Over the years of my divorce practice, I have seen two things that have caught couples by surprise when it comes to dividing assets.
- Equitable division is decided before spousal support. Often, one spouse is super focused on the amount of support he/she will get, thinking they will negotiate for marital assets later. Under North Carolina statutes (any in many other states) calculating spousal support comes after the property is settled. See General Statute 50-20 (f), “the court shall provide for an equitable distribution without regard to alimony for either party or support of the children of both parties.” The reason for this is that assets and liabilities are a factor in determining spousal support by the court, so it is important to look first at the property division. A common example when this might come into play is when 2 retired spouses divide assets. Say, as a result, they both have assets which could generate identical retirement income. This might be a case where alimony does not come into play.
A common strategy I have seen is when a spouse might think he/she will be married soon (or relatively soon) after the marriage ends. In NC, alimony ends upon remarriage or cohabitation per General Statute § 50-16.9 (b). That spouse might negotiate for a larger percentage of the marital assets, with the result being a reduction in or an elimination of alimony. The gamble is that his/her alimony will go away but the spouse will still retain the marital asset.
- A claim for equitable division MUST be made before the divorce is final. I have seen couples in a hurry and file for divorce, thinking they can decide on property division later. If no claim for equitable division is pending before the divorce is final, spouses are barred from making claims in court. Does equitable division have to be decided before divorce? No, just claimed. It could be years after the divorce before division of property is decided by the court. If the couple is amicable, they might fairly divide assets outside of court. But if they are not, well…….this could be a big problem. (P.S. A claim for alimony must also be made before the divorce is final.)