Rep. Budd files bill in North Carolina House to prevent asset concealment in divorce cases

A new bill filed by State Rep. Laura Budd in the North Carolina House seeks to prevent spouses from disposing of property or withdrawing funds without consent during divorce proceedings, according to the North Carolina State House.

The bill, filed as HB 866 on April 9 during the 2025 regular session, was formally listed with the short title: ‘Automatic Ord/Equitable Distribution Claim.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill mandates the automatic entry of a court order to prevent spouses from wasting, converting, or concealing assets upon filing a claim for equitable distribution. The order prohibits parties from disposing of property, withdrawing funds from various accounts, changing insurance beneficiaries, or incurring unreasonable debts without written consent from the other party or a court order. It ensures existing insurance coverage remains until otherwise agreed or ordered by the court. The automatic order is binding upon filing and service, remaining effective until a final order is issued, unless modified or terminated by the court. This legislation becomes effective Oct. 1, 2025, and applies to claims filed on or after that date. The Administrative Office of the Courts is tasked with developing a form for this order by Oct. 1, 2025.

Of the two sponsors of this bill, Sarah Stevens proposed the most bills (28) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Budd graduated from Ohio University in 1999 with a BA and again in 2002 from Wake Forest University School of Law with a JD.

Budd, a Democrat, was elected to the North Carolina State House in 2023 to represent the state’s 103rd House district, replacing previous state representative Rachel Hunt.