If you are contemplating ending your marriage in North Carolina, there are several laws and processes you should know about before you take your first steps.
For example, a marriage can end through an annulment or a divorce in North Carolina. The actual term for a divorce in the state is known as an Absolute Divorce. By law, legal separations are also allowed, and they are referred to as a Divorce of Bed and Board.
The only two reasons that can be cited as grounds for divorce are physical separation of at least one year and incurable insanity which must exist for at least three years.
As an equitable distribution state, courts in North Carolina will attempt to split assets in a fair and equal way, but this doesn’t necessarily mean the distribution will be on a 50/50 basis.
Here are some of the other important legal questions and major issues that are common to the divorce process in North Carolina:
North Carolina is an equitable distribution state. This means courts will attempt to divide property and assets in a divorce in a fair and equal way. It does not mean that assets will necessarily be divided on a 50/50 basis.
Only marital assets are considered in a division of assets. Marital assets are those accumulated during the course of the marriage up until the day of separation. There are some exceptions, such as with inheritances and personal gifts, which may be considered separate property if certain conditions are met.
Equitable distribution consists of the court deciding which assets are marital vs. separate property, placing a fair market value on each asset, and then actually dividing the assets equally. There are factors that will allow the court to deviate from a fair and equitable distribution. Some of these may include:
In North Carolina, any debt acquired during a marriage is the responsibility of both parties, up to the date of separation. The person who is claiming that a debt is marital must provide proof that it was incurred during the marriage but before separation. It must also be proven that the debt was incurred for the joint benefit of both spouses.
When it comes to splitting payment of the debt in a divorce, the debt will be split fairly but not necessarily 50-50. Courts may take into account who was responsible for accumulating most of the debt, the ability of one party to pay a debt more readily, and other factors.
It is important to remember that even though one spouse may be assigned the debt, if a spouse can’t make payments or refuses to pay, the nonpayment of the debt will affect both spouse’s credit scores. When nonpayment becomes an issue, a spouse can request that the payments be enforced by seeking relief in court.
When a spouse receives a gift from a third party, that gift is considered separate property and not subject to equitable distribution of assets in North Carolina. However, when gifts are given between spouses after a marriage and before separation, they are considered marital property and must be accounted for and distributed as part of the divorce process. The only exception to this is if the gift was given with the express intention that the gift is separate property of the spouse who received it.
The person who receives a gift during a marriage and claims it as separate property has the burden of proof to show that the gift or inheritance was intended to be separate property.
Inherited property is not considered marital property in North Carolina, unless it was given as a marital gift or if a spouse contributes funds to a shared bank account that also includes inherited funds. A court could decide that by placing funds into a shared bank account that it could be viewed as a spouse donating funds to a marriage.
The best way to avoid this is to place all inherited assets into a separate account and document your actions accordingly.
Another way to protect an inheritance is to have a spouse sign a post-nuptial agreement whereby he or she agrees that the inheritance belongs to one spouse only, no matter how it is used in the marriage.
Pensions and retirement benefits that are acquired during a marriage are considered marital property and subject to equitable distribution laws during a divorce.
To determine the exact amount of pension that is subject to division, the state uses a simple formula. It is calculated by dividing the length of time a spouse was simultaneously married (up to the date of legal separation) and employed by the total length of employment.
Normally, a spouse cannot receive more than 50% of the marital portion of the other spouse’s pension, but there are some exceptions. This can include cases where other marital assets are not sufficient to meet the terms of an equitable distribution. A spouse may offer the other a lump sum buyout or payments may be split once payments actually begin. Pension benefits may also be factored in to alimony and child support calculations.
Determining the exact value of pensions and retirement accounts can be a complex process, and many times an expert such as an accountant, business appraiser, pension valuator, actuary, or a certified divorce financial analyst is retained to make an accurate assessment.
Legally splitting pensions and other retirement funds is a multiple step process. After the Absolute Divorce has been granted, an attorney or a specialized firm must create a qualified domestic relations order, more commonly referred to as a QDRO.
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The QDRO must be approved by the courts and then it can be submitted to the plan administrator who must also approve it. This establishes that a spouse can be considered an alternate payee, and the retirement vehicle is then divided according to the specifics contained in the QDRO.
All real and personal property acquired before a marriage, or property acquired during a marriage through a bequest, devise, descent or gift is considered separate property.
Gifts given to one spouse by the other during the marriage are considered marital property. To be considered non-marital property, a spouse must present clear and compelling evidence that the property is separate. This might be done through the execution of a pre- or post-nuptial agreement or through other similar means.
Alimony can be granted to either spouse in North Carolina and the courts will attempt to make sure any award is equitable based on relevant factors that can go into a decision
Courts have discretion in determining the amount, duration and how the alimony is paid. The length of alimony payments can be for a fixed duration or for an indefinite time period.
