North Carolina 2025-2026 Regular Session

North Carolina House Bill H866 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	H 1
4		-	HOUSE BILL 866
	3	+	H D
	4	+	HOUSE BILL DRH30351-CI-2
	5	+
5	6
6	7
7	8		Short Title: Automatic Ord/Equitable Distribution Claim. (Public)
8		-	Sponsors: Representatives Stevens and Budd (Primary Sponsors).
9		-	For a complete list of sponsors, refer to the North Carolina General Assembly web site.
10		-	Referred to: Judiciary 2, if favorable, Rules, Calendar, and Operations of the House
11		-	April 10, 2025
12		-	H866 -v-1
	9	+	Sponsors: Representative Stevens.
	10	+	Referred to:
	11	+
	12	+	DRH30351 -CI-2
13	13		A BILL TO BE ENTITLED 1
14	14		AN ACT TO REQUIRE AUTOMATIC ENTRY OF A N ORDER PROHIBITING SPOUSES 2
15	15		FROM WASTING, CONVERTING, OR SECRETING ASSETS UPON FILING A CLAIM 3
16	16		FOR EQUITABLE DISTRIBUTION. 4
17	17		The General Assembly of North Carolina enacts: 5
18	18		SECTION 1.1. Article 1 of Chapter 50 of the General Statutes is amended by adding 6
19	19		a new section to read: 7
20	20		"§ 50-23. Automatic order for equitable distribution claims. 8
21	21		(a) As used in this Article, "automatic order" is the standing order entered by the court to 9
22	22		prevent the waste, dissipation, or secreting of assets or increasing debt or other liabilities and 10
23	23		which is entered at the time an equitable distribution claim is filed in an action. The court must 11
24	24		enter the form order created by the Administrative Office of the Courts for the automatic order. 12
25	25		(b) The automatic order must contain the following provisions: 13
26	26		(1) Neither party shall sell, transfer, encumber, conceal, assign, remove, 14
27	27		withdraw, or in any way dispose of, without the consent of the other party in 15
28	28		writing, or by order of the court, any property, including real estate, personal 16
29	29		property, cash, accounts, stocks, mutual funds, bank accounts, loyalty points 17
30	30		or miles, cars, and boats whether individually or jointly titled, except in the 18
31	31		usual course of business, for customary and usual household expenses, or for 19
32	32		reasonable attorneys' fees in connection with any claim filed under this 20
33	33		Chapter. 21
34	34		(2) Neither party shall sell, transfer, encumber, assign, remove, withdraw, or in 22
35	35		any way dispose of any tax-deferred funds, stocks, or other assets held in any 23
36	36		individual retirement accounts, 401K accounts, profit sharing plans, Keogh 24
37	37		accounts, or any other pension or retirement account, and the parties shall 25
38	38		further refrain from applying for or requesting the payment of retirement 26
39	39		benefits or annuity payments of any kind, without the consent of the other 27
40	40		party in writing, or upon further order of the court; except that any party who 28
41	41		is already in pay status may continue to receive such payments thereunder. 29
42	42		(3) Neither party shall sell, transfer, encumber, assign, remove, withdraw, or in 30
43	43		any way dispose of any property owned by or for the benefit of the children, 31
44	44		including any 529 plan accounts, real estate, personal property, cash, accounts, 32
45	45		stocks, mutual funds, bank accounts, loyalty points or miles, and cars whether 33
46		-	individually or jointly titled, except for customary and usual expenses 34 General Assembly Of North Carolina Session 2025
47		-	Page 2 House Bill 866-First Edition
48		-	historically paid for the benefit of the children from those assets without the 1
49		-	consent of the other party in writing or by order of the court. 2
50		-	(4) Neither party shall incur unreasonable debts hereafter, including further 3
51		-	borrowing against any credit line secured by the family residence, further 4
52		-	encumbering any assets, or unreasonably using credit cards or cash advances 5
53		-	against credit cards, except in the usual course of business or for customary 6
54		-	and usual household expenses, or for reasonable attorneys' fees in connection 7
55		-	with any claim filed under this Chapter. 8
56		-	(5) Neither party shall remove the other party as beneficiary, co-owner, cosigner, 9
57		-	or authorized user of any account in subdivisions (1) through (4) of this 10
