The family home is usually one of the largest assets that most people own. When two people get divorced, they need to distribute their assets and debts among themselves. If they cannot reach an agreement, a judge will have to make that decision.
North Carolina family law attorneys can talk to you about who keeps the family home in a North Carolina divorce. You need to try to plan your financial future, which includes where you will live, so it can help to understand your options.
North Carolina is an Equitable Division State
In America, a state is either a community property state or an equitable distribution state. North Carolina uses the approach of equitable division to apportion marital property. Equitable distribution, also called equitable division, means that the judge tries to divide your assets in a fair or equitable manner.
Both parties often experience a decreased standard of living, at least for a while, after a divorce because the income that used to support a family in one household now supports two households. Some of the largest expenses, like mortgage or rent, utilities, property taxes, and homeowners or tenant insurance, get duplicated with two households.
Marital and Separate Property
No matter what state you live in, the first step one must take when evaluating the property to distribute in a divorce is to identify which items are marital property and which things are separate property. In general, marital property includes things acquired during the marriage and up to the date of separation. Separate property includes assets a person had before getting married, as well as individual gifts and inheritance received during the marriage.
The judge will first set aside each person’s separate property for that individual. Something could start out as separate property and become marital property, by co-mingling the separate asset with joint or marital assets or by using the money to buy something that gets titled jointly.
Let’s say that you inherited money from your parent when you were single. You used that money to buy a house for cash, without a mortgage. You titled to the house in your name only. When you were married, you sold your house and used the proceeds as a significant down payment on a larger family home titled jointly with you and your spouse. The court will not set aside the value of your initial house as separate property. The entire asset is now marital.
Contrary to what happens in some Hollywood movies, the judge will not split every asset down the middle and award half to your former spouse and half to you. Instead, the judge will usually be practical. For example, if you have primary physical custody of the children and want to remain in the family home, you could buy out your ex’s portion of the equity or swap out an asset of similar value. People often agree to offset home equity with retirement funds.
Another option is to sell the house and split the proceeds, with each spouse getting a fresh start in a new place. Most people find it best to try to resolve the property distribution issues by agreement rather than letting a total stranger, a judge, make such important decisions for them.
You will want to talk to North Carolina family law attorneys about the property distribution and other issues of your divorce. Get in touch with our office today, we offer a free consultation.