At every stage of life, family law agreements can prove critical to protecting your property and rights.
Whether you are contemplating marriage, a change to your financial arrangements during marriage, or a separation from your spouse, the experienced family law attorneys with Ward and Smith can guide you through the process to ensure that your property and financial and legal interests are protected.
Types of Agreements in Family Law
Different types of family law agreements may prove useful depending on your circumstances.
These include:
Cohabitation agreements
This type of agreement is advisable between unmarried people who have decided to live together but are not planning to marry. A cohabitation agreement establishes each party's rights with respect to property purchased in joint names during the relationship and assigns responsibility for mutual expenses. A cohabitation agreement can also facilitate a parting of ways if the parties decide to end the relationship.
Premarital/Prenuptial agreements
This type of agreement addresses the property and financial rights and obligations between a couple who are soon to marry. Typically, a premarital agreement addresses both rights which the law provides by virtue of the marriage (such as inheritance rights) and rights and obligations which arise in the event that the parties separate following marriage. For more information about premarital and prenuptial agreements, click here.
Postmarital/Postnuptial agreements
After marriage, a couple may decide to address property and other rights in the event of a subsequent separation even though they are not considering a separation at the time. Postmarital agreements also may address other issues, such as inheritance matters.
Separation and property settlement agreement
This type of agreement is reached between spouses shortly before or after they separate. Typically, the agreement will address all issues and claims, including child custody and support, alimony, and the division of property and debt, known as equitable distribution.
Cohabitation Agreements
When is a cohabitation agreement useful?
A cohabitation agreement is useful for unmarried couples who live together and co-mingle their finances by mutually paying expenses, assuming debts, and contributing to the accumulation of assets. And while romantic partners may be the most common parties to a cohabitation agreement, platonic roommates can also benefit from having one. A cohabitation agreement provides protection and stability if there is a parting of the ways.
What issues can a cohabitation agreement address?
A cohabitation agreement may address many different topics and can be tailored to your specific situation. For example, when you and a roommate or partner move in together, it may be wise to list in a cohabitation agreement which property belongs to which person. Establishing from the beginning that you own certain pieces of furniture, kitchenware, and devices can prevent disputes over who takes what if things go bad. You may address how expenses like rent and utilities will be shared while living together, and if you break up.
A cohabitation agreement may also address the parties' respective interests in property purchased while living together. For example, suppose that you move into your partner's house. Your partner has been paying the mortgage and asks you to contribute 50% of the mortgage payments. You are happy to do this, but you have concerns about what might happen in the event that the two of you break up. A cohabitation agreement can establish that you are entitled to an interest in the home commensurate with your contributions to the mortgage.
Absent such an agreement, you could wind up spending thousands of dollars in legal fees to fight for a share of the equity in the home.
Postmarital Agreements
May my current spouse and I enter into an agreement during our marriage, even though we have no immediate plans to separate?
Yes. While the law in North Carolina used to restrict spouses' rights to enter into an agreement with one another while married, if they were not contemplating separation, spouses may now sign a postmarital agreement to address property and inheritance rights, similar to a premarital agreement.
While postmarital agreements are subject to certain limitations, married couples may address issues regarding the distribution of their property in the event of separation, regardless of whether they are contemplating separation when they sign.
However, such agreements should be carefully prepared to avoid any confusion if they separate; further, the property and inheritance provisions of a postmarital agreement are not conditioned on separation.
This means that, unless the parties include specific language indicating that the provisions of a postmarital agreement are only to take effect in the event of separation, those provisions become enforceable upon signing regardless of whether the parties ever contemplate separation.
The family law attorneys at Ward and Smith can put your mind at ease by ensuring that your postmarital agreement reflects you and your spouse's wishes.
May my current spouse and I include a provision in a postmarital agreement that waives alimony in the event that we separate in the future?
No. Whether you and your current spouse are able to include an alimony waiver or any other provision dealing with alimony in a postmarital agreement depends on whether you intend to and do separate shortly after you sign the agreement. If you do sign such an agreement, which addresses alimony, and then separate shortly afterwards, the agreement is valid and enforceable (though it would be more appropriately characterized as a separation agreement).
However, a provision that addresses alimony in a postmarital agreement when there is no plan to separate is not valid and cannot be enforced.
May my spouse and I reach an agreement concerning child custody and/or support in the event that we separate in the future?
Provisions on child custody and/or support in a premarital or postmarital agreement will never be binding on a court. Put differently, even if spouses set forth terms for child custody and/or support in an agreement, a court is NOT bound by those terms and has the authority to decide child custody and support based on the best interest of the child even if the court's decision departs from the bargained-for understanding between the parties.