58		-	subsection nor shall they add a nonparty to any account as a beneficiary, 11
59		-	co-owner, cosigner, or authorized user of any account in subdivisions (1) 12
60		-	through (4) of this subsection without the consent of the other party in writing, 13
61		-	or by order of the court. 14
62		-	(6) Neither party shall cause the other party or the children to be removed from 15
63		-	any existing medical, hospital, and dental insurance coverage, without the 16
64		-	consent of the other party in writing, or by order of the court. Each party shall 17
65		-	maintain the existing medical, hospital, and dental insurance coverage in full 18
66		-	force and effect until the parties agree in writing or the court orders otherwise. 19
67		-	(7) Neither party shall change the beneficiaries of any existing life insurance 20
68		-	policy without the consent of the other party in writing, or by order of the 21
69		-	court. Each party shall maintain the existing life insurance, automobile 22
70		-	insurance, homeowner's insurance, and renter's insurance in full force and 23
71		-	effect until the parties agree in writing or the court orders otherwise. 24
72		-	(8) This order is entered without prejudice to either party. 25
73		-	(c) The plaintiff shall serve the automatic order with the summons and complaint when 26
74		-	there is a newly filed equitable distribution claim as required by Rule 4 of the North Carolina 27
75		-	Rules of Civil Procedure. If the equitable distribution claim is filed in an existing action, the 28
76		-	automatic order shall be served in a manner provided for in Rule 5 of the North Carolina Rules 29
77		-	of Civil Procedure for service and return of process. 30
78		-	(d) The automatic order shall be immediately binding upon the party who filed the initial 31
79		-	equitable distribution claim and upon the other party once served with the automatic order. 32
80		-	(e) The automatic order shall remain in full force and effect until a final order is entered 33
81		-	regarding the equitable distribution claim, unless terminated, modified, or amended by the court 34
82		-	upon motion of either party or upon entry of a consent order by the parties. 35
83		-	(f) Entry of the automatic order shall not limit or restrict other remedies or protections 36
84		-	available to the parties." 37
85		-	SECTION 1.2. The Administrative Office of the Courts shall develop a form order 38
86		-	for the automatic order which must contain the following information: 39
87		-	(1) The case caption. 40
88		-	(2) A finding of fact that a claim for equitable distribution claim has been filed in 41
89		-	the action. 42
90		-	(3) A decretal section containing the required provisions listed in G.S. 50-23(b), 43
91		-	as enacted by this act. 44
92		-	The Administrative Office of the Courts shall have this form order finalized and 45
93		-	available on its website for use by October 1, 2025. 46
94		-	SECTION 1.3. Sections 1.2 and 1.3 of this act are effective when they become law. 47
95		-	SECTION 2. G.S. 50-20(c) reads as rewritten: 48
96		-	"(c) There shall be an equal division by using net value of marital property and net value 49
97		-	of divisible property unless the court determines that an equal division is not equitable. If the 50
98		-	court determines that an equal division is not equitable, the court shall divide the marital property 51 General Assembly Of North Carolina Session 2025
99		-	House Bill 866-First Edition Page 3
100		-	and divisible property equitably. The court shall consider all of the following factors under this 1
101		-	subsection: 2
102		-	(1) The income, property, and liabilities of each party at the time the division of 3
103		-	property is to become effective. 4
104		-	(2) Any obligation for support arising out of a prior marriage. 5
105		-	(3) The duration of the marriage and the age and physical and mental health of 6
106		-	both parties. 7
107		-	(4) The need of a parent with custody of a child or children of the marriage to 8
108		-	occupy or own the marital residence and to use or own its household effects. 9
109		-	(5) The expectation of pension, retirement, or other deferred compensation rights 10
110		-	that are not marital property. 11
111		-	(6) Any equitable claim to, interest in, or direct or indirect contribution made to 12
