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Property

New Equitable Distribution Law

9848758_sAs though the concept of equitable distribution wasn’t confusing enough already… now there’s new law out there regarding marital gifts when it comes to real property! Don’t worry; I’ll try to break it down for you.

On October 1, 2013, the North Carolina Courts, through S.L. 2013-103, amended the marital property presumptions found in G.S. 50-20(b)(1) to specifically include property acquired as tenants by the entirety. Here is how the statute reads now:

It is presumed that all property acquired after the date of marriage and before the date of separation is marital except property which is separate property under subdivision (2) of this subsection. It is presumed that all real property creating a tenancy by the entirety acquired after the date of marriage and before the date of separation is marital property. Either presumption may be rebutted by the greater weight of the evidence.

This new law basically means that any real estate, or “real property” as the legal term goes, bought during the marriage and prior to separating from your spouse is presumed to be marital property. Additionally, any money used to buy this house, whether separate or not, is considered marital. As a reminder, marital property in North Carolina is generally split about 50/50 during a divorce, which is why this law is so important.

So, how does this work in real life? Let’s say you have a $100,000 inheritance and want to buy a home with your spouse. When you use this inheritance to buy a home during your marriage, if you go through a divorce, you won’t get that $100,000 back. Essentially, your inheritance becomes a gift to the marriage and marital property. Now, what if you don’t want your inheritance to become marital property when you buy a home? You would need a document executed around the time you purchased the property stating that you don’t intend for your inheritance to become marital property.

If you want more information about the new equitable distribution law, please click the link below for an in-depth article discussing the new law and its ramification.

http://www.sog.unc.edu/sites/www.sog.unc.edu/files/ED%20update%20Paper%20Dec.%202013.pdf

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About McIlveen Family Law Firm

The McIlveen Family Law Firm handles all types of divorce and family law cases.

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