What Is a NC Separation Agreement?
A North Carolina separation agreement is essentially a private contract between the husband and wife that provides terms for the parties to live separate and apart now (during the period of separation between the spouses) and in the future (in most instances if/when the parties obtain a divorce). Separation agreements may contain terms such as an equal division of household furnishings , bank accounts, retirement accounts and other assets. They also may provide for any debts to be paid and/or for the payment of alimony and child support. Separation agreements allow many couples to avoid a court battle, which is especially helpful when minor children are involved and spouses want to maintain generally friendly relations.
Common Elements of NC Separation Agreements
One or more of the following topics is covered in most NC separation agreements:
Division of Property
All of the property and debts of a couple are subject to equitable distribution in North Carolina. As such, a couple may decide whether they want to divide their property by agreement, as opposed to dividing it later by a judge. In this regard, the parties should work out between themselves who gets what assets and takes what debts. Given the need to exchange financial information, including the value of all assets and obligations of the marriage, it is usually advisable to share a net worth statement at the time the agreement is drafted.
Alimony
Alimony is the support paid from one spouse to another after the parties separate or divorce. The form of alimony is usually one spouse paying the other spouse support as part of the agreement. There does not need to be a significant economic difference between the parties to negotiate an alimony agreement. The terms of the alimony agreement generally cover: who pays, the amount to be paid, the duration of the payments, and what happens to each party’s other assets and/or debts in place of spouse support.
Child Custody & Support
There are two types of custody: legal custody and physical custody. Legal custody addresses the decision making authority for the children. Who is going to make decisions about the children? Health care, education, religion, and where the children have any extra-curricular activities or events are areas that require the parties to make decisions. Physical custody addresses where the children will spend the majority of their time, or residential custody. If a parent has primary physical custody, the other parent will have visitation on a regular schedule. The terms of a child custody agreement typically address the current arrangement of physical custody, future decisions regarding custody, and provide a schedule detailing where the children will be living during the week and on the weekends. A child support guideline worksheet should be used to figure out the child support amount to be paid. Also, parties can agree on additional expenses, such as health care costs or extra-curricular activities, to be paid by the other spouse in addition to child support.
How to Write an Effective NC Separation Agreement
As with most things, the best way to go about drafting goals is to begin with the end in mind. Noting, that the separation agreement is a contract, it is helpful to determine the specific terms you want to include in the contract. Common provisions in a NC separation agreement include provisions on: child support, custody, and parenting time; spousal support; distribution issues; and specific contractual provisions including confidentiality and a stipulation that neither party will disparage the other party. Once the terms are agreed upon, then the parties can work with an attorney to draft a binding and enforceable separation agreement that will ultimately lead to a divorce.
In North Carolina, you do not have to have a separation agreement; however, if there are minor children, we generally advise clients to have one. One of the reasons we recommend a separation agreement for families with children is that it helps navigate the separation and divorce process with a clear plan. A separation agreement will allow you to outline a plan that will help resolve issues if the family cannot agree on certain terms during the process, reduce your costs, and help move through the process more quickly. In addition, the separation agreement can outline terms like, property distribution, alimony, child custody and support, specific contractual provisions, health care provisions, important deadlines, and communicate a plan to the next legal process after divorce.
NC Separation Agreement Sample Format
Typically, a separation agreement will include the following sections:
Introductory Paragraph
An introductory paragraph will identify the parties, mention the date of marriage, and refer to the effective date of the separation or separation date as of a certain date.
Recitals
A recitals section will provide information on the timing of the separation and the circumstances surrounding the termination of the marriage. For example:
"Whereas the parties were married on January 10, 2005 in Charlotte, North Carolina; Whereas, the parties separated and live separate and apart beginning on March 1, 2015. Whereas the parties have agreed that their marriage is irretrievably broken…."
Agreement of the Parties
Then, the parties will provide the court with a summary of their dealings for future use. Each topic is divided into separate sections for clarity. Typically, a separation agreement will include the following topics:
The Wife’s Retained Property
The Husband’s Retained Property
Marital Property
Real Estate
Alimony
Attorney’s Fees
Child Support
Visitation
This is not an all-inclusive list of possible sections in a legal separation agreement. It is meant only to provide you with a general template, format, and idea of terms.
Legal Formalities and Notices
North Carolina separation agreements do not need to be formally filed or sworn under oath, as does a property settlement agreement. In that sense they are less formal. A separation agreement is simply a contract between two people who have separated from each other. In North Carolina only one spouse has to sign the agreement for it to be effective. In this way the unilateral execution of the agreement is different from the statute that governs property settlement agreements which requires that both spouses sign the agreement in order for it to be enforceable.
North Carolina law does not require a separation agreement to be notarized or witnessed. I advise clients to have the separation agreement signed in front of a notary public and witnessed by a friend. It may not be necessary for enforceability , but it is always better from a trial perspective if the agreement is clearly signed in a manner that is above reproach.
If there are any written mutual releases, those will only be enforceable in very limited circumstances. For example, a release of future claims that has not been approved by the Court would not bar any claim for child support or postseparation support.
Avoiding Common Pitfalls
Many people write their own separation agreement as the court process is time-consuming, drawn-out, and expensive. However, when drafting your own separation agreement, take care not to make these common mistakes.
