Assigning one judge to the matter is the cornerstone of any family court system. Having one judge assigned to all of a family’s matter allows that judge to familiarize themselves with the specific needs of that family and better address the issues specific to that family. There can be many issues facing a family going through dissolution of the marriage – child support, divorce from bed and board, child custody, alimony, equitable distribution, and absolute divorce are several such claims that may be prompted by a separation of the parties. Pursuant to these claims, there are numerous motions and/or interim solutions which could become relevant based upon the circumstance. For instance, ex-parte child custody, temporary child custody and child support, interim distribution, temporary restraining orders, post-separation support, motions and orders to show cause in contempt, and/or motions to compel may become necessary. Many of the facts in each motion or claim may overlap, such as: Post-separation support and alimony, or temporary child custody and child custody. In order to prevent disparate outcomes, long recounts of a family’s history, and uneven applications of the law between claims and so as to provide the opportunity for tailored rulings specific to the details of a particular family, the family court system requires that one judge hear all the issues of one family whenever possible. Having one judge assigned to all of a family’s matter allows that judge to familiarize themselves with the specific needs of that family and better address the issues specific to that family.

In addition, when one judge is assigned to a matter, that matter stays on the judge’s calendar until resolved. Parties are unable to continue a matter so as to get a “favorable” judge or to delay a matter simply to cause the other party hardship. Furthermore, one of the penultimate goals of family courts are to resolve the issues of a family within one year. This one-year goal coupled with the restrictions on continuances cuts down the amount of continuances which will be allowed or tolerated by the Court. According to the 2011 Annual Report on NC’s Unified Family Court Programs which looked at the duration and length of cases over a seven year period, in counties with a family court system, only 22 percent of domestic cases were not resolved within a year as compared to 47 percent in non-family court counties. The seven year average age for cases in family court is 108 days whereas, in non-family court jurisdictions, the average age over the last seven years was 332 days.

Many family courts employ a simple and predictable calendaring system. For instance in New Hanover County, North Carolina, judges typically have a two-week session in each month dedicated to family issues. Each judge’s session is published in advance and the cases on the calendar are organized at an advanced (generally) calendar call. If a matter is not able to be heard during that session, the family court administrators move it to the next session and it remains on the calendar from session to session until it is heard by the Court. For smaller or quicker matters, some judge’s will schedule shorter sessions when time allows.

Since 1999, Family Courts in North Carolina have been providing parents with tailored and efficient resolution of their family law issues. Despite the numerous advantages of a family court system, as of late the family court has been under attack in the North Carolina legislature. Recent moves by the legislature to cut funding to the family court system in North Carolina only means an increase in inefficiency, time, and hardship for the family’s of North Carolina. Rice Law, PLLC, encourages all parents and spouses in North Carolina to write your state representative and let them know that funding for family courts in North Carolina (as well as other specialized courts in North Carolina) should not be cut when there are proven advantages to them being retained.

There appears to be a trend to treat household pets more like children than property where courts determine the better custodian for the pet and grants visitation rights to the other “parent.”  North Carolina is not embracing this trend.  Pets are considered property in North Carolina.  In divorce proceedings, the pets are valued and divvied up like household goods without considering the pet’s best interests or who would be the better custodian.² One exception to this, however, is when there is domestic violence.  Our legislature enacted a law that allows the family pet to be awarded to the victim of domestic violence as part of a domestic violence restraining order.³

In putting a value on the family dog, our courts consider replacement costs only and not the intrinsic value of the animal.⁴    Therefore, if the parties can’t agree on who gets the dog and an equal distribution of property is made by the Court, the party who did not get the dog will not get extra property as a result.

A few years ago, a New Hanover County attorney brought a custody action regarding a dog under the statutes addressing child custody.  The trial court was not amused, considered it an improper action, and the action was promptly dismissed.

Even though our courts are slow to recognize the needs of the pet, individuals often settle the issue with a pet custody agreement which defines the sharing arrangement, visitation and may even provide financial payments for the benefit of the dog or cat.  Such agreements are contracts between individuals and can be made whether or not the parties were married.