112		-	the acquisition of such marital property by the party not having title, including 13
113		-	joint efforts or expenditures and contributions and services, or lack thereof, as 14
114		-	a spouse, parent, wage earner or homemaker. 15
115		-	(7) Any direct or indirect contribution made by one spouse to help educate or 16
116		-	develop the career potential of the other spouse. 17
117		-	(8) Any direct contribution to an increase in value of separate property which 18
118		-	occurs during the course of the marriage. 19
119		-	(9) The liquid or nonliquid character of all marital property and divisible property. 20
120		-	(10) The difficulty of evaluating any component asset or any interest in a business, 21
121		-	corporation or profession, and the economic desirability of retaining such 22
122		-	asset or interest, intact and free from any claim or interference by the other 23
123		-	party. 24
124		-	(11) The tax consequences to each party, including those federal and State tax 25
125		-	consequences that would have been incurred if the marital and divisible 26
126		-	property had been sold or liquidated on the date of valuation. The trial court 27
127		-	may, however, in its discretion, consider whether or when such tax 28
128		-	consequences are reasonably likely to occur in determining the equitable value 29
129		-	deemed appropriate for this factor. 30
130		-	(11a) Acts of either party to maintain, preserve, develop, or expand; or to waste, 31
131		-	neglect, devalue or convert the marital property or divisible property, or both, 32
132		-	during the period after separation of the parties and before the time of 33
133		-	distribution. 34
134		-	(11b) In the event of the death of either party prior to the entry of any order for the 35
135		-	distribution of property made pursuant to this subsection: 36
136		-	a. Property passing to the surviving spouse by will or through intestacy 37
137		-	due to the death of a spouse. 38
138		-	b. Property held as tenants by the entirety or as joint tenants with rights 39
139		-	of survivorship passing to the surviving spouse due to the death of a 40
140		-	spouse. 41
141		-	c. Property passing to the surviving spouse from life insurance, 42
142		-	individual retirement accounts, pension or profit-sharing plans, any 43
143		-	private or governmental retirement plan or annuity of which the 44
144		-	decedent controlled the designation of beneficiary (excluding any 45
145		-	benefits under the federal social security system), or any other 46
146		-	retirement accounts or contracts, due to the death of a spouse. 47
147		-	d. The surviving spouse's right to claim an "elective share" pursuant to 48
148		-	G.S. 30-3.1 through G.S. 30-33, unless otherwise waived. 49
149		-	(11c) Whether a party was held in contempt of court for violation of the automatic 50
150		-	order entered pursuant to G.S. 50-23. 51 General Assembly Of North Carolina Session 2025
151		-	Page 4 House Bill 866-First Edition
152		-	(12) Any other factor which the court finds to be just and proper." 1
153		-	SECTION 3. G.S. 50-21 reads as rewritten: 2
154		-	"§ 50-21. Procedures in actions for equitable distribution of property; sanctions for 3
155		-	purposeful and prejudicial delay. 4
156		-	(a) At any time after a husband and wife begin to live separate and apart from each other, 5
157		-	a claim for equitable distribution may be filed and adjudicated, either as a separate civil action, 6
158		-	or together with any other action brought pursuant to Chapter 50 of the General Statutes, or as a 7
159		-	motion in the cause as provided by G.S. 50-11(e) or (f). Upon filing the initial claim for equitable 8
160		-	distribution as provided for in this section, the automatic order shall be entered and served as 9
161		-	provided for in G.S. 50-23. Within 90 days after service of a claim for equitable distribution, the 10
162		-	party who first asserts the claim shall prepare and serve upon the opposing party an equitable 11
163		-	distribution inventory affidavit listing all property claimed by the party to be marital property 12
164		-	and all property claimed by the party to be separate property, and the estimated date-of-separation 13
165		-	fair market value of each item of marital and separate property. Within 30 days after service of 14
