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NC, Equitable Distribution laws. Equitable distribution and…

greetings-NC, Equitable Distribution laws.Equitable distribution...
greetings-NC, Equitable Distribution laws.Equitable distribution and distributive award.E.D. Judgment: marital home is over-valued.
. Broker used the courts over-valued sales price.
. 6 months later broker won't re-list the home w/o $75K reduction in sales price.. The Distributive Award was based on the grossly over-valued sales price, thus the D.A. is also grossly over-valued.I'm seeking specific NCGS rules that address this matter.
. No money has yet been distributed.
. A rule 60 motion was filed and is currently pending.
. What options do I have re: the amount of the D.A.?
. Same Q on the value of the home.
. What rules provide protection.
. etc..thank you
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Answered in 1 hour by:
1/2/2018
RayAnswers
RayAnswers, Lawyer
Category: Family Law
Satisfied Customers: 46,989
Experience: 30 years as a family law lawyer .
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Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question and respond.

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Case law I also sent you more information on your other question about the process.

Valuation Overview

A.

The Relationship of Valuation to the Distribution Decision.

G.S. 50-20 (a) and (c) provide that “[upon

application of a party, the court shall

determine what is the marital property and

divisible property and shall provide for

an equitable distribution of the marital property and divisible property between the parties . .

. . There shall be an equal division by using

net value of marital property and net value

of divisible property unless the court determines that an equal division is not equitable.”(emphasis added).

“Net value” is not defined in the statute, but our courts have defined it

as “market value, if any, less the amount of any encumbrance serving to offset or reduce market value.”

Alexander v. Alexander,68 N.C. App. 548, 551 (1984).

Carlson v.Carlson,131 N.C. App. 609 (1997)

. “Encumbrance” is usually defined as a “claim, lien,

charge, or liability attached to and binding real property . . . [or] . . . a burden or charge on personal property.” Black’s Law Dictionary 908 (4th ed. 1968) (defining “incumbrance”).

B.

Fair Market Value Defined.

“Fair market value” has often been defined as “[the amount at which property

would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.”

Black’s Law Dictionary 537 (5th ed. 1979). “Value is

a word of many meanings.”

Southwestern Bell Telephone v. Public Service Comm’n,

262 U.S. 276, 310 (1923).

Fair market value is not equivalent to purchase price, replacement value, book value, going concern value, or the amount received in a recent sale of similar property. All of these concepts, however, may be valuable aids in determining market value.

In some cases, the parties will be unable to agree on the disposition of intimate

personal items having only sentimental value, such as family picture albums.

The North Carolina Act “does not require the distribution of articles that have no net value,”

McManus v. McManus,76 N.C. App

. 588, 592

(1985), but it would seem that the court should make some disposition of all items in order to make as full and final a judgment as possible.

C.

Necessity of Valuation.

Regardless of the difficulties involved, the

valuation process is essential.

Faced with a lack of evidence, or the complexity of the task,

it is tempting to avoid the difficulty

by ordering property sold and the net proceeds equally divided between the parties. The appellate courts have understandably held that the trial court must carry out its valuation duties. Otherwise, the trial court is not able to determine

net values of the marital estate on the dates

of separation and distribution, and thus make an informed distribution

decision. Together with such factors as the length of the marriage, the size of the marital 3 estate may well guide the trial court’s exercise of discretion in determining an equitable distribution.

Thus, the court may not merely order property sold by commissioners and divided

equally, without first determining the date-of-separation value.

Thomas v. Thomas,

102

N.C. App. 127

(1991). Nor may the court merely determine the portions of a pension to

which the parties are entitled, without first finding the present value on the date of

separation.

Cunningham v. Cunningham,

171 N.C. App. 550 (2005). The object is to

determine the net value of the marital estate, as that may well help determine the ultimate distribution decision.

D.

Date of Valuation.

G. S. 50

-

21(b)

provides

that “[f]or purposes of equitable distribution, marital

property shall be valued as of the date

of separation of the parties.. . .

Likewise, marital debt is valued as of the date of separation.

Mrozek v. Mrozek,

129 N.C. App. 43 (1998).

Divisible property and divisible debt shall be valued as of the date of distribution.” It

is not always be error to use a later valuation date. In

Shoffner v. Shoffn

er,

91 N.C. App.

399, 371 S.E.2d 749 (1988), the trial court valued the parties’ pensions on December 31,

1984, although they had separated seven days earlier. The Court of Appeals held that use

of the later date was not error, as the appellant had not demonstrated that either of the parties had made any additional contributions, or that any additional interest had accrued to the retirement plans

during the interval between separation and valuation.

Experts may testify as to the value of real and personal property on the date of

separation, although their examination of the property took place some eighteen months

later, where there was (1) no evidence that the expert considered post

-

separation

occurrences, (2) the expert demonstrated familiarity with the market values of such

property at the date of separation, and (3) there was no evidence that the condition of the

property had changed between the date of separation and the date of the appraisal.

Atkins

v. Atkins,

10

2 N.C. App. 199

(1991). The court could, of course, consider the passage of

time in evaluating the opinion testimony.

E. Determination of “Net” Value.

The general rule is straightforward, providing for determination of fair market

value, then subtraction of liens and encumbrances. Such deductions may not be unduly

speculative. Many of the questions that have arisen are in the area of tax consequences

upon the disposition of the asset. In 2005, the Act was amended to provide that in cases filed after 1 October 2005, the trial court should consider the tax consequences to the parties if the marital or divisible property had been sold or liquidated on the date of valuation, with discretion in the trial court to consider whether or when such consequences are likely to occur.

2005 N.C. Sess. Laws 353.4

Estimated expenses which would be associated with the sale of an asset may not

be deducted from fair market value when the sale is neither imminent or contemplated.

Crowder v. Crowder,

147 N.C. App. 677 (2001) (error to deduct sales commissions, wind

up fees, and income taxes, associated with future speculative sale of business.)

Thus, the court could not consider the tax consequences of the husband withdrawing from his

accounting partnership, in the absence of any evidence he was withdrawing.

Armstrong v. Armstrong, 322 N.C. 396 (1988.

https://www.sog.unc.edu/sites/www.sog.unc.edu/files/course_materials/Tab%203%20Valuation%20Methodologies.pdf

Hope some of these help you here.

Thanks again and thanks for rating 5 stars.

RayAnswers
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Satisfied Customers: 46,989
Experience: 30 years as a family law lawyer .
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I wanted to thank you again and thanks for rating 5 stars at top of page .Your business is much appreciated.

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