Endnotes:

up¹http://www.spokesman.com/stories/2012/mar/03/divorce-lawyers-see-increase-in-pet-custody-cases/

up²See Jones v. Craddock, 210 N.C. 429,  431,  187 S.E. 558, 559 (1936); Davis v. Sineath, 129 N.C. App. 353, 354, 498 S.E.2d 629, 630 (1998) (dog valued at $550.00 distributed as marital property); Lawing v. Lawing, 81 N.C. App. 159, 164, 344 S.E.2d 100, 105 (1986) (five cats divided as marital property worth $25.00).  However, in contrast our Legislature has enacted laws to prohibit cruelty to animals (e.g., N.C. GEN. STAT. § 19A-1 et. seq.) and to encourage suitable care for an animal but such considerations are improper in divorce proceedings.
up³See N.C. GEN. STAT. § 50B-3(a)(8)
up⁴Shera v. N.C. State Univ. Veterinary Teaching Hosp., ___ N.C.App. ___, ___ S.E.2d. ___, 2012 WL 539989 (2012).

The Federal Government has established specific rules concerning social security benefits. If you were married for at least 10 years, you may be able to draw social security based on your ex-spouse’s earnings record (if their record would provide you a higher payment than your own record).  If your divorced spouse remarries, he or she generally cannot collect benefits on your record unless their later marriage ends (whether by death, divorce or annulment).  See the Social Security Administration website for more details.

Social Security disability benefits intended to replace the loss of earning capacity are considered the separate property of the disabled person in North Carolina and are not subject to division. See Cooper v. Cooper, 143 N.C. App. 322, 326, 545 S.E.2d 775, 778 (2001).

Sarah Files for Divorce and John Keeps the Majority of the Money

John worked for a company for many years and had built up a 401(k) worth three hundred thousand dollars. His wife, Sarah, filed an action against him for an absolute divorce using some forms she found online. When John came to me for legal advice, we made a list of the property that he and his wife acquired during the marriage.

• Former Marital Home [Joint] $ 245,000
• Mortgage [Joint] ($ 175,000)
• 401(k) [John] $ 300,000
• His Car [John] $ 14,000
• Debt on His Car [John] $ 0
• Her Car [Sarah] $ 18,000
• Debt on Her Car [Sarah] ($ 8,000)
• Checking Account [Joint] $ 2,300
• Net Marital Estate $ 396,300

If either filed for equitable distribution and the Court agreed that the above listing accurately represented the property acquired during the marriage, it would be presumed equitable for each side to get property worth ½ the overall value or $198,150 each. However, if a divorce occurs without each side properly preserving their claim for equitable distribution then property vests based upon title. Therefore, under the facts above, John would keep his 401(k) and car worth $314,000 and Sarah would keep her car and the debt on her car worth $10,000. The joint property would be held as tenants in common with each having an undivided interest in the whole. John could sue Sarah after the divorce to divide the house with $70,000 in equity and potentially have a total of $349,000 (1/2 the equity in the house plus the 401(k) and car) while Sarah would only get $45,000 total. In theory, the checking account could also be divided through a petition to partition personalty but it probably would not be worth the cost. So it is to John’s advantage to get divorced without suing for equitable distribution. Actually, he comes out better by over one hundred and fifty thousand dollars!

Very little of it was jointly titled and most of it was in John’s name. The 401(k) like most retirement plans was solely in his name. My advice for his particular case was “let her get the divorce and then we will file a petition to partition the real property.”

The entry of a divorce judgment forever cuts off claims for the division of marital property (equitable distribution) and spousal support (post separation support and alimony). The failure to specifically apply for these rights prior to the entry of a divorce judgment acts as a waiver of these rights and they are lost forever. North Carolina law, N.C. GEN. STAT. § 50-11(e), states that “an absolute divorce obtained within this State shall destroy the right of a spouse to equitable distribution.” To preserve claims for equitable distribution and alimony, a valid claim must be asserted before entry of the divorce.

So be careful when filing for divorce in North Carolina. It is worth it to consult with an attorney and determine the best option for your particular situation. A simple divorce could cost you hundreds of thousands of dollars! It also cuts off alimony rights and if John would owe Sarah alimony in the above hypothetical, she would be in even worse shape!  In this case, Sarah made a huge mistake.

The cause of action of breach of promise to marry is related to the “heart balm tort” of alienation of affections.  The former is the result of a breach before marriage and the other may be brought if a third party has an affair with a plaintiff’s spouse during the marriage.  Either one of these claims may be brought by a man or woman.  The unpredictable amount of a damage award may cause a defendant to settle because a plaintiff may receive punitive damages if they prevail on either of these claims.   

