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NORTH CAROLINA STATUTES AND CODES

§ 50-20. Distribution by court of marital and divisible property.

§ 50‑20.  Distributionby court of marital and divisible property.

(a)        Upon application ofa party, the court shall determine what is the marital property and divisibleproperty and shall provide for an equitable distribution of the maritalproperty and divisible property between the parties in accordance with theprovisions of this section.

(b)        For purposes ofthis section:

(1)        "Maritalproperty" means all real and personal property acquired by either spouseor both spouses during the course of the marriage and before the date of theseparation of the parties, and presently owned, except property determined tobe separate property or divisible property in accordance with subdivision (2)or (4) of this subsection. Marital property includes all vested and nonvestedpension, retirement, and other deferred compensation rights, and vested andnonvested military pensions eligible under the federal Uniformed ServicesFormer Spouses' Protection Act. It is presumed that all property acquired afterthe date of marriage and before the date of separation is marital propertyexcept property which is separate property under subdivision (2) of thissubsection. This presumption may be rebutted by the greater weight of theevidence.

(2)        "Separateproperty" means all real and personal property acquired by a spouse beforemarriage or acquired by a spouse by bequest, devise, descent, or gift duringthe course of the marriage. However, property acquired by gift from the otherspouse during the course of the marriage shall be considered separate propertyonly if such an intention is stated in the conveyance. Property acquired inexchange for separate property shall remain separate property regardless ofwhether the title is in the name of the husband or wife or both and shall not beconsidered to be marital property unless a contrary intention is expresslystated in the conveyance. The increase in value of separate property and theincome derived from separate property shall be considered separate property.All professional licenses and business licenses which would terminate ontransfer shall be considered separate property.

(3)        "Distributiveaward" means payments that are payable either in a lump sum or over aperiod of time in fixed amounts, but shall not include alimony payments orother similar payments for support and maintenance which are treated asordinary income to the recipient under the Internal Revenue Code.

(4)        "Divisibleproperty" means all real and personal property as set forth below:

a.         All appreciation anddiminution in value of marital property and divisible property of the partiesoccurring after the date of separation and prior to the date of distribution,except that appreciation or diminution in value which is the result ofpostseparation actions or activities of a spouse shall not be treated asdivisible property.

b.         All property,property rights, or any portion thereof received after the date of separationbut before the date of distribution that was acquired as a result of theefforts of either spouse during the marriage and before the date of separation,including, but not limited to, commissions, bonuses, and contractual rights.

c.         Passive income frommarital property received after the date of separation, including, but notlimited to, interest and dividends.

d.         Increases anddecreases in marital debt and financing charges and interest related to maritaldebt.

(c)        There shall be anequal division by using net value of marital property and net value ofdivisible property unless the court determines that an equal division is notequitable. If the court determines that an equal division is not equitable, thecourt shall divide the marital property and divisible property equitably. Thecourt shall consider all of the following factors under this subsection:

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

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

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

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

(5)        The expectation ofpension, retirement, or other deferred compensation rights that are not maritalproperty.

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

(7)        Any direct orindirect contribution made by one spouse to help educate or develop the careerpotential of the other spouse.

(8)        Any directcontribution to an increase in value of separate property which occurs duringthe course of the marriage.

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

(10)      The difficulty ofevaluating any component asset or any interest in a business, corporation orprofession, 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 consequencesto each party, including those federal and State tax consequences that wouldhave been incurred if the marital and divisible property had been sold orliquidated on the date of valuation. The trial court may, however, in itsdiscretion, consider whether or when such tax consequences are reasonablylikely to occur in determining the equitable value deemed appropriate for thisfactor.

(11a)    Acts of either partyto maintain, preserve, develop, or expand; or to waste, neglect, devalue orconvert the marital property or divisible property, or both, during the periodafter separation of the parties and before the time of distribution.

(11b)    In the event of thedeath of either party prior to the entry of any order for the distribution ofproperty made pursuant to this subsection:

a.         Property passing tothe surviving spouse by will or through intestacy due to the death of a spouse.

b.         Property held astenants by the entirety or as joint tenants with rights of survivorship passingto the surviving spouse due to the death of a spouse.

c.         Property passing tothe surviving spouse from life insurance, individual retirement accounts,pension or profit‑sharing plans, any private or governmental retirementplan or annuity of which the decedent controlled the designation of beneficiary(excluding any benefits under the federal social security system), or any otherretirement accounts or contracts, due to the death of a spouse.

d.         The survivingspouse's right to claim an "elective share" pursuant to G.S. 30‑3.1through G.S. 30‑33, unless otherwise waived.

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

(c1)      Notwithstanding anyother provision of law, a second or subsequent spouse acquires no interest inthe marital property and divisible property of his or her spouse from a formermarriage until a final determination of equitable distribution is made in the maritalproperty and divisible property of the spouse's former marriage.

