Within 90 days after filing an equitable distribution action, the Plaintiff must file an equitable distribution Affidavit with the Court and serve a copy on the Defendant. Within 30 days after that, the Defendant must file an equitable distribution affidavit and forward it to the Plaintiff. These affidavits are intended to set forth each party’s list of marital and separate property, acquisition information, date of separation values and debt information. These Affidavits become the road map for your property division case.
There is no one form for an Equitable Distribution Affidavit that is used through North Carolina. Different Judicial Districts prefer different forms. You should try to determine the format of the Affidavit preferred in the County where your case is pending. The North Carolina Administrative Office of the Courts is a good resource about the court personnel, court procedures and forms for each of the Counties in North Carolina.
Once the parties have completed their affidavits, one of the attorneys will combine the two affidavits to create a Pretrial Order. From this combined document, the judge is able to determine what issues are resolved and what issues will have to be determined at trial. Using both parties’ affidavits, the Pretrial Order lists the items upon which the parties agree as to classification (marital versus separate property), value and distribution. There will be a separate list for items where the classification and value are agreed upon but the distribution is in dispute. The Pretrial Order is the judge’s “road map” for the equitable distribution trial.
Before the entry of the Pretrial Order, you can change your opinion regarding any of the assets. However, because this may weaken your credibility, it is important to try to obtain the best possible information when preparing your original equitable distribution affidavit.
Parts of an Equitable Distribution Affidavit
- Marital Property: List property acquired during the marriage.
- Separate Property: List items you contend are your separate property
- Spouse’s Separate Property: List items you agree are your spouse’s separate property
- Debts: List marital debts incurred during the marriage.
Lists of marital or separate property may include the following information:
- Description: When describing an asset, put in enough details so that your spouse will know what item you are describing. For instance, if you have multiple sofas, then describe them using color and/or location within the home.
- Location: For real estate, put the address. For personal property items that are not located in Plaintiff or Defendant’s homes, note the location. Who has possession of a personal property item will be noted in a separate column.
- Date Acquired: Only property acquired during the marriage should be listed on the Marital Property spreadsheet. If you know when an item was acquired, make note. If not, you can estimate, since the age of the item may help support your contention of value.
- Original Price: If you have the receipts from the purchase of any items or credit card bills or cancelled checks, it will help support your affidavit. If you do not have the receipt, please do your best to estimate the original purchase price.
- Source of funds: This is an important element in determining whether the asset is marital or separate. If the purchase was charged on a credit card or paid for from employment income or a joint account, you can simply indicate that the source of funds was “marital”. Noting which account was used to pay for the item is also useful, when known. If the funds came from a separate source such as money that was inherited or an exchange of property that was inherited or that one party had before marriage, then please note the source. We will need to discuss whether or not that asset should be on the separate property list. If the item was gifted to both of you, then simply note who the gift was from in the source of funds column. If it was a gift to only one of you, then it may be that person’s separate property and should be listed on the separate property list.
- Fair Market Value as of Date of Separation: It is important to value each item as of the date that you and your spouse separated. In determining your opinion of value, you should consider the amount for which you could have sold the property on the date of separation. Many household items should be considered at “yard sale” or eBay value. Antiques and collectibles may be considered at a higher value. You should be able to obtain a professional opinion of value for vehicles, boats and other expensive items. You can also use internet resources to determine the values of certain items, especially motor vehicles. It may be necessary to obtain appraisals of real estate or other assets.
- Outstanding Lien on Date of Separation: If the listed asset is security for any debt (such as a mortgage or auto loan), list the amount owed as of the date of separation.
- Net Fair Market Value: This is simply the Date of Separation value less the debt owed on the asset. Typically the party receiving the asset will also receive the secured debt, thus the court typically looks at the “net” value of assets.
- Current Possession/ Proposed Distribution: Indicate who has current possession of the item and who you want to have distribution of the item at the conclusion of the case. If you do not currently have possession of a certain item, but want possession of it as part of the resolution of the case, remember that the item may be in a different condition by the time you regain possession. An item, such as a computer, may be completely obsolete by the time the case is concluded. If it is an item for which possession is very important to you, then we need to take some action to try to gain possession or at least confirm the condition of the item prior to the final resolution of the case. If you have possession of any items that you believe your spouse will ultimately obtain in the distribution, then we should consider going ahead and transferring those items to the spouse so that you are not responsible for maintaining them pending the final resolution of the action.
