Fayetteville Equitable Distribution Lawyer

Factors For Equitable Distribution

1. Income, Property, and Liabilities at the Time of Division

The first factor involves examining each party’s income, property, and liabilities when the division of property becomes effective. This can impact the division decision as it helps to illustrate the financial standing and obligations of each party.

2. Support Obligations from Prior Marriages

The court considers whether either spouse has any support obligations arising from previous marriages. Such obligations can influence the financial resources of the party, potentially affecting the distribution.

3. Duration of Marriage and the Health and Age of Both Parties

Longer marriages may result in more intertwined finances and thus, can potentially lead to a more equal distribution. The age and health of each party can also impact the division, particularly if one party has greater financial needs due to health issues.

4. Needs of a Custodial Parent

If one party has custody of a child or children from the marriage, the court could consider the custodial parent’s need to occupy or own the marital residence and household effects. This could influence whether they receive a greater share of these assets.

5. Expected Pension or Retirement Rights

Any expected pension, retirement, or other deferred compensation rights that are not marital property are also considered. This provides a fuller picture of each party’s future financial circumstances.

6. Equitable Claims to / Interests in / Contributions to Marital Property

The court will look at each party’s contributions to enhancing/increasing the value of the marital estate’s property and obtaining marital property, whether financial or otherwise. This includes joint efforts or expenditures and financial or “in kind” (i.e., via non-monetary efforts such as labor) contributions to marital property.

7. Contributions to the Other Spouse’s Education or Career

If one spouse contributed to the education or career development of the other, this could be considered in the distribution. This reflects the fact that the benefiting spouse may now have an enhanced earning capacity.

8. Contributions to an Increase in Value of Separate Property

Any contribution that led to an increase in the value of separate property during the marriage is also a factor. This acknowledges the efforts of a spouse that may have supported the financial growth of the other by contributing the increase in value of the other spouse’s separate property.

9. Liquid or Nonliquid Character of Property

The nature of the property, whether it is easily convertible to cash or not, is also a factor. This helps to ensure that each party receives a mix of assets that suits the spouse’s needs and circumstances.

10. Difficulty in Evaluating Certain Assets

If certain assets, such as interests in a business or profession, are difficult to evaluate or would be economically beneficial to keep intact, the court takes this into account. This helps to preserve the value of these complex assets. 

11. Tax Consequences

The court will also consider the tax implications for each party if the marital and divisible property were to be sold or liquidated. This factor can significantly affect the net benefit each party receives from the distribution.

11a. Actions Taken Regarding the Property Post-Separation

The court examines the actions of each party in relation to the marital property after separation. This includes efforts to maintain, preserve, develop, expand, waste, neglect, devalue, or convert the property. 

11b. Property Considerations in the Event of a Spouse’s Death

If a spouse passes away before property distribution is ordered, the court considers property passed to the surviving spouse by will or intestacy, joint tenant property, proceeds from life insurance or retirement accounts, and the right to claim an “elective share.”

12. Any Other Just and Proper Factor

Finally, the court retains the discretion to consider any other factor it deems relevant to ensure a just and proper distribution. This allows for flexibility in addressing any unique circumstances that may arise in individual cases.

Understanding these factors and their potential impact on the division of marital property is crucial in navigating the equitable distribution process in North Carolina. As an experienced family law attorney, I can help you understand these factors and their implications in your case. At Gary Britt Law, I will work tirelessly to ensure that you always have the knowledge and guidance needed to receive the fair and equitable distribution of your marital assets that you deserve.

More About Temporary Restraining Orders And Preliminary Injunctions In Equitable Distribution Cases

In Equitable Distribution cases, parties often seek to obtain temporary restraining orders (TROs) and preliminary injunctions as a means of protection during the legal process. These court orders can be powerful tools in helping to preserve assets and prevent further harm after the parties separate but before the parties’ property issues are resolved. While temporary restraining orders and preliminary injunctions are not just similar but interrelated, there are key differences between the two, and it is important to understand how they can be used in North Carolina equitable distribution cases.

What is a Temporary Restraining Order (TRO)?

A Temporary Restraining Order (TRO) is a type of court order that is intended to keep things the same (“as is”) and prevent harm or further harm from occurring during the pendency of a legal dispute before a hearing on a longer injunction can be held. A TRO is usually granted for a short period of time, usually up to 10 days, and can be issued without notice or with short notice (as in hours) to the opposing party. To obtain a TRO, the party seeking the order must demonstrate that immediate and irreparable harm will occur if the TRO is not granted. This harm must be serious and not able to be repaired or adequately compensated through other legal remedies.

