Parker Herring discusses equitable distribution, the division of assets, property and debts during a divorce.

TRANSCRIPT: Equitable distribution is the division of property through the court system. And you can do equitable distribution without involving the court and end up with a separation agreement or collaborative law. But it’s the division of all of your property. What is property? It’s the stuff, it’s the things. So you start with real estate, then you go down to what I call paper money accounts, retirement accounts, vehicles, airplanes, motorcycles. And then you look at your debt, and then you have the things in your house. And you try to figure out a way to value all of those items, to classify whether they’re marital or separate, and then after you’ve valued them, to divide them. It’s called “equitable distribution” because in North Carolina, there is a presumption that “equal” is “equitable,” but there are factors which a court can decide, or parties can decide between them, that they don’t want to exactly do a 50-50 split. Although if you do go to court, and have a judge make the decision, equitable distribution is going to result in the parties having an equal division, unless one of the 13 factors is recognized by the judge as compelling.

When you sign a separation agreement, and it includes property settlement, then it’s standard form to state that the court is not going to get involved, so you have divided the property by yourselves without the court getting involved, so there will be no equitable distribution process with the court. And it’s a cumbersome process. You each have to file a complaint, answer a complaint, file an affidavit, which has all of the issues before you, and where you each state whether you feel the property is marital or separate, and what you feel it’s worth. And then you do spreadsheets, and you have pre-trials. So the court process of equitable distribution is very time-consuming.

It’s very important to not file for an absolute divorce, or not let your spouse obtain an absolute divorce, without preserving the rights to have the court decide spousal support and division of property. If your spouse files a complaint, and it doesn’t include division of property, and you don’t answer and make a claim for division of property, then you’ve lost the right to have the court decide that. And then the property will be divided basically by title.

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