Notes on Valuation of Assets:
- It is typical for a party to believe that the property in their possession is worth far less than the property in their spouse’s possession. If you overvalue items in your spouse’s possession, it may hurt your credibility. You need to determine a fair opinion of value for all items regardless of who has possession and who will ultimately retain possession.
- If you have no opinion of value, then please note that in the column. Unless you later supplement this list with an opinion, then your opinion will not be considered by the court. In that case, the court will likely go with whatever your spouse says the property is worth. If the property has value and you are uncomfortable determining that value, then you should seek the advice of a professional to determine a value.
- The court will determine who will receive each asset and can give you assets that you do not want. If you place an extremely high value on an item and say that you do not want possession, you need to be prepared for the possibility that the Court will give you possession at your value and may give your spouse cash or other items in order to offset the value. Trying to over value assets that you do not want can backfire.
- If there are any special issues involving an item of property that should be considered, be sure to bring that to our attention. Such special considerations include any increase or decrease in value of the property since the date of separation, any income or anticipated income from the property, property which is in the possession of someone other than you or your spouse, property that is partially owned by someone other than you or your spouse and any property for which the method, timing or source of funds for acquisition need to be further explained. The more information and documentation regarding the property that you can provide at this point, the better we can prepare your case.
- Items having purely sentimental value may be difficult to list. Such items include scrapbooks, portraits, Christmas decorations, travel mementos, etc. These items do need to be listed if they need to be divided. If you do not have possession of any sentimental items that you want in the property division, bring this to our attention. If your spouse were to destroy the items, it would be hard to address in court since they have little or no monetary value. It is best to try to take possession of any such items as soon as you can.
Marital Property vs. Separate Property
There is usually a list for marital property and one for separate property. Marital property is property acquired during the course of your marriage, between the date of marriage and the date of separation with marital funds. Separate property would be property acquired prior to the date of marriage, property acquired by gift from someone other than your spouse and property acquired by inheritance. Property which was gifted between spouses during the marriage is marital property. Provide a detailed explanation as to the reason you contend the property to be separate. Complete one list of separate property for all property you contend to be your separate property and a separate list of property which you agree is the separate property of your spouse.
How much detail is enough?
The level of detail to which your property is listed is in your discretion to a certain extent. Technically, all property, regardless of its value, should be listed if it is to be distributed. However, if you list numerous small items (such as carrot peeler, can opener, ash trays, nick knacks, shower caddies and the like), the added expense of your equitable distribution trial will likely offset the value of these items.
If you are the Defendant responding to an affidavit prepared by your spouse, you will respond to the specific items listed by your spouse and provide your opinion, if different. Bear in mind that any item for which you disagree with your spouse’s opinion of value will require the presentation of evidence so the court can make a ruling. The attorney’s fees to make the presentation could exceed the value of the item. Thus, consider your spouses’ opinion of value carefully.
If you are the Plaintiff preparing the initial equitable distribution affidavit, you may want to consider handling household goods in one of the following ways:
- List items by category and provide a lump sum value such as “kitchen utensils” “nick knacks” “decorative items in dining room” etc.
- Specify that all of certain categories of items will be specifically divided in kind between you and your spouse and therefore do not need to be separately listed or valued. This will only work if you and your spouse can work together to divide these items. Examples may include linens, cookware, Christmas decorations, etc.
- Only list items with a value in excess of a certain figure, such as $50.00 or $100.00 or $500.00 and allow all items with a value less than that to be retained by the person who has possession at the present time.
If you and your spouse or the two attorneys are able to agree on the level of detail prior to the preparation of property division affidavits, this may save you considerable time and attorney’s fees. If you and your spouse are able to resolve the division of the smaller household items on your own, it will save both of you time and expenses.
How should I list intangible assets, bank accounts, etc?
For intangible items such as bank, investment or retirement accounts, it helps if you reference an account statement closest to the date of separation. Values for these types of assets will generally come from the paperwork.
Pensions and retirement accounts are often listed on a separate schedule in the Equitable Distribution Affidavit. Unless the retirement account has an easily determined value as of the date of separation, you may need to have an expert, such as an accountant, appraise the account or pension.
When listing marital debts, you should include the name and address of the creditor, the name on the account, the balance of the debt as of the date of separation and as of the date you are completing the affidavit. Sometimes it is also helpful to indicate the purpose for the debt. If the debt is secured by property, indicate what property secures the debt.
Your lawyer will want to know who has been paying the debt since the date of separation. If you are the party who has been paying the debt, keep track of the amount you have paid through the date of the affidavit.