories. “Separate property” which is usually property acquired before the marriage, or property acquired by gift or inheritance during the marriage. Separate property is not divided upon divorce. “Marital property” is everything that is not separate property, and it is divided equitably between the spouses. The presumption is that an equal division is equitable, but the presumption can be rebutted by proof that another decision is fairer.  See generally N.C. Gen. Stat. (“G.S.”) § 50-20.

Continue reading →