(d)        Before, during orafter marriage the parties may by written agreement, duly executed andacknowledged in accordance with the provisions of G.S. 52‑10 and 52‑10.1,or by a written agreement valid in the jurisdiction where executed, provide fordistribution of the marital property or divisible property, or both, in amanner deemed by the parties to be equitable and the agreement shall be bindingon the parties.

(e)        Subject to the presumptionof subsection (c) of this section that an equal division is equitable, it shallbe presumed in every action that an in‑kind distribution of marital ordivisible property is equitable. This presumption may be rebutted by thegreater weight of the evidence, or by evidence that the property is a closelyheld business entity or is otherwise not susceptible of division in‑kind.In any action in which the presumption is rebutted, the court in lieu of in‑kinddistribution shall provide for a distributive award in order to achieve equitybetween the parties. The court may provide for a distributive award tofacilitate, effectuate or supplement a distribution of marital or divisibleproperty. The court may provide that any distributive award payable over a periodof time be secured by a lien on specific property.

(f)         The court shallprovide for an equitable distribution without regard to alimony for eitherparty or support of the children of both parties. After the determination of anequitable distribution, the court, upon request of either party, shall considerwhether an order for alimony or child support should be modified or vacatedpursuant to G.S. 50‑16.9 or 50‑13.7.

(g)        If the court ordersthe transfer of real or personal property or an interest therein, the court mayalso enter an order which shall transfer title, as provided in G.S. 1A‑1,Rule 70 and G.S. 1‑228.

(h)        If either partyclaims that any real property is marital property or divisible property, thatparty may cause a notice of lis pendens to be recorded pursuant to Article 11of Chapter 1 of the General Statutes. Any person whose conveyance orencumbrance is recorded or whose interest is obtained by descent, prior to thefiling of the lis pendens, shall take the real property free of any claim resultingfrom the equitable distribution proceeding. The court may cancel the notice oflis pendens upon substitution of a bond with surety in an amount determined bythe court to be sufficient provided the court finds that the claim of thespouse against property subject to the notice of lis pendens can be satisfiedby money damages.

(i)         Upon filing anaction or motion in the cause requesting an equitable distribution or allegingthat an equitable distribution will be requested when it is timely to do so, aparty may seek injunctive relief pursuant to G.S. 1A‑1, Rule 65 andChapter 1, Article 37, to prevent the disappearance, waste or conversion ofproperty alleged to be marital property, divisible property, or separateproperty of the party seeking relief. The court, in lieu of granting aninjunction, may require a bond or other assurance of sufficient amount toprotect the interest of the other spouse in the property. Upon application bythe owner of separate property which was removed from the marital home orpossession of its owner by the other spouse, the court may enter an order forreasonable counsel fees and costs of court incurred to regain its possession,but such fees shall not exceed the fair market value of the separate propertyat the time it was removed.

(i1)       Unless good causeis shown that there should not be an interim distribution, the court may, atany time after an action for equitable distribution has been filed and prior tothe final judgment of equitable distribution, enter orders declaring what isseparate property and may also enter orders dividing part of the maritalproperty, divisible property or debt, or marital debt between the parties. Thepartial distribution may provide for a distributive award and may also providefor a distribution of marital property, marital debt, divisible property, ordivisible debt. Any such orders entered shall be taken into consideration attrial and proper credit given.

Hearings held pursuant to thissubsection may be held at sessions arranged by the chief district court judgepursuant to G.S. 7A‑146 and, if held at such sessions, shall not besubject to the reporting requirements of G.S. 7A‑198.

(j)         In any order forthe distribution of property made pursuant to this section, the court shallmake written findings of fact that support the determination that the maritalproperty and divisible property has been equitably divided.

(k)        The rights of theparties to an equitable distribution of marital property and divisible propertyare a species of common ownership, the rights of the respective parties vestingat the time of the parties' separation.

(l)        (1)        Aclaim for equitable distribution, whether an action is filed or not, survivesthe death of a spouse so long as the parties are living separate and apart atthe time of death.

(2)        The provisions ofArticle 19 of Chapter 28A of the General Statutes shall be applicable to aclaim for equitable distribution against the estate of the deceased spouse.

(3)        Any claim forequitable distribution against the surviving spouse made by the estate of thedeceased spouse must be filed with the district court within one year of thedate of death of the deceased spouse or be forever barred. (1981, c. 815, s. 1; 1983, c.309; c. 640, ss. 1, 2; c. 758, ss. 1‑4; 1985, c. 31, ss. 1‑3; c.143; c. 660, ss. 1‑3; 1987, c. 663; c. 844, s. 2; 1991, c. 635, ss. 1,1.1; 1991 (Reg. Sess., 1992), c. 960, s. 1; 1995, c. 240, s. 1; c. 245, s. 2;1997‑212, ss. 2‑5; 1997‑302, s. 1; 1998‑217, s. 7(c);2001‑364, ss. 2, 3; 2002‑159, s. 33; 2003‑168, ss. 1, 2; 2005‑353,s. 1.)

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