A TRO is an initial, short-term step taken before a hearing to obtain a preliminary injunction that keeps the protections (like those from the TRO) in place until the entirety of Equitable Distribution issues are resolved.

What is a Preliminary Injunction?

A Preliminary Injunction is a type of court order that is intended to preserve the status quo and prevent harm or further harm from occurring during the pendency of a legal dispute. Unlike a TRO, a preliminary injunction requires notice to the opposing party and a hearing in front of a judge, and these hearings often occur within ten days following issuance of a TRO. To obtain a preliminary injunction, the party seeking the injunction must demonstrate that there is a substantial likelihood of success on the merits of the case, that irreparable harm will occur if the injunction is not granted, and that the balance of equities favors the party seeking the injunction.

The Difference Between a TRO and Preliminary Injunction

The main difference between a TRO and a preliminary injunction is the process by which they are obtained. A TRO can be granted without notice to the opposing party (or with unusually short notice, as in two hours or notice instead of the normal five or more days) and is intended to be a short-term remedy. A preliminary injunction, on the other hand, requires notice and a hearing and is intended to be a longer-term remedy that remains in place until the case is resolved. Additionally, the standard for obtaining a preliminary injunction is higher than that for obtaining a TRO. To obtain a preliminary injunction, the party seeking the order must demonstrate a substantial likelihood of success on the merits of the case.

How Can Temporary Restraining Orders and Preliminary Injunctions be Used in North Carolina Equitable Distribution Cases?

In North Carolina equitable distribution cases, TROs and preliminary injunctions can be used to protect assets and prevent further harm during the legal process. For example, if one party is dissipating (i.e., selling off, hiding, spending/wasting away, being negligent, etc.) assets or engaging in other harmful behavior, a TRO and/or preliminary injunction can be obtained to prevent further harm and preserve the status quo. 

Different Districts Have Different Rules

It is important to note that different districts in North Carolina may have different local rules regarding the use of TROs and preliminary injunctions in equitable distribution cases. It is essential to have an attorney who is experienced and knowledgeable in dealing with the rules of local districts and the judges in those districts. An experienced attorney will be able to navigate the local rules and procedures and provide effective representation in court.

More About Pensions, Investments And Retirement Plans

In North Carolina, vested and non-vested pensions, retirement benefits, investment plans and deferred compensation rights earned during the marriage are typically considered marital property. That means they are subject to equitable distribution. It includes pensions, 401(k) plans, IRA accounts, profit-sharing plans, executive deferred compensation plans, military pensions, and social security.

When it comes to the distribution of these assets, several factors come into play. First and foremost, the length of the marriage is considered along with the spousal contributions to these plans. Another factor is whether the spousal benefits were accrued before, during, or after the period of the marriage. A thorough review of the plan rules and stipulations is key to understanding how they may affect your case.

If you are in the process of separating or considering divorce, it is vital to inventory all financial assets as soon as possible. Make sure you have the most recent statements and understand the basic plan rules. Also, it will save you time and money by going ahead and checking with your plan administrator whether the plan has a standard Qualified Domestic Relations Order (QDRO) it requires. A QDRO is a legal document that grants a spouse or former spouse the right to a portion of the benefits under a retirement plan, and many plans – if not most – have specific language that they require for a QDRO.

It is key to understand how these assets are valued. It can be quite complex due to fluctuating values and the nature of the specific plan. Defined contribution plans, like a 401(k), are relatively straightforward to value based on the account balance. On the other hand, defined benefit plans, such as traditional pensions, might require actuarial analysis to determine the present value.

One key point to remember is that these assets are not automatically divided equally. The court considers several factors, as outlined in NC Gen Stat 50-20(c). Factors include each spouse’s income, property, and liabilities; direct or indirect contributions made by one spouse to help educate or develop the career potential of the other; the need of the parent with custody of the children to occupy or own the marital home; tax consequences; acts of either party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or convert such marital property, among others.

When dividing retirement assets, it is essential to consider potential tax implications. Certain withdrawals can trigger a taxable event or penalties if not handled correctly. Therefore, it is essential to work with an attorney and financial advisor familiar with these issues.

