Family Law Primer
INTRODUCTION
No attorneys are more familiar with North Carolina family law and its practical applications than the attorneys of Tharrington Smith. We have been on the forefront in developing the body of family law in North Carolina for decades.
In an effort to give web site readers a general familiarity with North Carolina family law, we have prepared this Primer on North Carolina Family Law. Matrimonial laws vary dramatically from state to state. Under the United States Constitution, states are free to pass their own laws in this area with limited federal interference. Consequently, there is little uniformity from state to state. A person interested in determining how a state's laws might determine the outcome of a particular case must examine the laws of the state that would have jurisdiction over that case and the parties. Generic descriptions of family law in other web sites and in publications not describing North Carolina law are of little use and may grossly mislead someone trying to understand the rules and procedures for resolving family law disputes in North Carolina.
This Primer is intended to provide a general overview of North Carolina family law and is not intended as a substitute for specific legal advice from one of our attorneys. This Primer will prove woefully inadequate if a reader intends to use it as his or her only source of information about rights and responsibilities under these laws. Only a qualified North Carolina family law attorney can make this evaluation. The specific facts of every family law case are extremely important in determining a parent's or a spouse's rights and responsibilities under the law. District court judges are given wide discretion in addressing many of these issues. Your attorney should not only be able to describe the law in North Carolina to you but should also be able to advise you of your specific rights and responsibilities.
Hopefully this Primer will serve at least two purposes for you. It can give you a working familiarity with the terms of North Carolina family law so that when you meet with one of our attorneys you will be in a better position to discuss various issues and to use your time efficiently. In that you will likely be receiving a tremendous amount of information in your initial consultation, this Primer might also help you retain critical information and refresh your recollection of what your attorney told you.
CAUSES OF ACTION
The dissolution of a marriage is one of life's most traumatic events. This Primer on North Carolina Family Law is designed to address some topics that may be of concern to you. We hope that it will remove some of the uncertainty from the process. You will probably have many specific questions after you have read this information. Contact us and ask questions. Keep asking them until you are satisfied that you understand the answers.
There are seven possible causes of action that grow out of the dissolution of a marriage in which there are children and five causes of action in a marriage without children. For purposes of this discussion, these actions are classified as follows:
(1) Child custody
(2) Child support
(3) Postseparation support (Temporary Alimony)
(4) Spousal support (Alimony)
(5) Divorce from bed and board
(6) Division of property (Equitable Distribution)
(7) Absolute divorce
With the exception of the absolute divorce, resolution of these issues can be achieved by agreement at any time. To obtain the absolute divorce, a simple lawsuit and court hearing are necessary. If the other issues cannot be resolved by agreement, each issue can be pursued in a separate lawsuit; however, one or more of these actions are usually combined into one lawsuit.
LITIGATION
Pleadings and Service
The first step in a lawsuit is the preparation and filing of a complaint. The complaint is the court document in which the plaintiff tells the defendant why the lawsuit is being brought.
After the complaint is filed, the defendant must be served with a copy of the complaint. If the defendant has an attorney, the plaintiff's attorney may elect to offer to allow the defendant to accept service. If the defendant will not agree to accept service, the law provides the plaintiff with other means to accomplish service even if the defendant cannot be located.
The defendant has thirty days from the date of service of the complaint to serve an answer. If the defendant requests an extension, it is common for that party to be granted an additional thirty days to serve an answer.
The defendant may raise new issues by way of a counterclaim that is a part of the same pleading containing the answer. If the defendant files a counterclaim, the plaintiff must serve a reply within thirty days (or sixty days if an additional thirty day extension is granted).
A case will be contested and a trial necessary unless both parties agree on all aspects of custody, support, property division, payment of debts, attorney fees and other expenses of litigation. Even after the complaint is filed, some or all of the case may be resolved by agreement. A lawsuit is not always necessary. Most cases are resolved by agreement either before or after a lawsuit is filed.
