When couples divorce in North Carolina, one of the most important—and often disputed—issues is how to divide their property. North Carolina follows the principle of equitable distribution, meaning that marital property must be divided fairly, though not always equally.
To divide property fairly, the court or the parties must first determine what each asset is worth. That’s where fair market value (FMV) comes in. Understanding how fair market value is determined in North Carolina can make a major difference in the outcome of your divorce, especially when dealing with homes, vehicles, businesses, or retirement accounts.
At Martine Law, we help clients navigate property division with transparency and precision. Here’s how the process works—and what you can do to protect your financial interests.
What Is Fair Market Value (FMV)?
Fair market value is the price an asset would sell for in the open market between a willing buyer and a willing seller, with both parties having reasonable knowledge of the facts and neither being under pressure to buy or sell.
In divorce cases, fair market value provides a neutral benchmark for determining what each spouse’s share of the marital estate should be.
For example:
- A house’s fair market value might be based on an appraisal or comparable home sales.
- A car’s fair market value could be estimated using resources like Kelley Blue Book or dealer appraisals.
- A business’s fair market value might require expert evaluation of income, assets, and goodwill.
When Is Fair Market Value Determined?
Under N.C. Gen. Stat. § 50-21(b), the court must determine fair market value as of the date of separation. That means all assets and debts are valued as they existed when the couple began living apart with the intent to remain separated.
However, property values can fluctuate over time—especially real estate and investments. For that reason, the court may also consider current evidence to assess whether a significant change affects fairness.
How Fair Market Value Is Established in Practice
The process for determining fair market value depends on the type of asset and whether both spouses agree on its worth.
- Real Estate
- Typically requires a professional appraisal conducted by a licensed real estate appraiser.
- The appraiser evaluates market conditions, comparable home sales, improvements, and property condition.
- If spouses disagree, each can hire their own appraiser, and the court decides which valuation to adopt.
- Vehicles and Personal Property
- Values can be based on market guides, online valuation tools, or expert appraisals.
- Courts look for realistic prices that reflect normal selling conditions—not trade-in or wholesale values.
- Businesses or Professional Practices
- Business valuation is one of the most complex areas of equitable distribution.
- Courts may consider methods such as:
- Income approach: Based on expected earnings or cash flow.
- Asset approach: Based on tangible and intangible assets.
- Market approach: Based on sales of comparable businesses.
- Goodwill, reputation, and intellectual property may also factor into FMV.
- Financial Accounts and Investments
- Bank accounts, stocks, and retirement funds are usually valued using account statements on the date of separation.
- For pensions or 401(k)s, a Qualified Domestic Relations Order (QDRO) may be required to divide assets properly.
Marital vs. Separate Property
Before assigning value, it’s essential to know which property belongs in the marital estate.
- Marital property: Assets and debts acquired during the marriage and before separation.
- Separate property: Assets acquired before marriage or received by gift or inheritance.
Only marital property is subject to equitable distribution. However, disputes often arise over whether an asset was commingled—such as when a spouse uses marital funds to improve separate property.
Accurate valuation helps ensure that only the correct assets are divided and that each spouse receives their fair share.
Common Disputes Over Fair Market Value
Even with professional valuations, disagreements often occur. Common disputes include:
- Disagreement over appraisals: Each side presents different valuations for the same asset.
- Hidden or undervalued assets: One spouse may fail to disclose property or minimize its worth.
- Fluctuating market values: Rapid changes in the housing or stock market complicate fairness.
- Business valuation disputes: Questions about goodwill, future income, or owner compensation.
At Martine Law, we frequently work with appraisers, accountants, and valuation experts to uncover the most accurate picture of a client’s financial situation and protect their rightful share.
How the Court Uses Fair Market Value
Once all assets are valued, the court determines each spouse’s portion of the total marital estate. Under N.C. Gen. Stat. § 50-20, the court considers multiple factors to decide what’s equitable, including:
- The income and earning potential of each spouse
- The duration of the marriage
- Contributions to acquiring marital property
- Child custody responsibilities
- Any waste or concealment of marital assets
Fair market value ensures that the division is based on real, current worth rather than speculation or guesswork.
How to Protect Yourself During Valuation
If you are going through or anticipating divorce, here’s how to safeguard your interests during the valuation process:
- Gather financial records early. Collect bank statements, deeds, tax returns, and appraisals.
- Get independent valuations. Don’t rely solely on your spouse’s or their expert’s numbers.
- Document improvements or contributions. If you helped increase an asset’s value, proof matters.
- Consult your lawyer before signing agreements. Once you agree to a value in writing, it’s difficult to change later.
- Be transparent. Hiding or manipulating values can backfire in court and lead to sanctions.
How Martine Law Can Help
Valuing marital property isn’t just about numbers—it’s about fairness and future stability. Whether you’re concerned about your home’s appraisal, a business valuation, or investment division, Martine Law can help ensure that your interests are protected every step of the way.
Our family law team will:
- Work with qualified appraisers and financial experts
- Identify hidden or undervalued assets
- Challenge unfair or inaccurate valuations
- Advocate for an equitable outcome in court or mediation
Divorce can change your financial life, but it doesn’t have to destroy it.
Contact Martine Law today to speak with an experienced family law attorney who will fight for your fair share.