Breach of promise to marry has survived since the late 1800′s and is still brought by plaintiffs in North Carolina.  One need only look to the recent case of Dellinger v. Barnes (No. 08 CVS 1006), 17 December 2010.   A jury in McDowell County, North Carolina awarded the plaintiff with damages of $130,000.  The plaintiff was a young woman that was dedicated to helping her fiance to start several businesses, however, he paid her a small amount of salary.  The defendant broke his promise by starting a relationship with one of his other employees after which he broke off the engagement to the plaintiff.  The plaintiff’s counsel showed the jury that the Defendant not only broke his promise to marry, he also took advantage of her reliance in that she worked hard alongside the defendant because she believed she would share in the success of the businesses.  For more information on this case see below. 

Due to the above results, one may ask whether they should enter into a prenuptial contract (aka a “prenup”).  A prenup may be helpful in the long run for certain people.  In the past, the very act of being asked to sign a prenup may have been seen as insulting and a signal that the marriage is starting on rocky ground. Now, more individuals consider a prenup as an essential planning document that simply makes good sense.  While discussing the contents of the prenup, many couples resolve difficult financial questions at a time when they are most in love.  For more information on things to be included in a prenup see www.ricefamilylaw.com.

This author sees a place for the cause of action of breach of promise to marry because the facts may be different from the 1800′s but the basic theme still occurs today.   However, discussing finances and a prenup may prevent costly litigation like in Dellinger v. Barnes or after a marriage.  Couples should have a serious conversation about finances before deciding to get married, and couples should seek the advice of a licensed attorney to draft an enforceable prenup.

For more information about Dellinger v. Barnes, read the article  in N.C. Lawyers Weekly entitled “Man must pay jilted fiancee $130k for reneging on engagement”, by Sylvia Adcock, published on January 6, 2011.

If you discover that you missed the initial filing deadline, North Carolina has a “Savings Statute” that allows the defendant to claim equitable distribution subsequent to the divorce under certain circumstances. North Carolina’s statute allows a late claim for equitable distribution if the defendant was served by publication. A late claim is also allowed when the divorce was granted in another jurisdiction.

The Uniformed Services Former Spouses’ Protection Act (USFSPA) was passed in 1982 to make military pensions subject to division by state courts in divorce and property division proceedings.  All of the states now allow the division of military pensions as marital or community property.  North Carolina enacted N.C. Gen. Stat. 50-20(b)(1) (2001) so that marital property includes vested and nonvested military pensions under the USFSPA.  Furthermore, certain amendments made by Congress to parts of the U.S. Code dealing with Reserve retirement and benefits imply that Congress intended the Act to cover Guard and Reserve retirement also.

The North Carolina Court of Appeals case of Draper v. Draper, 159 N.C. App. 465, 583 S.E. 2d 426 (N.C. App. 2003) involved the division of military retirement benefits in equitable distribution. The plaintiff, Ms. Draper, requested an interim distribution of the defendant, Mr. Draper’s, retirement benefits. The defendant was married to the plaintiff during his entire service as a member of the United States Air Force.  At the trial court level, the plaintiff was unsuccessful in getting any of the Defendant’s retirement benefits because she did not offer evidence of the date of separation value or the present value of the defendant’s benefits.  On appeal, the Court of Appeals reversed the trial court on the issue of equitable distribution. The Court remanded the case to the trial court to value under the deferred distribution method and equitably distribute the defendant’s military retirement benefits, except for defendant’s disability benefits. The Court explained that the North Carolina trial courts are not limited to the present value method, as long as the court values the retirement benefits as of the date of separation.

North Carolina calculation

Equitable distribution and pension issues are addressed in N.C. Gen. Stat. 50-20.1 in which it provides a formula to value the marital portion of the benefits:

Years of Marriage that Coincide with Employment

Year of Employment

An example of division in a hypothetical case may help to illustrate how it works.  Assume that the couple has been married for 5 years and that, for all 5 years, she was employed by the company, government or organization providing the pension.

Also assume that her pay with 20 years of employment is $4,800 per month, and that she can retire after 20 years of service with 50% of her base pay.  Thus, the monthly retired pay of the employee spouse is $2,400.

