Separation Agreements

What is a Separation Agreement?
A Separation Agreement is a legally binding contract between two spouses who are living separate and apart or who plan to separate immediately after executing the Separation Agreement. The purpose of a Separation Agreement is to address and fully resolve all of the existing marital legal issues prior to divorce. A Separation Agreement is not mandatory, but it is a very useful tool to disentangle your joint finances, distribute your property, assets, and debts, and define your legal obligations post-separation. We generally recommend our clients enter into a Separation Agreement during the course of their separation.  

Do I need to have a Separation Agreement to be legally separated?
No, the only thing you need to be “legally” separated is for one spouse to move out of the marital residence, with at least one spouse having the intention for separation to be permanent. Staying in separate bedrooms under the same roof is not considered a separation.

What can be included in a Separation Agreement?
A Separation Agreement may address the following issues: Property Settlement, Spousal Support/Alimony (or waiver of the same), Child Support, and Child Custody. Property Settlement, or the division of the marital estate, details and distributes all of the assets and debts acquired during the marriage, which can include:

• the former marital residence and/or other real property,
• vehicles,
• marital debt (mortgage(s), credit cards, loans, etc.),
• bank accounts,
• stocks and bonds,
• retirement accounts,
• household goods and personal property, and
• business interests and/or ownership.

When dividing the marital estate, North Carolina and South Carolina both have a general presumption that it is equitable to equally divide all assets and debts acquired over the course of the marriage. A Separation Agreement can also detail what tax filing status you and your spouse will claim after separation, who is responsible for tax liabilities or refunds (or how they will be divided), and which parent claims dependent children on taxes. Additionally, a Free Trader Agreement is typically included, which allows you to buy or sell real property titled in your sole name without requiring your spouse’s signature or consent. Separation Agreements also typically include a waiver of your right to inherit from your spouse or contest his or her will, and a waiver of any obligation to pay the other party’s uninsured medical bills or other “necessaries,” among other things.   
One question we often get from clients is if the Separation Agreement can include an obligation for the other parent to help pay for a child’s college education. There is no law that absolutely requires a parent to pay for college expenses. In a Separation Agreement or a College Expenses Agreement, however, you and your spouse may choose to agree to pay for a child’s college expenses. Be sure to seek independent legal advice before entering into a Separation Agreement.

Why do I need a Separation Agreement?
The main reasons are fourfold:

1. To address property, debts, support obligations, and child custody in writing prior to divorce: Claims for equitable distribution and spousal support must be resolved or filed prior to divorce, or else you waive your right to those two claims. For that reason, addressing the division of your marital estate and any potential claim to spousal support within a Separation Agreement is best. If you have children and cannot always communicate effectively with your spouse, it is also best to have a child custody arrangement and child support obligation set in place soon after your separation. Even if you and your spouse are currently amicable, you cannot know if that will continue in the future. It’s best to have an agreement for child custody and child support to fall back on.
   
2. To give you self-determination of your own future: Entering into a contract like a Separation Agreement, instead of going to court, allows you the freedom and autonomy to decide the terms of your separation. If you go to court, a judge will tell you how you will end your union and determine the outcome of your legal issues.    
   
3. To save time, money, and perhaps your sanity by avoiding litigation: By entering into a Separation Agreement, you can bypass the headache and heartache of filing costly litigation and paying attorneys to fight about your money. A Separation Agreement will help preserve your marital resources and leave you and your spouse in a better place financially than if you chose to fight about your marital assets in court.
   
4. To keep your private information confidential: Finally, in North Carolina, Separation Agreements are generally not incorporated into a divorce decree. If you took your case to court for a judge to determine how your marital estate would be divided, your personal financial information would become part of the public record. Utilizing a Separation Agreement allows you to keep your financial information out of the public record. In South Carolina, a judge must approve a Separation Agreement and incorporate it as an Order of the Court, but you still benefit from utilizing a Separation Agreement in South Carolina in all other aspects mentioned above. In South Carolina, you and your spouse attend a final hearing to ask a judge to approve your Separation Agreement.

Do I need an attorney to draft a Separation Agreement?
Yes, it is best for both you and your spouse to have your own independent legal representation to draft, review, and advise each of you individually before the Separation Agreement is executed.

How do I make sure that my Separation Agreement contract is upheld?
Both parties should have their own separate attorneys to review the Separation Agreement prior to signing and receive independent legal advice for their individual situations. Independent legal representation prevents one spouse from reneging on the contract and saying he or she did not understand the contents of the contract when he or she signed it. 
Each party must attest that they have disclosed all marital assets, liabilities, and income, which allows the parties to enter into the Separation Agreement knowing that the entirety of the marital estate is addressed. When both parties have independent counsel, their attorneys can assist with the full financial disclosure to ensure the contract will be upheld.  
Both parties must sign the Agreement and their signatures must be notarized.

​How soon can I get divorced?
If you are filing for a no-fault divorce, you can file for divorce one year and one day after your date of separation. If filing for a fault-based divorce in South Carolina, you may be able to file for divorce earlier. Signing a Separation Agreement does not change the waiting period for no-fault divorce, but does give you the peace of mind that the complicated logistics of the division of your marital estate have been addressed prior to filing for divorce.
If you choose to enter into a Separation Agreement, you have control of the outcome of your division of marital assets, custody, and child support, when so much feels out of your control during separation and divorce. 

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