It must be nice to be like the Real Housewives of Beverly Hills. Money, glamor, fame, a happy marriage…or not? If you’re a fan, you know some of the drama in Erika Girardi’s recent separation from high-profile attorney Tom Girardi.
Things may not be as glitzy as they appear on the Bravo Network. The Girardi’s have found themselves entangled in a sticky financial and legal situation upon announcing their separation. Sometimes high-profile divorces can be just as messy as they seemed glamorous, especially regarding who gets to keep the million-dollar assets. Or, in the Girardi’s’ case, it may be more like who gets saddled with million-dollar debts and lawsuits.
What is Equitable Distribution?
Let’s bring it down to a more practical level. In North Carolina, Equitable Distribution is the division of your and your spouse’s property and debts during divorce. Although there are some nuances and exceptions, there is a presumption in North Carolina that each spouse is entitled to 50% of the estate. This means, barring any prenuptial agreements, both spouses have a right to all marital assets (AND debts) in Equitable Distribution.
What property and debts are considered “marital”? Although there are some exceptions, marital property is property incurred during the marriage, even if just one spouse’s name is on it. This includes assets like the house, your car, your spouse’s 401(k), and your checking account. That 401(k) is probably going to be a marital asset even if it’s in your spouse’s name only and he contributed to it from his paycheck each month. Exceptions to marital property include inheritance – if you received inheritance during your marriage, that property will most likely not be considered marital.
Marital debts are a bit different – debt incurred during the marriage is only marital if it was incurred for the benefit of the marriage. So, that mortgage you and your spouse jointly incurred to buy your house is probably a marital debt. The credit card in your spouse’s name that he used to go on a shopping spree? That could be considered his separate debt. This is where an experienced attorney who can identify potential separate debt and argue favorably for you comes in handy.
To make things even juicier in the Girardi case, Tom is accused of “faking” the divorce so he can pass assets to Erika as part of Equitable Distribution instead of paying out millions of dollars in a lawsuit where he’s said to have embezzled funds from clients.
Let’s say you haven’t embezzled millions of dollars. How can you best prepare for and protect yourself during Equitable Distribution?
The best first step to take is to collect records and documentation of all property and debt both you and your spouse have. This includes any real estate, banking accounts, retirement accounts, investment accounts, credit cards, loans, etc. It is also helpful to know, if possible, when the property was acquired or debt incurred.
Be sure you have a complete understanding of your estate before it is divided. Let your attorney know if you aren’t sure about your property and debts or are unable to find documentation (maybe because your spouse refuses to allow you access). Your attorney can take steps to obtain everything needed to make a completely informed decision as to how to divide your estate.
Who keeps the house?
Many factors go into deciding what property is best for you to keep. In addition to determining what percentage of the estate you should receive, you should also consider what assets are best for your future financial security.
For example, if you want to keep the house to ensure your children have less change as your family transitions through the divorce process, you should consider whether you can afford the monthly payments after your spouse moves out. Or is it better for your future financial security to sell the house or keep an investment or retirement account of similar value? Deciding who keeps the house, or any other asset, is a question on which you should seek the advice of your attorney and possibly a financial advisor.
Most importantly – will Erika Girardi still be on Real Housewives of Beverly Hills?
We suppose that’s a question for Bravo…Stay tuned!
As you can see, whether you are famous and accused of embezzling millions of dollars, or a stay-at-home mom unsure of what your husband has in his name, Equitable Distribution is a very complex matter. An experienced family law attorney can help you navigate all the ins and outs of Equitable Distribution and develop a solution that is best for you. Contact Marcellino & Tyson, PLLC at (704) 919-1519 for a consultation to discuss your options.