166		-	the inventory affidavit, the party upon whom service is made shall prepare and serve an inventory 15
167		-	affidavit upon the other party. The inventory affidavits prepared and served pursuant to this 16
168		-	subsection shall be subject to amendment and shall not be binding at trial as to completeness or 17
169		-	value. The court may extend the time limits in this subsection for good cause shown. The 18
170		-	affidavits are subject to the requirements of G.S. 1A-1, Rule 11, and are deemed to be in the 19
171		-	nature of answers to interrogatories propounded to the parties. Any party failing to supply the 20
172		-	information required by this subsection in the affidavit is subject to G.S. 1A-1, Rules 26, 33, and 21
173		-	37. During the pendency of the action for equitable distribution, discovery may proceed, and the 22
174		-	court shall enter temporary additional orders as appropriate and necessary for the purpose of 23
175		-	preventing the disappearance, waste, or destruction of marital or separate property or to secure 24
176		-	the possession thereof. 25
177		-	Real or personal property located outside of North Carolina is subject to equitable distribution 26
178		-	in accordance with the provisions of G.S. 50-20, and the court may include in its order 27
179		-	appropriate provisions to ensure compliance with the order of equitable distribution. 28
180		-	…." 29
181		-	SECTION 4. Section 4 is effective when it becomes law. Except as otherwise 30
182		-	provided, this act becomes effective October 1, 2025, and applies to actions or claims filed on or 31
183		-	after that date. 32
	46	+	individually or jointly titled, except for customary and usual expenses 34
	47	+	historically paid for the benefit of the children from those assets without the 35
	48	+	consent of the other party in writing or by order of the court. 36
	49	+	H.B. 866
	50	+	Apr 9, 2025
	51	+	HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	52	+	Page 2 DRH30351-CI-2
	53	+	(4) Neither party shall incur unreasonable debts hereafter, including further 1
	54	+	borrowing against any credit line secured by the family residence, further 2
	55	+	encumbering any assets, or unreasonably using credit cards or cash advances 3
	56	+	against credit cards, except in the usual course of business or for customary 4
	57	+	and usual household expenses, or for reasonable attorneys' fees in connection 5
	58	+	with any claim filed under this Chapter. 6
	59	+	(5) Neither party shall remove the other party as beneficiary, co-owner, cosigner, 7
	60	+	or authorized user of any account in subdivisions (1) through (4) of this 8
	61	+	subsection nor shall they add a nonparty to any account as a beneficiary, 9
	62	+	co-owner, cosigner, or authorized user of any account in subdivisions (1) 10
	63	+	through (4) of this subsection without the consent of the other party in writing, 11
	64	+	or by order of the court. 12
	65	+	(6) Neither party shall cause the other party or the children to be removed from 13
	66	+	any existing medical, hospital, and dental insurance coverage, without the 14
	67	+	consent of the other party in writing, or by order of the court. Each party shall 15
	68	+	maintain the existing medical, hospital, and dental insurance coverage in full 16
	69	+	force and effect until the parties agree in writing or the court orders otherwise. 17
	70	+	(7) Neither party shall change the beneficiaries of any existing life insurance 18
	71	+	policy without the consent of the other party in writing, or by order of the 19
	72	+	court. Each party shall maintain the existing life insurance, automobile 20
	73	+	insurance, homeowner's insurance, and renter's insurance in full force and 21
	74	+	effect until the parties agree in writing or the court orders otherwise. 22
	75	+	(8) This order is entered without prejudice to either party. 23
	76	+	(c) The plaintiff shall serve the automatic order with the summons and complaint when 24
	77	+	there is a newly filed equitable distribution claim as required by Rule 4 of the North Carolina 25
	78	+	Rules of Civil Procedure. If the equitable distribution claim is filed in an existing action, the 26
	79	+	automatic order shall be served in a manner provided for in Rule 5 of the North Carolina Rules 27
