Separate property is considered property (either an asset or debt) that belongs to one spouse individually. Separate property is not subject to equitable distribution and its value is not included in the marital estate. Separate property includes: property that was owned by a spouse prior to marriage; property acquired in exchange for separate property; and property that was received by gift or inheritance. It is well established that gifts to a spouse from a third-party are considered the separate property of the recipient spouse. However, gifts between spouses that are given after marriage and before separation are considered marital property that must be accounted for, valued, and distributed as part of the equitable distribution of the marital estate unless there is expressed in the conveyance an intention that the gift is to be the separate property of the recipient spouse.
When one spouse gives a gift to the other, there is usually no mention of whether or not the spouse intends the gift to be the sole and separate property of the recipient spouse. Real estate is one exception. When an inter-spousal deed transfers property into the name of one spouse individually, it may contain language that the property is intended to be the sole and separate property of the recipient spouse. Even in situations where a deed or other evidence exists, there still may be legitimate disputes as to whether the property is the separate property of one spouse, especially if marital funds were used to acquire the property or it was titled in the name of one spouse individually for estate planning or some other purpose.
The spouse who claims that property acquired during the marriage is separate property has the burden of proving beyond a preponderance of the evidence that: (1) the property was acquired by gift or inheritance from a third-party during the marriage; (2) it was acquired by gift from the other spouse during the marriage and there was an intention stated in the conveyance that it would be the recipient spouse’s separate property; or (3) it was property acquired during the marriage that was exchanged for separate property and there was no contrary intention that it be marital property.
Equitable distribution matters often can be complex and such matters are best handled by a reputable family law attorney. Regardless of whether you need assistance in tracing a separate asset to its origin, or putting forth the best evidence in support of a claim of separate property, you can count on the family law attorneys at Gum Hillier and McCroskey, P. A. to provide you with top-notch legal representation. Our attorneys are well-versed in North Carolina’s equitable distribution laws and we are available to our experience and resources to work for you.
This article is for information purposes only and is not to be considered or substituted as legal advice. The information in this article is based on North Carolina state laws in effect at the time of posting.