In North Carolina the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the General Court divides the property within the Judgment of Divorce. An equitable distribution state, North Carolina follows a dual classification regime. When the parties are unable to reach a settlement, the General Court of Justice distributes the marital assets between the two parties in an equitable fashion. Equitable does not mean equal, but rather what is deemed by the General Court of Justice to be fair.

The appreciation of separate property is separate.

Other than any economic misconduct, the behavior of the spouses is unrelated to the division of property.

According to the North Carolina Statutes - Chapter 50 - 50-20, the court considers all of the following factors in dividing marital property:

Separate property includes:

The court will allow the party claiming separate property to trace the property from one asset to another. For instance, if the wife had $10,000 in cash before marriage and used the funds, during the marriage, to buy a car, then the car would be separate property. Separate property used to purchase a house in both names, however, becomes marital property. This rule related to real property is the one exception to the tracing provisions.

Equitable Distribution is a three-step process including:

The court may deviate from this if the factors present indicate that an equal division would not be equitable.

If the marital home is titled jointly then it is marital property and gets divided, even if one party made a substantial separate property contribution to the purchase of the home. The court has the authority, however, to divide the residence in any way it wishes so an equal division of the home is not required.

In North Carolina as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) are deducted from the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

North Carolina values and divides pension plans like all other property. In North Carolina vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In North Carolina the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:

In North Carolina if spouses share in each others retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.