The Domestic Procedures Manual lays out what issues need to be at least touched on in a legal separation agreement in North Carolina. If your agreement doesn’t address one of those topics in some way, you may have a problem down the road if you ever want to modify that issue. It is best just to address all the above-listed issues in a separation agreement so you do not have to worry about having omitted something important.
It is not a good idea to go back and forth with your spouse to attempt to negotiate and modify a form as you draft a separation agreement. There are so many vital issues to address in a separation agreement and there is a significant amount of language from North Carolina case law and statutory law that could be forgotten if you are just trying to piece together a form. A form is only a starting point for discussion as it does not differentiate between people. An experienced attorney knows how to draft a separation agreement that would be favorable for your unique specific situation and still cover all of your bases. Also, if each spouse is considered "pro se," your agreement could be attacked later for being unconscionable (i.e., where one spouse was at an overwhelming advantage to the other). A separation agreement prepared by an experienced attorney is a lot harder to attack in court.
It is very important to use precise definitions in a separation agreement. By having definitions in the agreement, it will make it clear to any judge interpreting the agreement later what the parties intended when they agreed to a certain provision of the agreement. For instance, if the separation agreement provides that "the Husband shall pay the Wife the sum of $10,000" and does not define the word "pay", a court could interpret that to mean "give" (i.e., a straight cash payment), the parties could later argue that it meant "transfer", (i.e., the transfer of an asset worth $10,000) or it could mean "give in the future" when certain conditions are met. If the agreement had a definition for the word "pay" as meaning to "immediately pay" and "in cash", it would be hard to argue later that the term means anything else.
Amending a NC Separation Agreement
A common concern for many people dealing with separation agreements is whether or not these agreements can be modified once signed. For many people, a "separation agreement" is the agreement entered into by both spouses to divide their assets and debts as they see fit, and to agree on payment of alimony if necessary. These types of separation agreements may be very detailed and lengthy, but they can be modified. There is a small but important caveat to this: The change must be in writing and signed by the party against whom it is sought to be enforced.
In other words, if the terms of the agreement address various topics (financial, child support, etc.) and the parties’ circumstances change necessitating a reworking of the agreement (for instance, one spouse loses a job and income, while the other spouse becomes fit to work), the person who no longer wants to be subject to the terms of the contract must agree to do so, otherwise the terms will remain binding.
If there has been a change of circumstances, and one party wants to decrease alimony obligations or modify the amount of support to the children, there is an opportunity for the other party to agree. MacManus v. MacManus, 69 N.C. App. 775, 318 S.E.2d 872, 1984. For instance, in the case above, a doctor who was forced to stop seeing patients because of health problems could seek to modify alimony, but he had to initiate the process by also stating that he still wanted to enforce the agreement.
A separation agreement is a contract, and therefore subject to conditions set out in basic contract law. As stated above, conditions set out in the agreement require a written modification signed by both parties. This means that any oral modifications are ineffective until reduced to writing and signed. MacManus 69 N.C. App. 775, 318 S.E.2d 872, 1984. However, if a party is in material breach, this may be sufficient to terminate the agreement. Brooks v. Brooks, 69 N.C. App. 395, 316 S.E.2d 631, 1984.
Frequently Asked Questions
* What is a separation agreement?
A separation agreement is a written contract, negotiated by the parties (usually with the assistance of counsel), that addresses and resolves all matters (i.e. custody, equitable distribution, alimony, child support, attorney’s fees, property division, debt division, date of separation, etc.) as it relates to divorce or post-separation issues.
* Are separation agreements enforceable in NC?
Separation agreements are enforced in NC as enforceable contracts. Therefore the law applies all the legal doctrines that apply to any other enforceable contract (such as the Statute of Frauds, doctrine of unconscionability, etc.). Some separation agreements will also be conditioned upon the entry of an absolute divorce.
* How much does a separation agreement cost?
The cost of a separation agreement varies from four figures to five figures, depending on the complexity of the issues and the parties’ trust level. The drafting of a separation agreement is a process that usually takes months, with endless phone calls and revisions between the attorneys and their clients. It is usually not an instantaneous process or result.
* It is too difficult for us to come to terms of a separation agreement. Now what do we do?
If you can’t settle a separation agreement , the next step is to file a lawsuit, go through the discovery process and engage in settlement negotiations. Settling really is the best option since these types of agreements are fully enforceable as long as they meet the minimal legal requirements. If the parties can’t settle, at least they can agree on some general parameters of an agreement and/or what issues are essential to get resolved in advance of going to court for a trial.
* Is a separation agreement a divorce?
No, a separation agreement is not a divorce. It is a contract that settles your judicially irreconcilable marital claims. It is not the same thing as a settlement of the marital claims that can be adjudicated in a divorce action.
* Do we need a separation agreement before filing for divorce?
You do not have to have a separation agreement before filing for divorce. If you do not have a separation agreement, then the issue would be whether a claim is barred due to the running of the statute of limitations. If the parties can’t amicably resolve all claims, it is highly recommended that they put on the table some issues that need to resolved as soon as possible. Those issues will typically include child custody and/or child support.