	80	+	of Civil Procedure for service and return of process. 28
	81	+	(d) The automatic order shall be immediately binding upon the party who filed the initial 29
	82	+	equitable distribution claim and upon the other party once served with the automatic order. 30
	83	+	(e) The automatic order shall remain in full force and effect until a final order is entered 31
	84	+	regarding the equitable distribution claim, unless terminated, modified, or amended by the court 32
	85	+	upon motion of either party or upon entry of a consent order by the parties. 33
	86	+	(f) Entry of the automatic order shall not limit or restrict other remedies or protections 34
	87	+	available to the parties." 35
	88	+	SECTION 1.2. The Administrative Office of the Courts shall develop a form order 36
	89	+	for the automatic order which must contain the following information: 37
	90	+	(1) The case caption. 38
	91	+	(2) A finding of fact that a claim for equitable distribution claim has been filed in 39
	92	+	the action. 40
	93	+	(3) A decretal section containing the required provisions listed in G.S. 50-23(b), 41
	94	+	as enacted by this act. 42
	95	+	The Administrative Office of the Courts shall have this form order finalized and 43
	96	+	available on its website for use by October 1, 2025. 44
	97	+	SECTION 1.3. Sections 1.2 and 1.3 of this act are effective when they become law. 45
	98	+	SECTION 2. G.S. 50-20(c) reads as rewritten: 46
	99	+	"(c) There shall be an equal division by using net value of marital property and net value 47
	100	+	of divisible property unless the court determines that an equal division is not equitable. If the 48
	101	+	court determines that an equal division is not equitable, the court shall divide the marital property 49
	102	+	and divisible property equitably. The court shall consider all of the following factors under this 50
	103	+	subsection: 51 General Assembly Of North Carolina Session 2025
	104	+	DRH30351-CI-2 Page 3
	105	+	(1) The income, property, and liabilities of each party at the time the division of 1
	106	+	property is to become effective. 2
	107	+	(2) Any obligation for support arising out of a prior marriage. 3
	108	+	(3) The duration of the marriage and the age and physical and mental health of 4
	109	+	both parties. 5
	110	+	(4) The need of a parent with custody of a child or children of the marriage to 6
	111	+	occupy or own the marital residence and to use or own its household effects. 7
	112	+	(5) The expectation of pension, retirement, or other deferred compensation rights 8
	113	+	that are not marital property. 9
	114	+	(6) Any equitable claim to, interest in, or direct or indirect contribution made to 10
	115	+	the acquisition of such marital property by the party not having title, including 11
	116	+	joint efforts or expenditures and contributions and services, or lack thereof, as 12
	117	+	a spouse, parent, wage earner or homemaker. 13
	118	+	(7) Any direct or indirect contribution made by one spouse to help educate or 14
	119	+	develop the career potential of the other spouse. 15
	120	+	(8) Any direct contribution to an increase in value of separate property which 16
	121	+	occurs during the course of the marriage. 17
	122	+	(9) The liquid or nonliquid character of all marital property and divisible property. 18
	123	+	(10) The difficulty of evaluating any component asset or any interest in a business, 19
	124	+	corporation or profession, and the economic desirability of retaining such 20
	125	+	asset or interest, intact and free from any claim or interference by the other 21
	126	+	party. 22
	127	+	(11) The tax consequences to each party, including those federal and State tax 23
	128	+	consequences that would have been incurred if the marital and divisible 24
	129	+	property had been sold or liquidated on the date of valuation. The trial court 25
	130	+	may, however, in its discretion, consider whether or when such tax 26
	131	+	consequences are reasonably likely to occur in determining the equitable value 27
	132	+	deemed appropriate for this factor. 28
	133	+	(11a) Acts of either party to maintain, preserve, develop, or expand; or to waste, 29
	134	+	neglect, devalue or convert the marital property or divisible property, or both, 30
	135	+	during the period after separation of the parties and before the time of 31
