Is a Separation Agreement Right for Me?

A Separation Agreement in its truest terms is an “Agreement.” In order for two parties to enter into any contractual agreement within North Carolina, there must be a meeting of minds and a bargain for exchange of mutual promises or undertakings. When it boils down to the basics, a Separation Agreement or Property Settlement Agreement is a Contract dealing with marital issues.

In order to enter into a Separation Agreement in NC, both spouses must come to the same understanding in regards to the division of marital assets, potential payment for support, custody and child support. For some individuals this may be an impossible task, especially with the newly found stresses of separating and living a new life. However, for some couples, working together in a form of Collaborative Law in an effort to come to a mutual agreement just makes sense.

Separation Agreements are the least expensive way to deal with the multiple factors that surround a divorce. A Separation Agreement or Property Settlement Agreement may be entered by any two spouses that are currently married, even if already separated, and can deal with a limited amount of issues, or every issue that encompasses a dissolving marriage. The reason why they are so efficient is they take a very limited amount of time compared to litigation, and can essentially give you the same result for a fraction of the legal fees.

The agreement is only a separation agreement if the spouses are separated or about to separate

In North Carolina a separation agreement is void as against public policy unless the parties are living apart when it is executed, or plan to separate shortly afterwards. The Court of Appeals stated that rule in Stegall v. Stegall, and in Newland v. Newland it upheld an agreement signed while the spouses were still under one roof where they had agreed to separate substantially contemporaneously and the wife left roughly a month later, having made no attempt at reconciliation in the meantime.

The point is not the label on the document. In Williams v. Williams an instrument recording that the spouses were “considering the resumption of cohabitation” was held not to be a separation agreement at all, but a marital contract under G.S. 52-10, with different consequences for what it could validly do. The heart of a separation agreement, as the Supreme Court put it in In re Estate of Adamee, is the parties’ intention to live separate and apart permanently.

The execution formalities are conditions of validity

G.S. 52-10.1 authorizes a married couple to execute a separation agreement “provided, that the separation agreement must be in writing and acknowledged by both parties before a certifying officer as defined in G.S. 52-10(b),” and that officer “must not be a party to the contract.” G.S. 52-10(b) identifies the certifying officer as a notary public, or a justice, judge, magistrate, clerk, assistant clerk or deputy clerk of the General Court of Justice, or the corresponding officer of the state or country where the acknowledgment is taken.

North Carolina courts enforce this literally. In Sluder v. Sluder an agreement acknowledged by neither party was invalid as a matter of law, and in Kelley v. Kelley an improperly executed instrument was void ab initio, so that neither estoppel nor ratification could give it effect. Lawson v. Lawson shows the other side of the line: where a spouse signed in the presence of a notary, the acknowledgment was sufficient even though the seal and certificate were affixed afterwards.

What the agreement buys is the closing of an equitable distribution claim

Under G.S. 50-20(d) spouses may “by written agreement, duly executed and acknowledged in accordance with the provisions of G.S. 52-10 and 52-10.1 … provide for distribution of the marital property or divisible property, or both, in a manner deemed by the parties to be equitable,” and the agreement “shall be binding on the parties.” A comprehensive agreement bars a later equitable distribution action even where it does not mention equitable distribution by name, as the Supreme Court held in Hagler v. Hagler.

The alternative is the statutory route. Under G.S. 50-21(a) a claim for equitable distribution may be filed at any time after the spouses begin to live separate and apart; G.S. 50-21(d) requires an application for a scheduling and discovery conference within 120 days of the filing and service of the initial pleading; and G.S. 50-20(c) provides that “[t]here shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable,” which the court decides against a list of statutory distributional factors.

Waiving alimony takes express words, not general ones

G.S. 50-16.6(b) provides that “[a]limony, postseparation support, and counsel fees may be barred by an express provision of a valid separation agreement, premarital agreement, or marital contract made pursuant to G.S. 52-10(a1) so long as the agreement is performed.” The closing words matter as much as the opening ones: the bar operates while the agreement is performed.

North Carolina courts read “express” strictly. In Napier v. Napier a release of “all causes of action, claims, rights or demands whatsoever, at law or in equity,” together with language describing the document as settling the parties’ property and marital rights, was held not to waive alimony, because none of it referred to alimony or used similar language. A general release drafted for property purposes will not carry a support waiver with it.