$2,400 × 5 years marital pension service = $600 (marital part of pension)

20 years total pension service

Military Calculation

Deferred Division: The marital fraction is calculated as follows:

Years of marital pension service =  M

Years of total pension service            T

The numerator (M) represents the years of marital pension service, and the denominator (T) represents the total number of years of creditable service that the service member will perform.

An example of deferred division in a hypothetical case may help to illustrate how it works.  Assume that a service member has been married for 5 years and that, for all 5 years, he was on active duty in the United States Marine Corps.

Also assume that his active duty pay with 20 years of service is $4,800 per month, and that he can retire after 20 years of service with 50% of his base pay.  Thus, the monthly retired pay of the service member is $2,400.

$2,400 × 5 years marital pension service =  $600 (marital part of pension)

20 years total pension service

Present Value Offset: In addition to the future division of retired pay, all states recognize a second method of pension division called a “present value offset.” This represents the present value of a series of money payments over the course of the service member’s life. The money payments are their retired pay, present value is the amount used so that the service member keeps the entire pension. The parties are left with a complete division of this asset.

How is present value calculated? There are several options available. Sometimes an expert is needed for trial. If settlement is possible, a mail order pension evaluation can be done by a party or parties, approximately $300–$500.

There is also a second method of determining present value, and this one makes no assumptions regarding interest rates, life expectancies or inflation.  It involves pricing an annuity that will yield a monthly payment equal to the pension. You and your attorney can seek out a professional to create a proposed annuity that might provide a better outcome.

North Carolina allows for several options to handle a military pension. Make sure you and your attorney consider all of the options.

First, the parties identify the property. For instance, most people have different types of property, and an attorney will likely need details about the property like the year and/or product number. Property includes collections, stocks, and vehicles to name a few. In all cases, attorneys use discovery as an important tool to identify all of the property. (“By finding hidden assets, preventing surprise, narrowing the issues before trial, or promoting fair settlement; discovery reduces the costs to the client in the long run and/or increases that which the client is entitled.”)

Second, a court classifies the property into separate, marital or divisible. The classification of the property depends on whether the property is acquired before, during or after the marriage. The source of funds rule controls this process in North Carolina. In addition, under the source of funds rule property may have both separate and marital interests, like if money from an inheritance is combined with funds from a joint account to purchase a boat. However, some courts have ruled the money from inheritance used on a boat becomes marital because it is a gift to the marriage. For couples that acquired property for many years, the classification process is more difficult.

A helpful analogy for equitable distribution is the image of a football field with one goalpost at each end. All property acquired before or after the marriage will fall off the field outside of the goalposts and is your separate property. All property acquired during the marriage falls on the field within the goalposts and is marital property. If separate property, acquired before the marriage, is used to pay for a marital residence it is pulled onto the field and thus becomes marital property. Divisible property covers the change in value of marital property after separation but before distribution, and this increase or decrease falls outside of the goalposts. This analogy explains the basic rules of equitable distribution, but exceptions do exist.

Third, a court values the property. This step merely requires determination of the fair market value. One problematic type of property is a collection. Be content to keep the collection if you have a collection of beanie babies or baseball cards. These collections are worth a fraction of their value 10-20 years ago. The value assigned to a collection must be equal to what similar collections sell for today.

Fourth, a court distributes the assets, and debts if any. North Carolina presumes an equitable distribution, 50/50 split, of the marital property and debt. Obviously, it makes sense to give a collection to the person that is more emotionally attached to the collection. Furthermore, the family heirlooms typically stay with the person that brought the heirloom to the marriage.

Now that you have a general understanding of how equitable distribution works, start listing the specific property items that you most desire and provide this list to your attorney. Equitable distribution becomes more expensive in cases that require discovery to identify suspected hidden assets, experts to value business interests, and an attorney to initiate litigation for purposes of a Qualified Domestic Relations Order (QDRO). Trust your attorney to create a good game plan to accomplish the desired outcome.

For more information on equitable distribution and other family law topics, get the free eBook on Separation & Divorce.

The above is presented as general information on equitable distribution. It is not exhaustive coverage of these issues but only a general explanation from an attorney’s perspective. Seek help from a licensed attorney for more information.