Factors the Court Considers When Making Equal or Un-Equal Distribution

North Carolina courts are to make an equal division of the marital estate unless they determine that an equal division is not equitable.  In making this determination, the court shall consider the following factors, all of which are set forth at North Carolina General Statute § 50-20(c):

(1) The income, property, and liabilities of each party at the time the division of property is to become effective.

(2) Any obligation for support arising out of a prior marriage.

(3) The duration of the marriage and the age and physical and mental health of both parties.

(4) The need of a parent with custody of a child or children of the marriage to occupy or own the marital residence and to use or own its household effects.

(5) The expectation of pension, retirement, or other deferred compensation rights that are not marital property.

(6) Any equitable claim to, interest in, or direct or indirect contribution made to the acquisition of such marital property by the party not having title, including joint efforts or expenditures and contributions and services, or lack thereof, as a spouse, parent, wage earner or homemaker.

(7) Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse.

(8) Any direct contribution to an increase in value of separate property which occurs during the course of the marriage.

(9) The liquid or nonliquid character of all marital property and divisible property.

(10) The difficulty of evaluating any component asset or any interest in a business, corporation or profession, and the economic desirability of retaining such asset or interest, intact and free from any claim or interference by the other party.

(11) The tax consequences to each party, including those federal and State tax consequences that would have been incurred if the marital and divisible property had been sold or liquidated on the date of valuation. The trial court may, however, in its discretion, consider whether or when such tax consequences are reasonably likely to occur in determining the equitable value deemed appropriate for this factor.

(11a) Acts of either party to maintain, preserve, develop, or expand; or to waste, neglect,

devalue or convert the marital property or divisible property, or both, during the period after separation of the parties and before the time of distribution.

(11b) In the event of the death of either party prior to the entry of any order for the distribution

of property made pursuant to this subsection:

  • Property passing to the surviving spouse by will or through intestacy due to the death of a spouse.
  • Property held as tenants by the entirety or as joint tenants with rights of survivorship passing to the surviving spouse due to the death of a spouse.
  • Property passing to the surviving spouse from life insurance, individual retirement
    accounts, pension or profit-sharing plans, any private or governmental retirement plan or annuity of which the decedent controlled the designation of beneficiary (excluding any benefits under the federal social security system), or any other retirement accounts or contracts, due to the death of a spouse.
  • The surviving spouse’s right to claim an “elective share” pursuant to G.S. 30-3.1
    through G.S. 30-33, unless otherwise waived.

(12) Any other factor which the court finds to be just and proper.

By examining these factors, the court will ultimately decide how to divide the marital estate.  In the event it finds that an equal division is not equitable, it has to decide what constitutes an equitable division of property and debts.  An equitable division might result in one spouse receiving 45% of the marital estate with the other spouse receiving 55%. Or one spouse might be awarded the residence with the other spouse receiving a greater percentage of the retirement accounts.  The court has the discretion in determining what is an equitable distribution of property and how the marital property and debts are to be distributed to achieve an equitable distribution of property and debts.