Equitable Distribution and the Trial Court in NC

equitable distribution rulesG.S. § 50-20(a) provides that “[u]pon application of a party, the court shall determine what is the marital property and divisible property, and shall provide for an equitable distribution of both between the parties in accordance with the provisions of this section.”

Several appellate cases have outlined a three-step process for trial judges to follow in our district courts.  The trial judge must (a)  determine which property is marital and divisible property; (b)  calculate the net value of the property; and then is distributes the property in an equitable manner.  See e.g. Brackney v. Brackney, 682 S.E.2d 401 (2009).

Classification of Property:

There are three statutory classifications in G.S. § 50-20: marital, separate, or divisible property.  The court must classify debt as either marital, separate or divisible and in the judgment of equitable distribution support its classification of property by written findings of fact. Hunt v. Hunt, 112 N.C.App. 722, 436 S.E.2d 856 (1993).

Valuation of Property:

Once the property is classified then tr judge must value marital and divisible property and marital and divisible debt.

An often confusing aspect of the court’s valuation process is that there are correct dates for the valuation.  Marital property is valued as of the date of separation pursuant to G.S. § 50-21(b) and marital debt is valued as of the  date of separation pursuant to Mrozek v. Mrozek, 129 N.C.App. 43, 496 S.E.2d 836 (1998).   Divisible property and divisible debt are valued as of the date of distribution pursuant to G.S. § 50- 21(b).

Dividing the property:

Once the foregoing identification and classification exercises are complete, the trial court must distribute marital and divisible property and marital and divisible debt.  G.S. § 50-20(a).

There is a presumption in thew that  marital and divisible property are to be equally divided unless he or she determines that an equal division is not equitable. G.S. § 50-20(c).