Factors that impact an alimony award in North Carolina include:
North Carolina uses a statewide guideline known as the Income Shares Model to calculate child support and awards are made based on this formula. The formula has variables that can include each parent’s income, daycare and medical expenses, costs of living arrangements for the children and other impacts that will affect how a child is raised.
According to the state’s guidelines, children must receive the same proportion of financial support they would receive if both parents still lived together. North Carolina Health and Human Services provides a Child Support Worksheet to help determine how much support may be required.
Courts are given leeway to deviate from the guidelines if it is determined that a proposed child support arrangement would not meet or would exceed the reasonable needs of the child, or if the ability of each parent to provide support appears to be inappropriate or unjust.
If a parent misses child support payments, then the other parent can petition the courts to force payment through several possible means. This can include withholding the parent’s wages or benefits, placing liens on their property, garnishing tax refunds, and in some cases imposing criminal penalties.
Court ordered child support payments in North Carolina generally end when a child turns 18 or they become emancipated. Support can extend beyond 18 if a child is still in school and will continue until he or she graduates or stops attending school on a regular basis. Support will also end if the child does not make satisfactory academic progress or reaches age 20, whichever comes first.
North Carolina has adopted the Uniform Child Custody Act to help govern child custody issues related to a divorce in the state. All decisions regarding child custody are based on the principle that decisions will be made with the best interests of the child in mind.
The state recognized two types of child custody:
Custody is determined by the best interests of the child and there are several factors that go into deciding this. Some of those include
Courts encourage parents to come up with a joint parenting agreement in cases where there are no significant negative factors (i.e. drug abuse, domestic violence, criminal activity). The plan outlines the rights and responsibilities of each parent in a very detailed fashion. When parents can’t come to an agreement, the courts will step in and make a final decision.
Our Family Wizard is an app that is specially designed to help you create and implement a parenting plan. To find out more, click here!
North Carolina also recognizes the right for grandparents, great-grandparents, or a sibling of a minor child to petition for visitation rights as well. These are also referred to as non-parent visitation rights. The petitioner should be prepared to show how spending time with the child is in the child’s best interest.
Substance abuse is not a valid ground for divorce in North Carolina, but it can carry considerable weight in issues regarding child custody.
If there is a danger to the child, as there would be with drug or alcohol abuse being present, then courts may restrict or deny visitation or custody of a child for the spouse in question. Courts will always take the best interests of the child into primary consideration and this type of problem represents a clear and present threat to the well-being of the child.
To prove a substance abuse case against a spouse, it is critical to document the substance abuse and how it has impacted the marriage. This can be done by testing, testimony from family members or from representatives of social services agencies, or other witnesses who can provide first-hand information and insights.
Bifurcation means that both parties in a divorce can legally divide their divorce into two stages. The first part satisfies the grounds for the divorce. The marriage is terminated at that point. Bifurcation means that the financial aspects of the divorce such as child custody, visitation, child support, alimony or other contentious issues that may have stalled or that have become major sticking points will be finalized at a later date.
North Carolina does allow bifurcated divorces, meaning that each claim associated with the divorce, including the divorce itself, are considered separate claims.
Couples who pursue this option must understand they could incur more legal bills going this route and that because some of the incentives to resolve differences are removed by bifurcation, a final settlement could take much longer.
Under North Carolina law, both parties in a divorce are required to make a full disclosure of their assets and debts that existed at the date of separation. This includes both marital and non-marital property. If there are disagreements about what constitutes a marital vs. non-marital asset, the burden of proof is on the party that made the claim.
Accurate and complete disclosures are essential to making sure there is a fair division of assets. In addition, financial disclosures are also used to gauge the financial health of each spouse and will help to determine if spousal support is required and what amount of child support should be awarded.
In some instances, a spouse may be reluctant to disclose assets. When that happens, a formal legal process known as “discovery” can be implemented, forcing a spouse to produce required documentation. Failure to do so could result in legal action against the offending party including fines or other penalties. There are also cases where a subpoena may be required, and at other times it may be advisable to retain a forensic accountant to review pertinent records.
After a petitioning spouse has filed a complaint with the court and served their spouse with papers, the spouse has 30 days to respond to the complaint. When the other spouse does not respond within that timeframe, the petitioning spouse may be granted a divorce within 60 days depending on the jurisdiction where the complaint was filed.
The spouse who filed the complaint can request a default divorce by filing a Motion for Entry of Default. This has the same legal effect as a divorce where both spouses make an appearance with the court, but the spouse who does not respond does not get to have the court hear his side.
When a spouse does not respond, they give up their right to contest terms of the divorce, including things such as child custody, support, alimony and a division of assets and debts. A failure to respond could have serious implications because one spouse might end up paying more than they should for support or for debts that were not theirs.
