Do I Have to Disclose All My Assets in Negotiating a Separation Agreement?

Through a series of cases and case law in North Carolina, the North Carolina Court of Appeals and Supreme Court has laid out specific circumstances in which an individual must disclose assets to his or her spouse regarding the construction of a Separation Agreement.

Through this evolution of case law, Courts in North Carolina have rationed that there is a confidential relationship in existence between a husband and wife during marriage, which creates a fiduciary duty toward the other; requiring disclosure of all assets. In Link v. Link, 278 N.C. 181 (1971) the court even held this confidential relationship to be extended for a short period after a spouse has left the marital residence. Later in 1988 the North Carolina Supreme Court in Avriett v. Avriett, 322 N.C. 468 held that under normal circumstances, when one spouse hires an Attorney, the fiduciary duty to disclose ends. Ten years later in 1998 the North Carolina Court of Appeals reviewed a similar issue again and held in Daughtry v. Daughtry, 128 N.C. App. 737 that if both spouses are represented by separate counsel, a confidential relationship cannot exist, and there is no duty to disclose whatsoever. However, Harroff v. Harroff held that if an single Attorney represents both individuals, the fiduciary duty has not ended and full disclosure is required. With this being said, it is important to understand that your Attorney may not be representing you if both you and your spouse retain the Attorney together.

It is further important to remember that a Separation Agreement and/or a Property Settlement Agreement will be dividing an entire estate that you may have worked years to create. Approximately 70% of the clients who retain us have an unrepresented spouse, which puts the opposing side at a great disadvantage. Regardless of education, intellectual capacity or current employment, a non-Attorney is at a huge disadvantage in the negotiation and preparation of a Separation and Property Settlement Agreement.

If you believe that you and your spouse may be separating, it is imperative that you at least consult with an Attorney regarding your rights prior to entering into any Agreement in North Carolina. At the Law Offices of David P. Sheehan we regularly meet with clients prior to separation to assist them with pre Divorce planning. Contact our firm and speak with a Charlotte Separation Agreement Attorney and see how we can help.