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When Divorce And Probate Collide

What happens when a couple divorces, but one party dies before completing payments on an equitable distribution award? That was the question answered last week by the North Carolina Court of Appeals.

In Smith v. Rodgers, No. COA 18-261 (N.C. Ct. App. Feb. 5, 2019), the Court of Appeals held that enforcement of an equitable distribution award remains within the exclusive jurisdiction of the District Court, even after a party dies.

The issue on appeal began with an equitable distribution award made in December 2012. The husband, however, died in March of the next year. Within 90 days of the estate’s notice to creditors, the former wife made a claim upon the decedent’s estate in probate for part of what she was owed under the order. The estate paid that claim. The wife did not file for the rest of what she was owed under the equitable distribution order.

The decedent’s estate later sought to avoid payment of the remaining balance on the equitable distribution award on the grounds that it was not timely asserted. Building on prior decisions of the Court of Appeals, the Court in Smith rejected the estate’s position. Instead, the Court held that “absent the death of a spouse prior to adjudication of an equitable distribution proceeding,” a surviving spouse is not required to adhere to probate “filing and notice requirements to enforce an equitable distribution order."

The Court’s opinion explained that “property rights arising from an equitable distribution order vest at the time of separation and are not subject to statutes governing estate administration.” Consistent with this holding, the Court of Appeals further held that the exclusive jurisdiction for enforcing an equitable distribution award rests with the District Court, thereby precluding an action to enforce the award in Superior Court.

Overall, the case highlights the procedural complexities that can arise in administering an estate during the probate process, especially when other statutory schemes (like those governing equitable distribution) are implicated.

Read the Court's full opinion here.

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