top of page

Equitable Distribution Basics


How is property divided when spouses divorce in North Carolina?


Depending on the amount and type of property to be divided, spouses can divide their property by agreement, and/or through the judicial process.  In North Carolina, this is known as “Equitable Distribution.” 


What is “Equitable Distribution?”


Equitable distribution is the process by which property owned between spouses during marriage is classified and distributed pursuant to N.C.G.S. § 50-20.  North Carolina equitable distribution laws were drafted in recognition of the fact that marriage is an equal partnership, where “…both spouses contribute to the economic circumstances of a marriage, whether directly by employment or indirectly by providing homemaker services.” (Smith v. Smith, 314 N.C. 80, 86, 331 S.E.2d 682 (1985).  


How does this process work?


Dividing property held between spouses is a complex legal process.  If spouses do not agree to the division of their property through a valid property settlement agreement, the first step to reserving your right to an equitable distribution claim through the court is to file a claim.  In most cases and with very few exceptions, this claim must be asserted prior to the final judgment of divorce or the claim is lost.  Contact your attorney prior to signing or filing any legal paperwork to ensure you do not lose your right to an equitable distribution claim. 


The equitable distribution process is a three-step process where the property and debt is:

1) Identified and Classified;

2) Valued; and

3) Distributed in an equitable manner taking into consideration various legal factors. 


Basics of Property Classification


Property classification is a legal conclusion and is categorized as marital, separate, or divisible in nature.  It applies to real and personal property as well as debt.


There are a number of legal rules that dictate whether property and debt is marital, separate, or divisible in nature.  And only marital and divisible property are distributed during the process of equitable distribution.  A spouses’ separate property, however, is not subject to distribution.  In other words, spouses’ keep their separate property.   

Speak to an attorney about the nature of your property to determine what you are legally entitled to.


Do I have to wait until my divorce is final to file or adjudicate my claim for equitable distribution?


No.  Once the marriage is legally dissolved, it is too late to avail yourself of the equitable distribution process.  This action must be asserted prior to the final judgment of divorce.  Once parties live separate and apart, parties may execute a property settlement agreement or file a claim for equitable distribution.


Legal Disclaimer:

All legal summaries contained, herein, are intended for educational purposes only and not intended to act as a substitute for personalized legal advice by competent counsel.  Although every attempt has been made to provide accurate legal summaries, the law continues to change and the most recent changes to the law may not be reflected herein.   Always consult an attorney for up to date and personalized legal advice.


bottom of page