INTERIM RELIEF
If a party becomes abusive, or refuses to provide reasonable support or to provide relevant information concerning income, assets and liabilities, a judge will hear evidence and determine whether some type of interim relief is appropriate. It may be possible for a party to obtain an interim allocation of the marital property if the other party has exclusive control of a substantial portion of marital property. Depending on the nature of the case, the court may require both parties to file sworn financial statements of earnings, expenses, assets and liabilities to assist in the compilation of critical information from which the judge will reach a decision.
POSTSEPARATION SUPPORT
Postseparation support can be thought of as temporary alimony. The emphasis of postseparation support is economic need rather than marital fault. If a dependent spouse can show economic need, a court has the authority to order some amount of postseparation support either for a specific period of time or until an alimony determination is made. Postseparation support is designed to provide either short-term spousal support with no alimony or interim spousal support until a full alimony trial can be conducted.
ALIMONY
A dependent spouse may elect to forego postseparation support altogether and proceed directly to an alimony trial. If either spouse is dissatisfied with a postseparation support award, that party can initiate an alimony trial as soon as it can be scheduled with the court.
The amount of alimony and the issue of a party's dependency can be reviewed upon the motion of either party after the marital property is divided even if there has been a prior alimony determination. Just as with postseparation support, a court is not required to find marital fault to make an alimony award.
Factors
Once a spouse is determined to be financially dependant upon the other spouse, the court must consider any evidence offered by either spouse on the following factors:
1 . Acts of sexual or deviate sexual intercourse or deviate sexual acts voluntarily entered into by a spouse with someone other than the other spouse;
2 . Imprisonment resulting from a criminal act committed prior to the proceeding in which alimony is sought;
3 . Abandonment;
4 . Malicious turning out-of-doors of the other spouse;
5 . Cruel or barbarous treatment endangering the life of the other spouse;
6 . Indignities rendering the condition of the spouse intolerable and life burdensome;
7 . Reckless spending of the income of either party, or the destruction, waste, diversion, or concealment of assets;
8 . Excessive use of alcohol or drugs so as to render the condition of the other spouse intolerable and life burdensome;
9 . Relative earnings and earnings capacities of the spouses;
10 . Ages and the physical, mental, and emotional conditions of the spouses;
11 . Amount and sources of earned and unearned income of both spouses, including, but not limited to earning, dividends, and benefits such as medical, retirement, insurance, social security, or other;
12 . Duration of the marriage;
13 . Contribution by one spouse to the education, training, or increased earning power of the other spouse;
14 . The extent to which the earning power, expenses or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child;
15 . Standard of living of the spouses established during the marriage;
16 . Relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs;
17 . Relative assets and liabilities of the spouses and the relative debt service requirements of the spouses, including legal obligations of support;
18 . Property brought to the marriage by either spouse;
19 . Contribution of a spouse as homemaker;
20 . Relative needs of the spouses;
21 . Federal, state, or local tax ramifications of the alimony award;
22 . Any other factor relating to the economic circumstances of the parties that the court finds to be just and proper.
If the dependent spouse commits a pre-separation act of adultery (Factor Number 1 above) that has not been forgiven by the supporting spouse, the dependent spouse's entitlement to alimony is lost. If a supporting spouse commits a pre-separation act of adultery that is not forgiven by the dependent spouse, the supporting spouse must pay alimony if there is economic need. In the event that both spouses commit acts of pre-separation adultery for which there is no forgiveness, a judge may weigh the degree of fault and consider that factor among others in determining whether an alimony award is appropriate, and if so, the amount and duration of any periodic payments.
Acts of marital misconduct must occur prior to the parties' separation if evidence of those acts is to be admissible in an alimony or postseparation hearing. However, postseparation marital misconduct evidence may be used to corroborate evidence that marital misconduct occurred prior to the separation.
Marital misconduct continues to be a consideration in determining entitlement, length and amount of alimony. Judges will probably be less sympathetic to the dependent spouse if it is the dependent spouse whose actions brought an end to the marriage. On the other hand, marital misconduct on the part of the supporting spouse will make it more likely that a judge will order more alimony for a longer period of time.
