No one thinks that their marriage is going to end in divorce, but unfortunately, it does happen. This is obviously difficult on a personal level, but it also raises a number of legal and financial issues that you’ll have to solve. For those who live in North Carolina, this guide will walk you through the divorce process in the Tar Heel State. Let’s break down how you’ll handle everything from child support to 401(k) plans, and the steps you will need to take to protect your financial life after divorce. If you are going through a divorce, a financial advisor can help you work through the process.
How to File for Divorce in North Carolina
There are many things to understand before you start to think about filing for divorce in North Carolina. Each state has its own laws on eligibility, timeline, and requirements to make sure that the divorce is legal. That’s why it’s important to work with a lawyer and possibly a divorce financial advisor before filing to make sure all of your ducks are in a row. Here are things you should pay close attention to before getting started.
You must live in North Carolina for six months prior to filing for divorce in the state. But more importantly, you and your spouse must have lived separately for at least one year prior to the divorce. It is important to note that these 12 months must be consecutive. The calendar resets if you move back in together for any reason.
There is also a $225 filing fee to file for divorce in North Carolina. If you are in dire straits financially, you can apply to have this fee waived.
2. Grounds for Divorce in North Carolina
North Carolina is a no-fault divorce state. This means that the only thing you have to do to get a divorce in the Tar Heel State is meet the requirement of living separately for a year. You do not have to give a reason for wanting a divorce.
Fault matters in some limited instances, though. These instances are known as divorces from bed and board, which allow for a court-ordered separation before the absolute divorce is finalized. It can also result in the at-fault party losing some rights, including estate rights. There are six cases in which the judge will consider a divorce from bed and board:
- Forced departure from your residence
- Humiliation to the point life is not tolerable
- Treatment that is cruel and endangering
- Substance abuse issues
3. Process to Divorce
After you and your spouse have lived separately for 12 months, you are eligible to file for divorce in the state of North Carolina. The first step in the process is for one party to file a divorce complaint with the clerk of court in his or her county. A person’s attorney can also do this on his or her behalf. After that, the sheriff’s office will serve the divorce complaint to the other spouse, most often via certified mail.
From here, if you believe that the divorce that you and your partner are entering into will be relatively amicable, you can enter a mediation. The court can also order a mediation. Mediation can help you and your soon-to-be ex work through all of the sticking points in your divorce without the costly and time-consuming process of a trial in open court.
If you and your spouse are not able to do this, you’ll have to go to court. This process will start with discovery, in which both parties will try to find out everything they can about the other party’s case, including financial information. This could include depositions. Then comes the trial, where both sides will make their case. The judge will then issue a ruling for final divorce orders after deliberation.
How to Split Up Assets During a Divorce in North Carolina
North Carolina considers any property obtained during the marriage by either spouse as marital property, which means that both parties have an equal claim to it during divorce proceedings. Any debts incurred during the marriage are also marital property.
On the other hand, any property that either spouse obtained before the marriage is considered separate property and is only owned by the spouse who acquired it. Also considered separate property are any assets that were inherited or received as a gift during the marriage. Gifts between spouses, however, are marital property.
How to Divide Property in North Carolina After Divorce
In most North Carolina divorces, property will be divided 50/50 between spouses. However, the following factors may be taken into account to ensure the equitable distribution of property:
- Income of both parties
- Child or spousal support obligations from earlier marriages
- The length of the marriage
- Who will live in the family home
- How much each spouse worked to earn the property
- Contributions by one spouse to the other’s education
- Liquidity of property
The court does not consider any actions that led to the end of the marriage, such as adultery, when dividing property. The only reason these actions are taken into account is if one spouse’s misconduct led to a loss of value to the estate.
How to Manage Child Support and Alimony Under North Carolina Divorce Laws
In North Carolina, both parents are responsible for the support of their children, regardless of who the custodial parent is. If you are the non-custodial parent paying child support, you are responsible for doing so until the child turns 18. Or, if the child is still in primary or secondary school at age 18, you are responsible for paying child support until the child graduates or turns 20, whichever happens first. Child support will cover basic costs like food, clothing and housing, plus other expenses like medical costs, health insurance, the cost of traveling to visitations and extracurricular activities.
North Carolina allows for spousal support, also known as alimony. The court will consider the following factors when awarding alimony:
- Marital misconduct of either spouse
- Earnings and potential earnings of both spouses
- Age and health of both spouses
- Sources of earned and unearned income
- Length of the marriage
- One spouse’s support for the other’s education
- Impact of child custody on each spouse’s earning potential
- Property each spouse brought to the marriage
- Needs of each spouse
- Homemaking efforts of each spouse during the marriage
401(k) and IRA and Divorce in North Carolina
North Carolina considers any retirement plan acquired during the marriage as marital property for the purpose of the divorce. Thus, retirement plans such as 401(k)s and IRAs are subject to the same 50/50 division as other marital property. However, only the value of the pension or retirement plan that was accrued while the couple was married is considered marital property and will be divided. Any savings accrued before the marriage or after the divorce is personal property.
Once decisions regarding the division of the retirement plan are finalized, the court will submit a Qualified Domestic Relations Order to the plan administrator. This explains the decision regarding your retirement savings post-divorce.
Divorce and Estate Planning in North Carolina
Estate planning after a divorce is very important. If you and your spouse split up, you’ll need to update your life insurance policy, retirement accounts, investment accounts and trusts. You’ll want to select a new beneficiary if you’ve named your spouse. Additionally, you’ll want to shift durable power of attorney and healthcare power of attorney to a different trusted relative, perhaps a parent, sibling or adult child. By doing that, your ex-spouse will no longer have the ability to make decisions for you if you become incapacitated.
It is also important to take this time to adjust your instructions for childcare in the event both you and your spouse were to die. Before the divorce, you may have agreed on who would take over for you in raising your children, but now everything has changed. Make sure you and your ex-spouse come to an agreement on an arrangement that is best for your children.
To get divorced in North Carolina, the state requires that you and your spouse first live separately for a year. You must live in the state for six months prior to filing for divorce. North Carolina is a no-fault state, which means the state doesn’t consider the actions of either spouse when dividing property during the divorce. Judges might consider fault when determining child support and alimony, though.
Financial Planning Tips
- If you are still finalizing your divorce, you might want to consider finding a financial advisor to help you through the process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- As you look to find a financial advisor, pay attention to the certifications that each advisor has. A certified divorce financial analyst (CDFA), for example, could be especially useful if you are navigating a divorce.
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