Marital Property will be divided equally incident to divorce – Won’t it?

The belief that marital property will always be divided equally because of a divorce occur is common. Whether I am talking to a friend over dinner or advising a prospective client during a family law consultation, I have to share the very unfortunate reality:

An equal, 50/50 division of the marital estate is not going to happen in every divorce.

Specifically, in North Carolina, our property division legal matter is named “Equitable Distribution.” Note: it does not state “Equal” distribution. What’s the difference between Equitable and Equal? Well, it depends. (I know the common and very annoying response many lawyers say).

The term “equal” seems pretty straight forward. For example, if there is $100 in a joint bank account, then each party will leave with $50 if they divorce. But unless you were married for less than a day, no marital property division is that easy even if the parties want an “equal” division. The “equal” division equation is often complicated by figuring out the true value of items and whether certain property can be liquidated or sold easily. What is the fair market value of the house? Or the jewelry? If all of the money is tied up in retirement accounts, how can those funds be divided and valued?

The term “equitable” therefore adds an entirely different layer of complexity. North Carolina General Statute §50-20(c) states:

“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. If the court determines that an equal division is not equitable, the court shall divide the marital property and divisible property equitably.”

This statute then lists various factors that the Judge can consider when determining if a property division is equitable, such as:

• The income, property, and liabilities of each party at the time the division of property is to become effective.
• The duration of the marriage and the age and physical and mental health of both parties.
• 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 pension, retirement, or other deferred compensation rights that are not marital property.
• Any direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse.
• The liquid or nonliquid character of all marital property and divisible 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.
• 
  

…to name a few.

Therefore, even in North Carolina, there is always the risk that if a property division matter is taken to trial, the marital estate may not actually be divided equally.

Can this happen elsewhere? Although I am not licensed to practice law in Singapore, said country’s property division laws incident to divorce are some of the most unique I have researched.

More specifically in marital property divisions, the Courts in Singapore will first prescribe a starting ratio to the parties based on each party’s direct financial contributions to the matrimonial assets. Meaning, if Spouse 1 contributed to and purchased 70% of the marital assets and Spouse 2 contributed to and purchased 30% of the marital assets, then the starting division of the marital estate would be 70/30.

Does not sound very “equal” to me.

The next stage of the Singapore analysis would be prescribing another ratio based on the parties’ indirect contributions to the family’s well-being, such as taking care of the home, raising children, etc. Therefore, in continuing this example, if Spouse 2 contributed 70% of the indirect contributions to the family’s well-being and Spouse 1 contributed 30% of the indirect contributions to the family’s well-being, then you would likely see the shift to a 50/50 or “equal” percentage division of the marital estate.

But what if Spouse 2 did not contribute indirectly or otherwise to the family’s well-being?

In Chan Tin Sun vs. Fong Quay Sim (2015), the Singapore Court of Appeal took into consideration the Husband’s efforts at concealing assets in comparison to the Wife’s systematic poisoning of Husband with arsenic between 2004 and 2005. Wife was convicted criminally for causing such harm to Husband and sentenced to one year imprisonment. Little did she know, this factor would also be brought up in the parties’ divorce and property distribution. The Court of Appeal gave more weight to the husband’s needs as they largely stemmed from the wife’s misconduct. It also found that the wife’s misconduct of poisoning was one that failed to “contribute to the partnership of efforts that is the marriage” and also “engages in conduct that fundamentally undermines the co-operative partnership and harms the welfare of the other.” As a result, the Court of Appeal ordered that the wife’s share of the matrimonial assets be 28% of the “combined matrimonial pool of assets.”

If you are going through a divorce and you truly want an “equal” division of the marital property, now is a good time to sit down with a family law attorney to discuss how to make that happen. 

If you or someone you know is enduring an Equitable Distribution matter, our Modern Legal Team is here to help.

Please note: these educational materials are based on North Carolina law where my legal practice is based. While the insights may have wide applicability, readers should consult with an attorney regarding the specific laws in their state or country. 

Written by: Theresa E. Viera