Either party has the right to have a jury decide the marital fault issues at an alimony trial but the judge must determine the appropriate alimony amount, if any. The judge may order alimony payable until either party dies or until the dependent spouse remarries or cohabits. The judge may limit the duration of the alimony award to a specific time period. In some cases, a judge may order rehabilitative alimony for a period of time sufficient to allow the dependent spouse to obtain additional education to return to the workplace. Generally, the longer the marriage, the longer the duration of an alimony award.
Dependency
Only a dependent spouse is eligible for spousal support. That spouse must be either actually substantially dependent upon the other spouse for his or her maintenance and support or substantially in need of maintenance and support from the other spouse.
Tax Consequences
When parties file separate tax returns, alimony payments will be considered taxable income to the dependent spouse and a deduction to the supporting spouse. Parties may file joint income tax returns for any year in which they are married for the entire calendar year, although either party may insist upon filing a separate return at any time. Any U.S. federal tax advice contained in this Primer is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
Termination of Alimony
The court has a great deal of discretion in determining the amount and duration of alimony. The court may make an alimony award for a specified or an indefinite time period. If alimony is awarded for an indefinite time, it must terminate on the death of either party and on the remarriage or cohabitation of the dependent spouse.
DIVORCE FROM BED AND BOARD
A divorce from bed and board is often a misunderstood claim. A divorce from bed and board is a court-ordered separation. It is not an absolute divorce. The divorce from bed and board grounds are as follows:
(1) Abandoning family;
(2) Maliciously turning the other spouse out of doors;
(3) Treating the other spouse in a cruel and barbarious manner, endangering his or her life;
(4) Offering indignities to the person of the other spouse, rendering his or her condition intolerable and life burdensome;
(5) Using drugs or alcohol in excess; and
(6) Committing adultery.
If the court finds that a spouse has committed one of these grounds, the offending spouse may be ordered to leave the marital residence, although such relief is extraordinary. An order granting a divorce from bed and board terminates all automatic inheritance rights that exist by virtue of the marriage.
ABSOLUTE DIVORCE
In North Carolina, absolute divorces are almost always obtained on the basis of one year's separation. After spouses have lived separate continuously for one year, with the intent to not resume the marital relationship and without actually resuming the marital relationship, either spouse may obtain an absolute divorce. Sleeping in separate bedrooms is not a separation for purposes of absolute divorce. Attempts at reconciliation marked by isolated instances of sexual intercourse will not automatically end the period of continuous separation; however, instances of sexual intercourse and nights spent together may add to the totality of circumstances sufficient to cause a court to find that the parties have voluntarily renewed the marital relationship. If it is determined that spouses have renewed the marital relationship, the twelve-month clock will be reset. Sexual intercourse and nights spent together also have relevance to alimony.
PROPERTY DIVISION
Classification
Unless the spouses agree upon a marital property division, the court will divide the property pursuant to North Carolina statutes on equitable distribution. There are three types of property that must be considered. "Separate property" includes all property owned by either spouse before the marriage, property acquired during the marriage by one spouse by inheritance or gift from a person other than the spouse, and property acquired after the date of separation with post-separation earnings. A gift from one spouse to the other during the marriage is marital property unless the donor states at the time of the conveyance that it is intended to be the separate property of the recipient spouse. Separate property also includes income from separate property and property obtained in exchange for separate property. "Marital property" includes all other property owned on the date of separation that was acquired during the marriage. "Marital property" includes all vested and non-vested pension and retirement benefits. "Divisible property" includes passive appreciation and depreciation in the value of marital property after separation, property received after date of separation but resulting from efforts made during the marriage, and passive income received from marital property after date of separation. As you might imagine, the law of equitable distribution is extremely complex, and this brief description is a gross over-simplification.
Division of Property
Unless the parties agree to the division of marital property, an equitable distribution hearing will be necessary. This hearing may occur either before or after the absolute divorce and will be conducted by a judge without a jury. Separate property will be kept by the spouse to whom it belongs while marital property will be divided between the parties by the court. While there is no precise formula for dividing the property, there is a presumption in North Carolina that the marital property or its equivalent value will be divided equally and that the property will be divided in-kind.
