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.

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 by your attorney for tax consequences.

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.