More About Military Retirement Division

North Carolina is a state known for its rich military history and a high concentration of active and retired service members. A unique facet of living here, particularly for military couples, is understanding how military retirements are divided in Equitable Division proceedings, and I wanted to explain the specific formula and process for dividing military retirements and discuss relevant terms like the Survivor Benefit Plan (SBP), direct pay, disposable and non-disposable retired pay, Concurrent Retirement and Disability Pay (CRDP), and Combat Related Special Compensation (CRSC).

Navigating through a military divorce in North Carolina requires a thorough understanding of how military retirements are divided. It necessitates grappling with SBP, direct pay, disposable and non-disposable retired pay, CRDP, and CRSC, each of which plays a crucial role in how assets are split. Due to the intricacies of both state and federal law in these cases, seeking professional legal advice is highly recommended to ensure a fair and equitable division of military retirement assets.

Through understanding the information outlined above, we hope that you will be better prepared to navigate the complexities of your case. However, remember that every situation is unique, and the general principles detailed here may not apply to all situations. It is always advisable to seek professional legal advice to fully understand your rights and obligations in a military divorce in North Carolina. 

Dividing Military Retirements in North Carolina: The Basics

Military retirements are considered marital property in North Carolina, subject to division in divorce proceedings under our Equitable Distribution laws. For service members and their spouses, the division of military retirement pay can often be a complex issue, as it involves both state and federal laws.

In North Carolina, the value of the military retirement is based on a “coverture fraction.” The numerator of the fraction is the total number of months the couple was married while the servicemember was in the military, and the denominator is the total number of months of the servicemember’s military service. This fraction is then multiplied by the retired pay to determine the marital share, and the non-military spouse is then entitled one half of that amount.

Understanding the Survivor Benefit Plan (SBP) in Equitable Distribution

The Survivor Benefit Plan (SBP) is a critical element to consider in these cases. SBP is an annuity that allows retired service members to provide a portion of their retirement benefits to a surviving spouse or dependents upon their death. When dividing a military retirement, it is of the utmost importance to address SBP coverage to protect the former spouse’s potential benefits.

In North Carolina, a former spouse may be designated as an SBP beneficiary. However, this must be explicitly stated in the divorce decree, separation agreement, or court order then in the appropriate paperwork filed with DFAS. If a former spouse is named an SBP beneficiary and the service member predeceases the former spouse, the former spouse will receive a percentage of the retired pay as designated by the SBP.

Direct Pay in Equitable Distribution Cases

Direct pay from the Defense Finance and Accounting Service (DFAS) is important aspect of a military divorce. The 10/10 Rule under the Uniformed Services Former Spouses’ Protection Act (USFSPA) allows for direct payment of a portion of the military retirement pay to the non-military spouse if the couple was married for at least ten years overlapping with ten years of military service. However, it is crucial to note that this rule does not determine the amount the former spouse will receive; it only allows for the direct payment to be made from DFAS.

Disposable Retired Pay vs. Non-Disposable Pay

Understanding the difference between disposable retired pay and non-disposable pay is essential in military divorce cases. Disposable retired pay refers to a servicemember’s monthly retired pay minus qualified deductions that are not divisible like disability pay.

In North Carolina, only disposable retired pay is subject to division in divorce cases. Any non-disposable pay, such as disability benefits, is protected by federal law and not considered a divisible asset.

Understanding CRDP and CRSC

Two more elements that may come into play in the division of military retirement are Concurrent Retirement and Disability Pay (CRDP) and Combat Related Special Compensation (CRSC).

CRDP allows military retirees to receive both military retired pay and Veterans Affairs (VA) disability compensation. It applies to service members with a combined VA disability rating of 50% or more.

CRSC, on the other hand, is a compensation program for retired military personnel who have disabilities deemed to be combat-related. Importantly, CRSC is not considered a retirement benefit but a form of compensation, and therefore is not divisible during divorce proceedings in North Carolina. This distinction further underscores the complexity of dividing military retirements in equitable distribution cases.

More About What Happens To A Business During Divorce?

Identifying Business Interests as Marital Property

The first step in handling businesses in equitable distribution is to identify whether the business or business interests are marital property. If a business was started or acquired during the marriage, it is generally considered marital property, and if marital assets were invested into the business, the business or part of the business may be divisible. On the other hand, if a business was owned by one spouse before the marriage and no marital assets were invested into it, it might be considered separate of marital property. The distinction can be complex, especially with businesses that grow significantly during the marriage. At Gary Britt Law, I can assist in clearly identifying where your business interests lie and help you develop and implement an effective strategy to protect and advance your financial interests regarding the business interest during the equitable distribution process.