Terms about the children bind the spouses but not the court

In North Carolina parents may contract about custody and child support, and such terms are enforceable between them, but no agreement removes the court’s authority to protect the interests of a minor child. A separation agreement therefore does not prevent either parent from later filing for court-ordered custody, and the court decides that question on the best interest of the child.

Child support follows a related rule. Where an unincorporated agreement sets an amount, Pataky v. Pataky requires the court to apply a rebuttable presumption that the agreed figure is just and reasonable, rather than simply applying the guidelines. The presumption is rebutted by showing, by the greater weight of the evidence, that the amount does not meet the child’s reasonable needs measured against the factors in the first sentence of G.S. 50-13.4(c): the reasonable needs of the child for health, education and maintenance, having due regard to the estates, earnings, conditions and accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and the other facts of the particular case.

The agreement may also promise more than the law would require. North Carolina appellate courts have enforced contractual obligations to pay a child’s college expenses and to continue support past the age of majority, on the footing that a parent may assume a larger obligation by contract than a statute imposes.

Incorporation is a separate decision from signing

Nothing requires a North Carolina separation agreement to be submitted to a court. Where the spouses do submit it and a judge approves it, Walters v. Walters treats the agreement as a court-ordered judgment: it loses its contractual character, is superseded by the order, and is enforced by contempt and execution rather than by a breach of contract suit. Where they do not, it remains a contract, and a court has no authority to modify it without the consent of both parties.

The two routes carry different risks in different directions. A judgment can be enforced without filing a fresh lawsuit but exposes the support terms to statutory modification, which G.S. 50-16.9(a) and G.S. 50-13.7(a) permit on a showing of changed circumstances. A contract cannot be rewritten by a judge but has to be sued upon, with the ordinary burdens of proving breach and, where equitable relief is sought, of proving that damages are an inadequate remedy.

A separation agreement does not itself produce a divorce

In North Carolina the agreement settles the consequences of the marriage ending; it does not end the marriage. G.S. 50-6 still requires that the spouses have “lived separate and apart for one year,” with six months’ residence in the State, and G.S. 50-8 still requires a verified complaint setting out the names and ages of any minor children of the marriage. The action is filed in district court, which G.S. 7A-244 makes the proper division for divorce, equitable distribution, alimony, custody, child support and the enforcement of separation agreements without regard to the amount in controversy — Mecklenburg County District Court for a Charlotte couple.

The order of events matters more than the paperwork. Under G.S. 50-11(e) an absolute divorce obtained in this State destroys the right to equitable distribution under G.S. 50-20 unless the right was asserted before the divorce judgment, and the only relief the subsection offers afterwards runs to a defendant who was served by publication and failed to appear, who may bring an action or file a motion in the cause within six months from the date of the judgment. G.S. 50-11(f) allows the same six months where the divorcing court lacked personal jurisdiction over the absent spouse or lacked jurisdiction to dispose of the property. An agreement that disposes of the property before the divorce is filed keeps the question from arising at all; a divorce taken first, with the property unresolved and nothing on file, is how the claim is most often lost.

Some terms cannot be put in a North Carolina separation agreement at all

A few provisions are void whatever the parties intend. A clause providing that a reconciliation will not affect the terms of a separation agreement violates the public policy behind such agreements and is unenforceable, although a comparable clause in a pure property settlement has been upheld. A provision requiring that all court proceedings between the spouses be closed to the public was struck down in France v. France as inconsistent with the qualified public right of access under Article I, Section 18 of the North Carolina Constitution. And an oral variation is not a variation: North Carolina courts have repeatedly held that spouses cannot orally modify a separation agreement, because doing so fails the formalities of G.S. 52-10.1.

Common questions

Written for North Carolina law and reviewed by David P. Sheehan, attorney, Charlotte. General information, not legal advice — see the disclaimer.

Related questions

• Can I Change the Terms of a Separation Agreement in North Carolina After it is Signed?
• Do I Have to Disclose All My Assets in Negotiating a Separation Agreement?
• What Happens if Someone Doesn’t Follow the Separation Agreement?