Immediately following the definition of marital property in G.S. 50-20(b)(1), the statute states “[i]t is presumed that all property acquired after the date of marriage and before the date of separation is marital property except property which is separate property under subdivision (2) of this subsection.” This presumption probably is the most important core principle of classification of property in North Carolina equitable distribution because it defines the burdens of proof. Continue Reading
Almost every equitable distribution case involves marital debt. And because there often is a significant amount of time between the date of separation – the point in time when the marital estate is created and valued – and the date the marital estate actually is distributed, most every case also involves post-separation changes in the amount owed on that marital debt. The amount either increases because neither party pays the bills and interest and finance charges accrue, or the amount decreases because one of the parties make payments. North Carolina law has struggled to determine the best way to address these changes in the distribution process.
The equitable distribution statute contains specific requirements for the classification and distribution of “pension, retirement or other deferred compensation benefits.” GS 50-20.1. Because these retirement accounts frequently are the most valuable asset in an equitable distribution case, it is significant that the court of appeals held in Watkins v. Watkins, 746 S.E.2d 394 (N.C. App. 2013), that a 401K, one of the most common retirement accounts today, generally is not “deferred compensation” and therefore does not fall within the restrictions of GS 50-20.1.