If you’re planning to get a divorce in North Carolina, then you probably have a lot of questions about the process and about what you can expect from the court. Even if you’ve already separated from your spouse and have made key decisions about factors like custody, you probably don’t have everything figured out just yet. That’s okay!
Breaking away from your spouse isn’t easy. Even if you’re emotionally ready to move on, you still have to figure out all of the logistics of divorce and asset division. Plus, you may be dealing with a bitter or irrational ex bent on revenge. All of that can be complex and take a while to sort out.
Every divorce situation is different, but there are some concerns that many people share when they’re going through a divorce. For example, retirement funds can be a huge source of worry or anxiety. If you’ve spent years building up a 401(k), then it can be scary to think about losing part or all of it to your spouse, especially if your earning potential is limited.
Don’t panic. When it comes to asset distribution, there are many different factors that might apply. An experienced divorce lawyer can help you understand your situation and help you protect your assets. Here’s what you need to know about 401(k) accounts and divorce in North Carolina.
North Carolina, along with many other states, doesn’t just automatically divide the couple’s assets in half during divorce proceedings. The courts have discretion in determining what is fair under the state’s equitable distribution system. If the court gets involved in settling the terms of a divorce, each party must make their own arguments to the judge about what they consider to be fair.
The good news is that any assets you controlled before your marriage are yours to keep. They are not considered “marital property.” They are your sole property and will not be considered in your divorce case. With 401(k) accounts, however, things can get tricky, as portions of the account may be considered marital property in North Carolina, depending on the situation.
Remember, any assets you gained before your marriage should be yours to keep. Once married, however, you and your spouse’s marital assets could include property and stocks you purchase together, as well as any money that has accumulated in your retirement accounts.
If your 401(k) has grown in any way since your marriage (additional contributions and increased value), that value will be considered during the divorce proceedings. Protecting your entire portfolio might not be possible, but you will continue to control the assets you had before you got married.
Different retirement accounts are set up in different ways. Your options will vary depending not only on the account setup but on your age and employment status. These factors will also impact the taxation of the money in your retirement accounts should you be forced to withdraw some of the funds.
The first step is to think about who controls each account. If you and your ex both have your own 401(k) accounts, is one of them much larger than the other? If the marital share of the account balances is similar, some couples just choose to keep their own accounts for convenience. If there is a big difference between the two, you may need to agree on an amount to be paid out to the spouse with the smaller account.
All of this will depend on who controls each account and how much those accounts have grown since your marriage. You will need to reach out to your account administrator to get information on distribution options, and you should speak to an accountant or financial advisor about the implications of these different options. Liquidating the accounts is usually a last resort due to the tax implications.
In most divorces, there’s no need to take the proceedings into the courtroom. Most people want to settle things as quickly and quietly as possible. This reduces legal costs and stress on everyone involved. Unfortunately, divorce is extremely emotional and things can get ugly, so some divorces do end up getting settled in the courtroom.
When divorces go to court, it’s usually a drawn-out, painful process with the possibility of an unpredictable outcome. By taking your divorce to court, you’re giving the judge the responsibility of dividing your assets and finalizing the terms of the divorce. While they might rule in your favor, they might also take your ex’s side. It’s just risky to let things play out in court, especially if both custody and asset disputes are involved.
As an alternative, mediation is a better choice. If you and your ex can work together to decide what’s fair, it’s better for everyone involved. With that said, if you’re worried about protecting your 401(k), chances are good that you and your ex aren’t on good terms. You can’t control someone else’s behavior, but you can control your own reactions and do what you can to create an amicable relationship.
Think about your priorities. Is it worth dealing with all the heartache of court just to punish your ex? Will you end up spending more money than you could potentially make during asset distribution? What happens if the judge doesn’t rule in your favor? All of these questions should be considered when deciding how to move forward with your divorce. Your lawyer will also help you decide on an appropriate course of action.
In North Carolina, there’s no way to get through a divorce quickly. You have to live separately from your spouse for at least one full year before an absolute divorce will be granted. If you’re ready to move on, that can seem like a long time. But it also gives you time to plan your strategy and negotiate with your spouse before the divorce is finalized.
Once you know for sure that you’re going to be getting divorced, you should contact an experienced attorney and start getting your documents together. Your 401(k) account might have certain restrictions, and it’s important to understand how everything is set up before you start to worry about how to keep your contributions.
You have time to figure things out and to forge a cooperative relationship with your ex. Giving them a little time to cool off if things have gotten heated can help. Remember, it’s always better to work together if you can.
Sometimes, there’s just no way to settle a divorce through mediation. In these cases, you will need the help of an attorney more than ever. They will represent you and build a case with you to present to the court.
Even if your divorce case does make it to court, it’s important to take the high road. Keeping your emotions in check will help you make a good impression on the judge. You and your lawyer need to have a clear strategy and go over each asset type thoroughly, including your 401(k) before your day in court. Be prepared!
Couples who are unable to agree on the terms of their divorce are usually very hostile to each other for a number of different reasons. Infidelity, wanton spending, and other misconduct are often the catalyst for divorce in the first place. But can this type of conduct affect how retirement accounts and other assets are distributed?
Generally, marital misconduct doesn’t affect asset distribution, although infidelity can affect alimony payments. There are exceptions, however. The court has a lot of leeway in deciding what’s fair and may take into account everything from the length of the marriage to a spouse’s behavior within a marriage. A spouse who built up excessive debt or significantly affected the couple’s assets might be awarded less by the courts in the interest of fairness.
Be sure to be open and honest with your attorney about all the factors that could impact asset distribution in your divorce, even if they seem unimportant. An experienced divorce lawyer will take all of the information you provide and decide what is important.
If you’re worried about retaining your 401(k) account and other assets in the divorce process, the best way to set yourself up for success is to contact an experienced North Carolina divorce lawyer right away. The sooner you get in contact with expert counsel, the better. Your lawyer will be able to help you create a plan for your case and get all the necessary documentation together.
For your own peace of mind, it’s important to work with someone who has handled lots of different divorce cases and has seen it all. Whether you end up settling your divorce through mediation or you end up standing before a judge in the courtroom, you will need the help of a lawyer. Our experienced family and divorce attorneys in Raleigh are standing by to help you protect your assets. Call 919-367-1512 today to speak with an expert.