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What to Include in Your Separation or Property Settlement Agreement


Separation agreements and property settlement agreements are effective in dealing with the countless rights and obligation following a marital separation. A separation agreement or property settlement agreement in its most basic form can accomplish the objectives to protect assets, protect against future claims for alimony, resolve disputes over marital property and debts, and to allow each person to enter into future debts with real or personal property without affecting the interest of the other party. Oftentimes, a separation and property settlement agreement is more advantageous than a court action because the parties can contractually bind the other to specific terms that a court may not order. But probably the biggest advantage is in avoiding the embarrassing and unpredictable outcome associated with court proceedings.

When drafting a separation agreement or property settlement agreement, it is important to realize that North Carolina considers spouses, even when separated under certain circumstances, are in a confidential relationship with one another. As such, the parties have a duty to disclose all material facts. The failure to do so may constitute fraud and make the agreement invalid. A presumption of fraud will occur when a person in the confidential relationship benefits in any way from that relationship. However, if either spouse hires an attorney, that confidential relationship may cease.

When meeting with an attorney about drafting a separation agreement or property settlement agreement, it is important to disclose all information regarding your financial status, custody, visitation and support of minor children, alimony, real and personal property division, and any other matter that may impact you or your spouse. Generally, you must go through, in specific detail, all assets and liabilities. Both spouse must fully disclose each and every asset and liability to ensure the validity of the agreement.

Each party’s objectives will vary based on familial circumstances. Determining what specific provisions will be included in a separation agreement or property settlement agreement varies widely. If a husband and wife have been married only a short time, have no children together, alimony is not an issue, and there are no children involved, a basic separation agreement may suffice

However, for spouses that have been married for a longer period of time, have minor children, acquired marital property, and one spouse is dependent upon the other spouse for support and maintenance, a longer and more detailed separation agreement may be required.  In addition, this separation agreement or property settlement agreement must take care of post-separation support and alimony, provide for child support, custody and visitation, settlement of claims of marital property, and settlement matters related to taxes and insurance.

No matter the form, length, or complexity of the separation agreement or property settlement agreement, it should include clarifying provisions as to whether the agreement will be incorporated into a divorce judgment, rights upon breach of an agreement, effects of reconciliation by the spouses or cohabitation with third parties, and the process for amending or modifying the separation agreement or property settlement agreement. Otherwise, a North Carolina judge may speculate what the party’s intentions were, oftentimes with unintended or negative results.

Having an attorney to properly draft or review your separation agreement or property separation agreement is critical because a variety of mistakes can render the settlement agreement settlement agreement invalid.