You may include child custody and support provisions in an agreement in hopes that the court will follow them, but such terms will never preclude the court from reaching a different conclusion.
Separation and Property Settlement Agreements
Is it in my best interest to sign a separation agreement?
Usually, a separation agreement is a good idea to establish your legal rights and obligations after separation. Generally, these rights and obligations involve (when appropriate) child custody and support, equitable distribution of property, and alimony, along with other rights. In the absence of a separation agreement, a court will ultimately decide those issues if one party brings a claim against the other.
A family law attorney can review the circumstances of your separation and any proposed terms of agreement to provide guidance on whether signing a separation agreement is in your best interest.
What are the requirements for a valid separation agreement?
Under North Carolina law, a separation agreement must be in writing and signed before a "certifying officer," such as a notary, judge, or clerk of court. The agreement must have certification for the notary to sign stating that you and your spouse appeared before the notary and expressed your assent to all terms and conditions in the agreement.
As an additional matter, North Carolina courts will only enforce a separation agreement if the parties, when they signed the agreement, were already living separate and apart or were planning to separate and did so shortly after they signed the agreement.
One or the other must leave the marital residence, and merely staying in separate bedrooms will not be considered a separation. Notably, the law of North Carolina has not set a specific deadline by which you or your spouse must leave. That being the case, it is best for one of you to leave no later than 10 days after signing in order to avoid jeopardizing the agreement's validity.
May my spouse and I address child support and/or custody through our separation agreement?
The short answer is yes, but the provisions on child support and/or custody will not necessarily be binding on the court if disputes arise after signing. A court will only enforce such provisions if the judge determines that they are consistent with the best interests of the child(ren).
Put another way, when one party asks a court to enforce one or more provisions addressing child support or custody in a separation agreement, the court has the authority to enter an order which does not follow the agreement's terms if the judge decides that different custody or support terms are more consistent with the best interest of the child(ren).
May my spouse and I execute a separation agreement waiving any child support obligation?
The general rule in North Carolina is that, even if parents have agreed to waive child support obligations, such a waiver is not binding on the court in the event of a future dispute about support. The court always has the authority to ignore an agreement and award child support regardless of any purported waiver.
What if I'm unfamiliar with my spouse's finances?
Spouses are normally considered to be in a "confidential relationship" and are required to be open and honest with each other. Therefore, they each have a duty to disclose their financial and property information so that the other spouse may make an informed decision on whether the agreement's financial and property terms are fair.
However, once the confidential relationship between spouses terminates, so does the duty to disclose.
In North Carolina, there is no hard-and-fast rule governing when the confidential relationship between spouses terminates as they contemplate separation, but the key consideration is whether the parties have hired their own attorneys to assist them.
I'm not sure what my or my soon-to-be ex-spouse's finances are going to look like in the future. May the separation agreement include provisions for reducing or increasing alimony or child support?
Yes, a separation agreement may provide for different amounts of alimony or child support depending on changes in financial circumstances, such as increases or decreases in expenses, incomes, loss of employment, of one or both spouses (but remember, child support provisions need not be followed by a judge).
One example is a provision that establishes an annual support obligation equal to a certain percentage of the paying spouse's income. However, such provisions are usually complicated; the family law attorneys at Ward and Smith are experienced in preparing such provisions and can provide you with assistance to ensure that your wishes are accurately captured in the agreement.
What happens if I have agreed to pay alimony, and my ex-spouse remarries or starts living with someone in the future?
It is very important for your separation agreement to address the effect of remarriage or cohabitation (see below) by your ex-spouse after the agreement is signed. A provision should always be included that provides that your alimony obligations will terminate on remarriage or cohabitation unless you have agreed otherwise.
Cohabitation occurs when your ex-spouse starts living with a new partner. Some agreements provide that spousal support obligations terminate upon the dependent spouse's cohabitation. Others make clear that the support obligation survives the dependent spouse's cohabitation. The legal definition of cohabitation is:
The act of two adults dwelling together continuously and habitually in a private heterosexual relationship, even if this relationship is not solemnized by marriage, or a private homosexual relationship. Cohabitation is evidenced by the voluntary mutual assumption of those marital rights, duties, and obligations which are usually manifested by married people, and which include, but are not necessarily dependent on, sexual relations.
Because the legal definition is somewhat unclear, many separation agreements provide their own definition of cohabitation. If not addressed in the agreement, the issue of whether cohabitation has occurred is left up to the court to decide based on the facts of each case. This is why it is important for the separation agreement spell out what cohabitation means.
For example, it may define cohabitation as your ex-spouse living with a new partner for a defined period of time and engaging in any form of sex with that person, regardless of whether they share finances or assume any form of marital rights or obligations.
