Equitable Distribution and Alimony Ruling Explained

A North Carolina Court of Appeals decision in the Face v. Face (2024) case addressed many key points in separation court proceedings, including equitable distribution and alimony, as well as procedural issues such as subject-matter jurisdiction and correction of clerical errors in domestic law.

As such, Face v. Face is practically a case study in its own right, serving as an important reminder not only for people going through a separation but also for legal professionals practicing family law, which is why we will dissect it in this article.

Background

The Face v. Face case emerged from a post-separation dispute, primarily over marital property, including business interests and trust assets. The trial court also decided on alimony, which was also called into question upon appeal.

The North Carolina Court of Appeals affirmed the trial court’s decision in part, reversed it in part, and remanded it in part. As such, this case illustrates the complexities of family disputes and the challenges courts face when evaluating property and equitable distribution in divorce cases.

Marital Property and Business Interests

The central issue in Face v. Face concerned the equitable distribution of marital property, including a minority ownership interest in an L.L.C.

Under North Carolina law, specifically N.C. Gen. Stat. § 50-20(a) (2021), the court must classify property as either marital, separate, or divisible before determining any equitable division. In Face v. Face, the court saw that the business ownership was marital property. However, the defendant argued that the court erred in calculating and distributing the marital share of the business ownership.

In the second instance the court upheld the classification, viewing the business ownership as marital property, but it identified a clerical error in the mathematical calculations of the marital portion. The case was remanded in this part solely to recalculate the computational mistake, and is upheld in the substantive part.

This is an important legal concept as it shows that simple clerical errors may be corrected without overturning an otherwise proper equitable distribution analysis made by the trial court.

Subject Matter Jurisdiction and Rule 60(b) Motion in Trust Property Disputes

One of the main dispute points revolved around property placed in a revocable trust. The defendant claimed that the trial court lacked subject-matter jurisdiction to distribute trust assets, arguing that the trust itself had not been formally joined as a party to the proceedings.

The appellate court rejected this position, clarifying that when a spouse retains control over a revocable trust, those assets can still be considered as a part of the marital estate. As such, the trial court has correctly retained authority to classify and distribute the trust property, as it was revocable and controlled by one of the parties.

This opinion highlights the principle that marital assets cannot be shielded from equitable distribution by placing them in a revocable trust.

Alimony Determination and Appellate Review Standards in North Carolina

The last key point challenged by the defendant was the alimony amount.

In N.C., alimony determinations require findings on dependency, the supporting spouse’s status, income, expenses, and the marital standard of living. The trial court made its alimony decision primarily on the financial disparity between the parties.

The appellate court affirmed the decision, finding that the standards of review were well established. The second instance court upheld the decision, as the trial court made sufficient findings supported by appropriate evidence. There was no abuse of discretion, and the alimony duration was appropriate.

This part of the decision shows that the appellate court will stand by the trial court’s decisions when they are legally sound and supported by quality evidence and factual findings.

Bottom line

Overall, Face v. Face serves as a meaningful precedent in North Carolina family law. This decision alone highlights the nuances of precise asset valuation in equitable distribution, shows that parties cannot hide assets in revocable trusts, and underscores the importance of factual evidence in alimony decisions.

But the complexity of Face v. Face also demonstrates the importance of working with family law experts who understand the intricacies and delicate nature of family law and separation proceedings.

Woodruff Family Law Group’s clear, direct legal advice helps you understand your legal standing, enabling you to navigate the separation process without unnecessary headaches.