There are thirteen (13) statutory factors that the court must consider in deciding whether an equal division is appropriate in a case. These factors are:
(1) Income, property and debts of a party;
(2) Support obligations from prior marriages;
(3) Length of marriage and age and health of each party;
(4) Needs of custodial spouse to own or to possess the marital home place and household effects;
(5) Expectation of retirement benefits which are separate property;
(6) Efforts made by each spouse to acquire property;
(7) Contributions of one spouse to the education of the other;
(8) Direct contributions that increase the value of separate property;
(9) Liquid or non-liquid nature of property;
(10) Difficulty in valuing interest in a business;
(11) Tax consequences;
(12) Actions taken by either party to preserve or waste marital assets; and
(13) Other factors.
Debt
Marital debts must also be divided between the spouses. The court is not bound to divide debts in the same percentage as it divides assets. The court must consider the purpose for which the debt was incurred and the disposition of any asset encumbered by the debt. If one party establishes that a debt was incurred during the marriage, the other party has the burden of proving to the court that the debt was for a marital purpose and not for the individual separate expenses of a spouse. Postseparation increases in marital debt and financing charges and interest related to marital debt are classified as divisible debt and will also be equitably divided by the court.
Marital Misconduct and Division of Property
Marital misconduct, such as adultery, is not relevant in the litigation of property rights. The division of property in North Carolina is based upon the economic factors described above.
Tax Consequences
Generally, a division of marital property is a nontaxable event. Usually, if property is transferred between spouses pursuant to an agreement or court order, it will neither be taxed as income nor allowed as a deduction. There may be tax consequences, however, when funds are transferred from retirement and individual retirement accounts and when marital assets are transferred to third parties. There are ways to transfer retirement assets without incurring immediate tax liability. Some retirement plans will require a special court order specifically designed to transfer plan assets. The court orders are called "Qualified Domestic Relations Orders” (sometimes referred to as "QDRO's") All property distribution matters must be analyzed for tax consequences. Any U.S. federal tax advice contained in this Primer is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
LEGAL FEE REIMBURSEMENT
If a trial is necessary, one spouse may be ordered to pay some portion of the other spouse's legal fees. The court can award attorney fees for the custody, child support, and spousal support claims but not for the divorce from bed and board, absolute divorce, and equitable distribution claims. The court has wide discretion in making such awards in permissible of cases and it may award some, all or none of these fees to an otherwise eligible party.
CHANGE OF NAME
A wife may wish to resume her maiden name after a divorce. This can be done at any time and it is not essential that the name change be a part of the divorce judgment. If the wife requests the name change in the absolute divorce complaint or counterclaim, the name change will become part of the absolute divorce judgment.
DATING RELATIONSHIPS
Although post-separation adultery may not be a basis for awarding or declining to award alimony, it can be used as corroborating evidence to support an allegation that adultery occurred prior to the separation. In North Carolina, it is possible for a spouse to bring a lawsuit against someone who has alienated the affections of and/or had sexual relations with a spouse's husband or wife. The adultery cause of action is called criminal conversation. Any extramarital affairs or dating relationships on the part of either party should be brought to our attention so that we may advise you of the law in this area. Post-separation and pre-divorce relationships may have implications for alienation of affections and criminal conversation claims against dating relations.
CONFIDENTIALITY
We must have all of the facts to represent you properly. Anything you tell to us is strictly confidential and will not be disclosed without your permission.
SECURITY OF DOCUMENTS, CASH, INVESTMENT
AND CREDIT ACCOUNTS
It is important that you discuss the issues of document security and control of cash, investment and credit accounts with us at your initial consultation. Early decisions about your case can have an impact on the ultimate result.
WILLS
North Carolina's Probate Code invalidates certain portions of wills which are made prior to a divorce. Following the signing of a separation agreement or divorce, you will probably need a new will. You may want to revise your will prior to your absolute divorce.
ALTERNATIVE DISPUTE RESOLUTION
There are non-litigation means available to resolve matrimonial disputes. Trials can be expensive, time-consuming and extremely stressful to the parties involved. Mediation and arbitration are two common alternatives to litigation. As your case unfolds, we will evaluate the appropriateness of proposing an alternative means for addressing these issues.