	136	+	distribution. 32
	137	+	(11b) In the event of the death of either party prior to the entry of any order for the 33
	138	+	distribution of property made pursuant to this subsection: 34
	139	+	a. Property passing to the surviving spouse by will or through intestacy 35
	140	+	due to the death of a spouse. 36
	141	+	b. Property held as tenants by the entirety or as joint tenants with rights 37
	142	+	of survivorship passing to the surviving spouse due to the death of a 38
	143	+	spouse. 39
	144	+	c. Property passing to the surviving spouse from life insurance, 40
	145	+	individual retirement accounts, pension or profit-sharing plans, any 41
	146	+	private or governmental retirement plan or annuity of which the 42
	147	+	decedent controlled the designation of beneficiary (excluding any 43
	148	+	benefits under the federal social security system), or any other 44
	149	+	retirement accounts or contracts, due to the death of a spouse. 45
	150	+	d. The surviving spouse's right to claim an "elective share" pursuant to 46
	151	+	G.S. 30-3.1 through G.S. 30-33, unless otherwise waived. 47
	152	+	(11c) Whether a party was held in contempt of court for violation of the automatic 48
	153	+	order entered pursuant to G.S. 50-23. 49
	154	+	(12) Any other factor which the court finds to be just and proper." 50
	155	+	SECTION 3. G.S. 50-21 reads as rewritten: 51 General Assembly Of North Carolina Session 2025
	156	+	Page 4 DRH30351-CI-2
	157	+	"§ 50-21. Procedures in actions for equitable distribution of property; sanctions for 1
	158	+	purposeful and prejudicial delay. 2
	159	+	(a) At any time after a husband and wife begin to live separate and apart from each other, 3
	160	+	a claim for equitable distribution may be filed and adjudicated, either as a separate civil action, 4
	161	+	or together with any other action brought pursuant to Chapter 50 of the General Statutes, or as a 5
	162	+	motion in the cause as provided by G.S. 50-11(e) or (f). Upon filing the initial claim for equitable 6
	163	+	distribution as provided for in this section, the automatic order shall be entered and served as 7
	164	+	provided for in G.S. 50-23. Within 90 days after service of a claim for equitable distribution, the 8
	165	+	party who first asserts the claim shall prepare and serve upon the opposing party an equitable 9
	166	+	distribution inventory affidavit listing all property claimed by the party to be marital property 10
	167	+	and all property claimed by the party to be separate property, and the estimated date-of-separation 11
	168	+	fair market value of each item of marital and separate property. Within 30 days after service of 12
	169	+	the inventory affidavit, the party upon whom service is made shall prepare and serve an inventory 13
	170	+	affidavit upon the other party. The inventory affidavits prepared and served pursuant to this 14
	171	+	subsection shall be subject to amendment and shall not be binding at trial as to completeness or 15
	172	+	value. The court may extend the time limits in this subsection for good cause shown. The 16
	173	+	affidavits are subject to the requirements of G.S. 1A-1, Rule 11, and are deemed to be in the 17
	174	+	nature of answers to interrogatories propounded to the parties. Any party failing to supply the 18
	175	+	information required by this subsection in the affidavit is subject to G.S. 1A-1, Rules 26, 33, and 19
	176	+	37. During the pendency of the action for equitable distribution, discovery may proceed, and the 20
	177	+	court shall enter temporary additional orders as appropriate and necessary for the purpose of 21
	178	+	preventing the disappearance, waste, or destruction of marital or separate property or to secure 22
	179	+	the possession thereof. 23
	180	+	Real or personal property located outside of North Carolina is subject to equitable distribution 24
	181	+	in accordance with the provisions of G.S. 50-20, and the court may include in its order 25
	182	+	appropriate provisions to ensure compliance with the order of equitable distribution. 26
	183	+	…." 27
	184	+	SECTION 4. Section 4 is effective when it becomes law. Except as otherwise 28
	185	+	provided, this act becomes effective October 1, 2025, and applies to actions or claims filed on or 29
	186	+	after that date. 30