Cohabitation provisions are often complicated yet carry enormous importance. The family law attorneys at Ward and Smith can help you draft clearly worded remarriage and cohabitation provisions.
Should my agreement be approved by the court?
Separation agreements are most commonly executed when divorce is around the corner, but they do not have to be approved by the court.
However, you may provide in the agreement that it will become a part of any absolute divorce judgment. The decision of whether to incorporate your separation agreement into a divorce judgment has important ramifications for your ability to modify its terms and for the method by which you would enforce it in the event of breach.
If both agree to include the separation agreement in the divorce judgment, the separation agreement becomes a court order. If the parties decide not to include the terms in the divorce decree, the separation agreement simply remains a private contract between you and your ex-spouse.
If the agreement is not incorporated in the divorce judgment, and the other party violates the agreement (let's say, by failing to pay alimony), then the only way to enforce the agreement is to file a lawsuit for breach of contract to recover what is owed and to force future compliance with the agreement.
Additionally, the court does not have any authority to modify any provision of the agreement (subject, of course, to the rules applying to child custody and support).
The story is very different if the agreement is included in the divorce judgment. In that case, the agreement becomes a court order, meaning that if you or your ex violates the agreement, the court may hold you or your ex in contempt and has the authority to give jail time until the order is obeyed. Incorporating the agreement into a divorce judgment also has consequences for modification.
For example, if you bring suit to enforce an incorporated agreement which includes alimony, custod,y or child support provisions, the court may modify those provisions if there has been a substantial change in financial circumstances since the agreement was signed. This means that, if the agreement has been incorporated and requires you to pay alimony to your ex, but you have lost your job through no fault of your own, the judge may reduce or completely excuse your alimony obligation.
Because the decision of whether to incorporate a separation agreement has such dramatic legal consequences, it is wise to consult with a lawyer to understand the considerations involved.
I feel like my separation agreement is unfair. Do I have to follow its terms?
While unfairness alone will not usually serve as grounds for rescinding an otherwise valid separation agreement, the circumstances surrounding the execution of the agreement may indicate that one or both parties should not be held to its terms. Circumstances that may justify rescission of a separation agreement include:
- duress;
- mistake;
- undue influence;
- fraud; and
- lack of disclosure of property or finances.
An experienced family law attorney can discuss with you the circumstances under which you signed a separation agreement to determine whether you have a reasonable argument against enforcement.
What happens if I reconcile with my spouse?
Reconciling with your spouse after separation may have significant consequences regarding the enforceability of your separation agreement. Because separation is a part of the bargain, a subsequent reconciliation may void some or all of the provisions contained therein unless the effects of reconciliation are addressed in the agreement.
As you consider reconciling with your spouse, it is in your best interest to discuss the legal ramifications with an experienced family law attorney. Ward and Smith's family law team can review your separation agreement to determine the extent to which reconciliation would impact your legal position.
I am thinking about getting married again. What happens to the separation agreement I signed with my former spouse?
By default, if you are planning to remarry and you are receiving alimony, you will lose your rights to alimony. To allow for the parties to pivot off this default rule, most separation agreements contain provisions addressing what will happen in the event of remarriage.
Some maintain the obligation even after the dependent spouse remarries, while others may only reduce the amount. That said, remarriage does not change the rights and obligations established by a separation agreement as to issues other than alimony unless the agreement itself states otherwise.
My former spouse just passed away. Do I still have a claim on the estate for spousal support under my separation agreement?
Unless stated otherwise in the agreement, future obligations to pay and rights to receive alimony end at death. However, this does not apply to alimony payments which had not been paid before death, which are called alimony arrears or arrearage. If the paying ex dies with outstanding alimony arrears, the receiving ex has a claim against the paying ex's estate.
How can I enforce my separation agreement?
In the event that your former spouse has not performed according to the terms of your separation agreement, you may seek relief in the courts of North Carolina. An important consideration for enforcing a separation agreement is whether the agreement has been incorporated into a divorce judgment (see above).
In summary, if the agreement has not been included in the divorce judgment, then you may enforce the agreement only in a lawsuit for breach of contract and may only recover the amount owed or ask for the other party to honor the agreement.
However, if the agreement has been included in the divorce judgment, then you may have the other party held in contempt of court for violating its terms, which allows the court to imprison the other party until he/she complies. The family law attorneys at Ward and Smith can guide you through the process of enforcement to help you hold your former spouse to their obligations.
May I recover my attorney's fees if I have to enforce the Separation and Property Settlement Agreement?
Whether you can recover attorney's fees depends upon whether the agreement includes a provision that allows either of you to collect attorney's fees if the other violates the agreement. This is why you should consult with an experienced family law attorney to assist you in the drafting process to anticipate future issues, such as attorney's fees.
