In many ways, when you say “I do,” you are embarking on a business venture with your new spouse. While a business can be set up to ensure each person involved gets out of the business what he or she puts into it, the same is not always true of marriage. In the unfortunate event that your marriage comes to an end, in North Carolina, there is a strong presumption that each spouse will walk away with half of the marital property – both assets and debts.
Determining what marital property you and your spouse have, and then determining the value of that property, can seem overwhelming. The good news is that an experienced family law attorney can guide you through this process. Here are a few things to consider about two common types of marital property.
For many people, the marital home is their most valuable asset, and when a marriage ends, each spouse may feel entitled to half of the value of that home. There are a number of ways to determine the value of your home. It may include having your home appraised, consulting with a realtor or coming to a mutual agreement with your spouse on the home’s value. Ask your attorney which method is best for you and your unique situation. Once you determine the value, you can decide how you are going to divide it. In many cases, the house will either be listed for sale or one spouse may keep the house and pay the other spouse his or her share of the value (often through a refinance or offsetting the value of other assets).
Each spouse is entitled to half of any retirement funds earned during the marriage, even if those funds are not yet vested. If you have a traditional retirement account, such as a 401k, the value is usually easy to determine. Other retirement benefits, such as pensions, may not be as straightforward. The marital component of a pension is determined by considering factors such as the length of the marriage and length of employment. If a spouse is not yet receiving pension benefits, he or she may offer to pay a lump sum to the other spouse or the two may decide to split the actual payments in the future. Regardless of the type of retirement benefit to be divided, there are vehicles in which you may transfer or divide funds without any tax implications, such as the use of a Qualified Domestic Relations Order (referred to as a “QDRO”) for qualified plans.
Should the time come for you to consider the division of marital property, don’t forget – marital debts may also be divided. Your family law attorney can work with you to create a complete inventory of marital property and then come up with the best plan for dividing that property. An experienced attorney can also offer creative solutions to ensure you and your family reach the best resolution. Money might not buy happiness, but ensuring your marital property has the correct “price tag” in the event of divorce can set you on the path to a happy, financially healthy future.