Equal Distribution of Properties

North Carolina Divorce Law Divorce and Separation Answers
1

Me and Wife are Separated getting a divorce.
1 kid in the marriage and She have one more with her ex.

Question:
We have 2 properties.
Property A(Small house) fully paid, current value $140k. “I live here currently”
Property B(Bigger house) with purchase price $200k and has a mortgage, current value $220k. We owe bank $190k. That means me and her has an equity of $30k. “She lives here currently”

I am currently living in property A and She is living in Property B.

How does the equal distribution works in this case? All the other assets and debs are already been taken care of, but these properties.

Not sure if it works like this way, but I was thinking of giving her half of the equity from fully paid Property A, since I live here which is 140/2= 70k. She should give me half of the equity from Property B where she is living, which is 30/2=15k. Then split the difference 70-15= 55k. So I should be giving her 55k. Just wondering if, this is how it works? If not, how does it work?

Thanks

2

To properly divide the marital assets, you should balance the equity in the two homes plus all of the other date of separation marital values of the other assets, even if they have already been divided.

This can be done by creating a Husband column and a Wife column and putting the value of any asset that you’re keeping (including Property A) in your column and any asset she is keeping (including Property B) in her column. This should include marital debt. Then you can total the net value that each spouse is keeping and whoever is keeping more, should pay the other one-half the difference.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.

3

All the other asses and debts has been taken care of. It’s just these 2 properties left.

Property A, all clear no mortgage with estimated value of 140k, I am living in right now.
Property B, Bank mortgage with estimated value of 220k and we still owe bank 190k. She living in there.

How can we divide equally?

4

Even though the other assets have already been divided, assuming they are marital, they still need to be factored into the total net value that each spouse is keeping. The marital values of the two houses are then added onto that and balanced against all of the other marital assets.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.

5

Thank you for responding,

 What I was trying to figure out is, do I need to pay the half of the debt for Property B? Since I will be not living there at Property B and its a new property purchased recently in 2020.

She’s keep saying that court would make me pay half of the debt from property B, is that true?
If Yes, then isn’t it like I acquire half of the equity in the Property B, since I am paying half of the debt? Or
If No, isn’t is that I should only give her half of the equity from Property A and receive half of the equity from property B, subtract the difference and give her the remaining?

Thanks

6

You are both responsible for one-half of the marital debt, but the spouse to actually pay a mortgage, for example, is the spouse that is living in that home and will be keeping that home.

When valuing real property for equitable distribution purposes and to make sure the distribution of the marital estate is equalized, then you only consider the equity value in the home (date of separation value minus the date of separation mortgage balance).

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.

7

We both are paying mortgage right now for Property B. She is paying half and I am paying half. We are only separated not divorced yet. I am living in Property A and She is living in property B. Property A is all clear, no mortgage. But Property B has a mortgage with equity of 10k and we owe bank 190k.

We want her to have the Property B in its entirety and for me to have the Property A in its entirety.

How can we do ED fairly?

Thank you your kind help

8

The values need to be balanced with all of the other assets that each is keeping, even if it has already been distributed.

For purposes of example, assuming only these two properties existed, this is how it would be balanced:

Assume Property A has a value of $200,000 (fair market value at date of separation).
Assume Property B has a value of $50,000 ($200,000 fair market value at date of separation - $150,000 mortgage balance at date of separation).

There is a different in values of $150,000, with Spouse 1 keeping Property A and Spouse 2 keeping Property B.

Therefore, Spouse 1 would owe Spouse 2 $75,000 (one-half of the difference) in order to equalize the distribution so that Spouse 1 ends up with $125,000 of net marital assets ($200,000 Property A equity - $75,000 equalizing distributive award to Spouse 2) and Spouse 2 ends up with $125,000 of net marital assets ($50,000 Property B equity + $75,000 distributive award from Spouse 1).

The one-half mortgage payments that you are paying for your spouse are likely counted as support payments. Otherwise, if your spouse has to refinance the mortgage, you could receive a credit for the one-half of the principal that you paid from date of separation to date of closing on the refinance.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.

9

What if the Property A is smaller and has FMV of 135k only with Spouse 1 keeping the property (no mortgage) and
Property B has Higher FMV of 230k but mortgage balance of 192k need to be paid to bank and Spouse 2 keeping this property. 230-192= 38k equity.

How does it works in this case. Sorry for the confusion and I really appreciate for your help/guidance.

10

Using these numbers and assuming these are the only marital assets to be divided, then Spouse 1 would owe Spouse 2 $48,500 to equalize the distribution of the marital assets.

The difference between the value that Spouse 1 is keeping ($135,000) and the value that Spouse 2 is keeping ($38,000), is $97,000. Half of $97,000 is $48,500.

Therefore, the distribution is equalized with Spouse 1 ending up with one-half of the marital estate valued at $86,500 ($135,000 - $48,500) and Spouse 1 ending up with one-half of the marital estate valued at $86,500 ($38,000 + $48,500).

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.