In divorces where domestic violence is present, any divorce actions are secondary to the immediate safety of a spouse or children who may be in immediate danger. There are strong safeguards in place to protect against domestic violence. Safety is the number one priority of law enforcement in all cases. You can as the court for a civil order of protection to legally keep a spouse away from you either before a divorce action begins or during a divorce already in progress.
Domestic violence can include any kind of physical abuse, emotional abuse, stalking, or any other kind of harassment including those made through phone calls, mail, or social media inflicted on one spouse by the other. It is a criminal act and an abuser can face serious charges for violating the law.
In North Carolina, domestic violence charges can have a big impact on divorce proceedings, but especially so when it comes to child custody. If domestic violence can be documented, then the abuser may not be allowed any custody privileges, because courts always put the best interests of children first when it comes to all issues in a divorce.
In other cases, visitation may be granted, but under strict supervision and on a limited basis. This decision by the courts may be granted on a temporary or a permanent basis, depending on the circumstances that are present.
North Carolina recognizes the common law doctrine of the doctrine of necessities. This means that when you are married, you are responsible for your spouse’s necessities. Under the law, you are liable to pay for food, clothing, shelter and other necessities if spouse receives them from you during marriage.
That also can include health insurance. So, if you cancel health insurance when a spouse is used to getting coverage from you, then you could be held liable for medical bills if your spouse is injured or needs medical attention before you are divorced. This also extends to cases where you are already legally separated.
Health insurance for children is usually part of a divorce settlement and child support/custody agreement. Spouses may agree that children are covered under one spouse’s health insurance and if the purchase of private insurance is required, then it will need to be negotiated as to which spouse pays, or if both spouses must contribute to the costs.
Once a divorce has been finalized, employers will not allow an ex-spouse to remain on a health insurance policy. However, an ex-spouse can apply for COBRA benefits. This is a law that protects people from losing health coverage during major life transitions. It allows you to continue with your spouse’s current coverage for up to 36 months as long as you pay the premiums.
The only drawback is that this can be very expensive because an employer will no longer cover any portion of the premium. A better option may be to purchase health insurance on an exchange as part of the Affordable Care Act.
Infidelity and adultery occur when a spouse has sex voluntarily with someone other than their spouse while they are still married.
In North Carolina, this may not be used as a grounds for divorce, however, a spouse can file a civil lawsuit against the spouse’s lover based on an action known as “alienation of affection” or for “criminal conversation.”
Infidelity or adultery may become more of an issue in things such as alimony, child custody or in a division of assets. The court places a primary concern on the well-being of children in a marriage and if it can be shown that adultery has created a negative environment, then custody may be affected to some degree.
If it can be shown that an adulterous spouse spent considerable marital assets on an affair, then this may also have some impact in certain cases when it comes to a division of assets. Marital misconduct, including adultery, will be considered when awarding alimony. If the court finds that adultery took place, then the court must award alimony to the spouse seeking support.
If you or your spouse are a member of the military and want to get an Absolute Divorce in North Carolina, one of you must have been stationed in North Carolina for six months prior to filing for a divorce. The plaintiff may file a Complaint for Divorce in the county where he or she lives or where the respondent has lived for the prior six months.
The grounds for a military divorce are the same as they are for a civilian divorce. You can either claim you have lived apart for at least one year or lived separate and apart for three consecutive years due to incurable insanity in one of the spouses.
Just as in a civilian divorce, once paperwork has been filed in North Carolina to begin a divorce, copies must be served on a spouse to give him or her a chance to respond. However, when that spouse is in the military, they have certain protections afforded to them by the Servicemembers Civil Relief Act. This allows them to postpone the divorce while they are overseas or otherwise not able to adequately respond to the petition due to military service commitments.
The Servicemembers Civil Relief Act eases many legal and financial burdens of military personnel and their families who face the added challenges of active duty. A service member may choose to waive delaying the divorce by signing off on paperwork which will then allow the divorce to proceed uncontested.
Normal equitable property division laws apply for a military divorce in North Carolina, but the federal government also protects military personnel through the Uniformed Services Former Spouses Protection Act that governs how military benefits are calculated when a divorce takes place. Federal laws will not allow a military members retirement to be distributed to a spouse unless the couple has been married for 10 years or more while the service member was on active duty.
Child support and spousal support are determined by North Carolina state guidelines, but federal law dictates that child and spousal support awards may not exceed 60% of a servicemembers pay and allowances.
Looking for more advice about divorce? Here are a few of our favorite resources:
Jason Crowley is a divorce financial strategist, personal finance expert, and entrepreneur. Jason is the managing partner of Divorce Capital Planning, co-founder of Divorce Mortgage Advisors, and founder of Survive Divorce. A leading authority in divorce finance, Jason has been featured in the Wall Street Journal, Forbes, and other media outlets. He is a Chartered Financial Analyst, Certified Financial Planner practitioner, and Certified Divorce Financial Analyst. You can email him at jason@survivedivorce.com.
