' 50-20. Distribution by Court of marital property upon divorce.
Upon application of a party, the Court shall determine what is the marital property
and shall provide for an equitable distribution of the marital property between the
parties in accordance with the provisions of this section.
For purposes of this section:
"Marital property" means all real and personal property acquired by either
spouse or both spouses during the course of the marriage and before the date of the
separation of the parties, and presently owned, except property determined to be separate
property in accordance with subdivision (2) of this subsection. Marital property includes
all vested pension, retirement, and other deferred compensation rights, including military
pensions eligible under the federal Uniformed Services Former Spouses' Protection Act. It
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 may be rebutted by the greater weight
of the evidence.
"Separate property" means all real and personal property acquired by a spouse
before marriage or acquired by a spouse by bequest, devise, descent, or gift during the
course of the marriage. However, property acquired by gift from the other spouse during
the course of the marriage shall be considered separate property only if such an intention
is stated in the conveyance. Property acquired in exchange for separate property shall
remain separate property regardless of whether the title is in the name of the husband or
wife or both and shall not be considered to be marital property unless a contrary
intention is expressly stated in the conveyance. The increase in value of separate
property and the income derived from separate property shall be considered se parate
property. All professional licenses and business licenses which would terminate on
transfer shall be considered separate property. The expectation of nonvested pension,
retirement, or other deferred compensation rights shall be considered separate property.
"Distributive award" means payments that are payable either in a lump sum or
over a period of time in fixed amounts, but shall not include alimony payments or other
similar payments for support and maintenance which are treated as ordinary income to the
recipient under the Internal Revenue Code. The distributive award of vested pension,
retirement, and other deferred compensation benefits may be made payable:
As a lump sum by agreement;
Over a period of time in fixed amounts by agreement;
As a prorated portion of the benefits made to the designated recipient at the time the
party against whom the award is made actually begins to receive the benefits; or
By awarding a larger portion of other assets to the party not receiving the benefits,
and a smaller share of other assets to the party entitled to receive the benefits.
Notwithstanding the foregoing, the Court shall not require the administrator of the
fund or plan involved to make any payments until the party against whom the award is made
actually begins to receive the benefits unless a plan under the Employee Retirement Income
Security Act (ERISA) permits earlier distribution. The award shall be determined using the
proportion of time the marriage existed, (up to the date of separation of the parties),
simultaneously with the employment which earned the vested pension, retirement, or
deferred compensation benefit, to the total amount of time of employment. The award shall
be based on the vested accrued benefit, as provided by the plan or fund, calculated as of
the date of separation, and shall not include contributions, years of service or
compensation which may accrue after the date of separation. The award shall include gains
and losses on the prorated portion of the benefit vested at the date of separation. No
award shall exceed fifty percent (50%) of the benefits the person against whom the award
is made is entitled to receive as vested pension, retirement, or other deferred
compensation benefits, except that an award may exceed fifty percent (50%) if (i) other
assets subject to equitable distribution are insufficient; or (ii) there is difficulty in
distributing any asset or any interest in a business, corporation, or profession; or (iii)
it is economically desirable for one party to retain an asset or interest that is intact
and free from any claim or interference by the other party; or (iv) more than one pension
or retirement system or deferred compensation plan or fund is involved, but the benefits
awarded may not exceed fifty percent (50%) of the total benefits of all the plans added
together; or (v) both parties consent. In no event shall an award exceed fifty percent
(50%) if a plan prohibits an award in excess of fifty percent (50%).
In the event the person receiving the award dies, the unpaid balance, if any, of the award
shall pass to the beneficiaries of the recipient by will, if any, or by intestate
succession, or by beneficiary designation with the plan consistent with the terms of the
plan unless the plan prohibits such a designation. In the event the person against whom
the award is made dies, the award to the recipient shall remain payable to the extent
permitted by the pension or retirement system or deferred compensation plan or fund
involved. The Court may require distribution of the award by means of a qualified domestic
relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986. To
facilitate the calculation and payment of distributive awards, the administrator of the
system, plan or fund may be ordered to certify the total contributions, years of service,
and pension, retirement, or other deferred compensation benefits payable.
The provisions of this section and G.S. 50-21 shall apply to all pension, retirement, and
other deferred compensation plans and funds, including military pensions eligible under
the Federal Uniform Services Former Spouses Protection Act, and including funds
administered by the State pursuant to Articles 84 through 88 of Chapter 58 and Chapters
120, 127A, 128, 135, 143, 143B, and 147 of the General Statutes, to the extent of a
member's accrued benefit at the date of separation, as determined by the Court.
