When spouses seek a divorce they often worry about what will happen to their property.
They may understand that they must divide their marital property in some manner, or the property they shared or obtained during the marriage. Anything considered separate property typically remains in their name and in their possession.
However, there is a third category spouses must consider: divisible property.
How is divisible property different?
As the term suggests, divisible property includes assets and real property that spouses must divide in a divorce.
But the most important thing to understand is that this term refers to the changes in a property’s value that occur after the date of separation and before the date spouses divide their property.
Under North Carolina law, divisible property includes:
- The appreciation or diminution of assets or real property, such as appreciating stock investments.
- Assets or property rights obtained during this period, such as a pay raise.
- Increases or decreases in passive income or interest from investments or real property.
- Any changes in the interest on debt occurring during this period.
Divorcing spouses should make sure they speak with a family law attorney about how North Carolina law may apply to divisible property in their marital estate.
High net worth individuals:
It is especially important for individuals who own complex assets – such as stocks, stock options and rental properties – to understand how the rules of divisible property impact property division.
Spouses with a high net worth who wish to seek a divorce should take the following steps prior to speaking with a family law attorney about their case:
- Make a list and detailed inventory of these assets
- Calculate the change in values
- Maintain a written record of these changes
Keeping track of this information is critical in helping your attorney ensure that they are calculating the distribution of the marital estate properly and in order to protect your finances and property for the future.