Business Valuation in Equitable Distribution

Once it is determined that a business is marital property, the next step is determining the business’ value. Business valuation is a specialized process that often requires the expertise of business appraisers, accountants and/or financial experts. The process involves a detailed examination of a business’s financial records, market conditions, assets, liabilities, and other factors.

There are several methods for valuing a business, including the asset approach, the income approach, and the market approach. The asset approach considers the business’s total assets minus liabilities. The income approach values the business based on its income-producing capability, while the market approach compares the business to similar businesses that have recently sold.

Choosing the most appropriate valuation method depends on the nature of the business and the circumstances existing at the time of separation. With Gary Britt Law, I work closely with valuation experts to ensure an accurate and fair assessment of the business’s worth.

Division of Business Assets

After the business is valued, the next step is to figure out how to divide its value. There are several ways this can be handled. One option is to sell the business and divide the proceeds. While this provides a clean break, it may not be financially viable or sound, and it may not be the preferred choice if one or both parties wish to keep the business running.

Another option is for one spouse to buy out the other’s interest. This can be done through a lump sum payment or through an installment plan. The buyout can also be offset against the value of other marital assets.

In some cases, both parties may wish to continue owning the business together. This is more common when spouses can maintain a good working relationship or when they believe it is in their best financial interest to keep the business intact.

It is important to note that how business assets are divided can have significant tax implications. Understanding these implications is crucial for making informed decisions for your business and equitable distribution case as a whole.

Protecting Your Business Interests

As a business owner going through a divorce, protecting your business interests is likely a top priority. There are several strategies we can employ to safeguard your business. 

Handling a business in equitable distribution is a complex process that requires meticulous attention to detail and nuanced understanding of both family law and business valuation. As your dedicated family law attorney, I am committed to safeguarding your business interests, ensuring the process is carried out accurately and fairly, and helping you navigate this complex terrain with confidence and peace of mind. Reach out to Gary Britt Law today, so that you can schedule a consultation where we can discuss your unique circumstances and start your journey toward protecting your financial interests.

More About Real Property

Valuation of Real Property

The valuation of real property, which includes homes, land, and other types of real estate, is determined based on its fair market value at the date of separation. The fair market value is essentially what a willing buyer would pay to a willing seller, with neither party being under any compulsion to buy or sell.

The process of establishing the fair market value often involves using professional real estate appraisers who analyze factors such as the condition of the property, comparable property sales in the area, and local real estate market conditions.

In some cases, spouses might disagree about the property’s value. If this happens, each spouse may hire their own appraiser, and the court will consider both appraisals (and any other relevant evidence) to determine the property’s value.

Handling of Mortgages and Other Debts

Any mortgage or debt tied to the real property also plays a significant role in equitable distribution. Typically, the amount of any mortgage or home equity loan owed at the date of separation is deducted from the fair market value of the property to calculate the net marital value of the property for distribution purposes.

For example, if the marital home is valued at $300,000, and there is a mortgage balance of $200,000, the net marital value for distribution would be $100,000.

Division of Real Property and Associated Debts

Once the net marital value is determined, the court will decide how to equitably divide the property and its associated debts. Options can include one spouse buying out the other’s equity, selling the property and dividing the proceeds, or even co-owning the property post-divorce in some cases.

The division of the property’s net value and the responsibility for the mortgage or other debts are not always the same. For instance, one spouse might be awarded the property but the responsibility to pay off the mortgage might be divided between both parties. The court will make these decisions based on a variety of factors, including each spouse’s income, assets, and ability to pay.

Conclusion

At Gary Britt Law, I pride myself on providing personalized attention and support to each of my clients. I understand that every situation is unique, and I take the time to listen to your concerns and develop a legal strategy that is tailored to your needs. My goal is to provide you with the guidance, advocacy, and support you need to protect your rights and interests and achieve the best possible outcome for you.

Navigating the equitable distribution process is no small feat, but you do not have to do it alone. At Gary Britt Law, we are dedicated to helping you every step of the way, ensuring that you have the knowledge, resources, and representation you need to strive for a fair outcome. Reach out today to get started on your journey towards equitable distribution.

If you are looking for legal representation for Equitable Distribution in Fayetteville, NC and Fort Bragg / Fort Liberty, or the surrounding communities in Cumberland, Sampson, Hoke, Harnett, and Robeson counties, please do not hesitate to contact me. I offer flexible consultation and appointment scheduling that fits with your schedule, and we can discuss your case and help you understand your legal options. Let me help you navigate this complex legal matter and achieve a favorable resolution.