There shall be an equal division by using net value of marital property unless the
Court determines that an equal division is not equitable. If the Court determines that an
equal division is not equitable, the Court shall divide the marital property equitably.
Factors the Court shall consider under this subsection are as follows:
The income, property, and liabilities of each party at the time the division of
property is to become effective;
Any obligation for support arising out of a prior marriage;
The duration of the marriage and the age and physical and mental health of both
The need of a parent with custody of a child or children of the marriage to occupy or
own the marital residence and to use or own its household effects;
The expectation of nonvested pension, retirement, or other deferred compensation
rights, which is separate property;
Any equitable claim to, interest in, or direct or indirect contribution made to the
acquisition of such marital property by the party not having title, including joint
efforts or expenditures and contributions and services, or lack thereof, as a spouse,
parent, wage earner or homemaker;
Any direct or indirect contribution made by one spouse to help educate or develop the
career potential of the other spouse;
Any direct contribution to an increase in value of separate property which occurs
during the course of the marriage;
The liquid or nonliquid character of all marital property;
The difficulty of evaluating any component asset or any interest in a business,
corporation or profession, and the economic desirability of retaining such asset or
interest, intact and free from any claim or interference by the other party;
The tax consequences to each party;
a) Acts of either party to maintain, preserve, develop, or expand; or to waste, neglect,
devalue or convert such marital property, during the period after separation of the
parties and before the time of distribution; and
Any other factor which the Court finds to be just and proper.
Notwithstanding any other provision of law, a second or subsequent spouse acquires
no interest in the marital property of his or her spouse from a former marriage until a
final determination of equitable distribution is made in the marital property of the
spouse's former marriage.
Before, during or after marriage the parties may by written agreement, duly
executed and acknowledged in accordance with the provisions of G.S. 52-10 and 52-10.1, or
by a written agreement valid in the jurisdiction where executed, provide for distribution
of the marital property in a manner deemed by the parties to be equitable and the
agreement shall be binding on the parties.
In any action in which the Court determines that an equitable distribution of all
or portions of the marital property in kind would be impractical, the Court in lieu of
such distribution shall provide for a distributive award in order to achieve equity
between the parties. The Court may provide for a distributive award to facilitate,
effectuate or supplement a distribution of marital property. The Court may provide that
any distributive award payable over a period of time be secured by a lien on specific
The Court shall provide for an equitable distribution without regard to alimony for
either party or support of the children of both parties. After the determination of an
equitable distribution, the Court, upon request of either party, shall consider whether an
order for alimony or child support should be modified or vacated pursuant to G.S. 50-16.9
If the Court orders the transfer of real or personal property or an interest
therein, the Court may also enter an order which shall transfer title, as provided in G.S.
1A-1, Rule 70 and G.S. 1-228.
If either party claims that any real property is marital property, that party may
cause a notice of lis pendens to be recorded pursuant to Article 11 of Chapter 1 of the
General Statutes. Any person whose conveyance or encumbrance is recorded or whose interest
is obtained by descent, prior to the filing of the lis pendens, shall take the real
property free of any claim resulting from the equitable distribution proceeding. The Court
may cancel the notice of lis pendens upon substitution of a bond with surety in an amount
determined by the Court to be sufficient provided the Court finds that the claim of the
spouse against property subject to the notice of lis pendens can be satisfied by money
Upon filing an action or motion in the cause requesting an equitable distribution
or alleging that an equitable distribution will be requested when it is timely to do so, a
party may seek injunctive relief pursuant to G.S. 1A-1, Rule 65 and Chapter 1, Article 37,
to prevent the disappearance, waste or conversion of property alleged to be marital
property or separate property of the party seeking relief. The Court, in lieu of granting
an injunction, may require a bond or other assurance of sufficient amount to protect the
interest of the other spouse in the marital or separate property. Upon application by the
owner of separate property which was removed from the marital home or possession of its
owner by the other spouse, the Court may enter an order for reasonable counsel fees and
costs of Court incurred to regain its possession, but such fees shall not exceed the fair
market value of the separate property at the time it was removed.
For good cause shown, including, but not limited to, providing for the subsistence
of a spouse while an action is pending, the Court may, at any time after an action for
equitable distribution has been filed and prior to the final judgment of equitable
distribution, enter orders declaring what is separate property and dividing part of the
marital property between the parties. The partial distribution may provide for a
distributive award. Any such orders entered shall be taken into consideration at trial and
proper credit given.
Hearings held pursuant to this subsection may be held at sessions arranged by the chief
district Court judge pursuant to G.S. 7A-146 and, if held at such sessions, shall not be
subject to the reporting requirements of G.S. 7A-198.
In any order for the distribution of property made pursuant to this section, the
Court shall make written findings of fact that support the determination that the marital
property has been equitably divided.
The rights of the parties to an equitable distribution of marital property are a
species of common ownership, the rights of the respective parties vesting at the time of
the parties' separation.
' 50-21. Procedures in actions for equitable distribution of
property; sanctions for purposeful and prejudicial delay.
At any time after a husband and wife begin to live separate and apart from each
other, a claim for equitable distribution may be filed, either as a separate civil action,
or together with any other action brought pursuant to Chapter 50 of the General Statutes,
or as a motion in the cause as provided by G.S. 50-11(e) or (f). Within 90 days after
service of a claim for equitable distribution, the party who first asserts the claim shall
prepare and serve upon the opposing party an equitable distribution inventory affidavit
listing all property claimed by the party to be marital property and all property claimed
by the party to be separate property, and the estimated date-of-separation fair market
value of each item of marital and separate property. Within 30 days after service of the
inventory affidavit, the party upon whom service is made shall prepare and serve an
inventory affidavit upon the other party. The inventory affidavits prepared and served
pursuant to this subsection shall be subject to amendment and shall not be binding at
trial as to completeness or value. The Court may extend the time limits in this subsection
for good cause shown. The affidavits are subject to the requirements of G.S. 1A-1, Rule
11, and are deemed to be in the nature of answers to interrogatories propounded to the
parties. Any party failing to supply the information required by this subsection in the
affidavit is subject to G.S. 1A-1, Rules 26, 33, and 37. During the pendency of the action
for equitable distribution, discovery may proceed, and the Court shall enter temporary
orders as appropriate and necessary for the purpose of preventing the disappearance,
waste, or destruction of marital or separate property or to secure the possession thereof.
Real or personal property located outside of North Carolina is subject to equitable
distribution in accordance with the provisions of G.S. 50-20, and the Court may include in
its order appropriate provisions to ensure compliance with the order of equitable
For purposes of equitable distribution, marital property shall be valued as of the
date of the separation of the parties.
Nothing in G.S. 50-20 or this section shall restrict or extend the right to trial by
jury as provided by the Constitution of North Carolina.
Within 120 days after the filing of the initial pleading or motion in the cause for
equitable distribution, the party first serving the pleading or application shall apply to
the Court to conduct a scheduling and discovery conference. If that party fails to make
application, then the other party may do so. At the conference the Court shall determine a
schedule of discovery as well as consider and rule upon any motions for appointment of
expert witnesses, or other applications, including applications to determine the date of
separation, and shall set a date for the disclosure of expert witnesses and a date on or
before which an initial pretrial conference shall be held.
At the initial pretrial conference the Court shall make inquiry as to the status of the
case and shall enter a date for the completion of discovery, the completion of a mediated
settlement conference, if applicable, and the filing and service of motions, and shall
determine a date on or after which a final pretrial conference shall be held and a date on
or after which the case shall proceed to trial.
The final pretrial conference shall be conducted pursuant to the Rules of Civil
Procedure and the General Rules of Practice in the applicable district or superior Court,
adopted pursuant to G.S. 7A-34. The Court shall rule upon any matters reasonably necessary
to effect a fair and prompt disposition of the case in the interests of justice.
Upon motion of either party or upon the Court's own initiative, the Court shall
impose an appropriate sanction on a party when the Court finds that:
The party has willfully obstructed or unreasonably delayed, or has attempted to
obstruct or unreasonably delay, discovery proceedings, including failure to make discovery
pursuant to G.S. 1A-1, Rule 37, or has willfully obstructed or unreasonably delayed or
attempted to obstruct or unreasonably delay any pending equitable distribution proceeding,
The willful obstruction or unreasonable delay of the proceedings is or would be
prejudicial to the interests of the opposing party.
Delay consented to by the parties is not grounds for sanctions. The sanction may
include an order to pay the other party the amount of the reasonable expenses and damages
incurred because of the willful obstruction or unreasonable delay, including a reasonable
attorneys' fee, and including appointment by the Court, at the offending party's expense,
of an accountant, appraiser, or other expert whose services the Court finds are necessary
to secure in order for the discovery or other equitable distribution proceeding to be
North Carolina is an equitable distribution state. There shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable.
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