When a couple decides to separate, they have two options for dealing with the financial and child custody issues between them. One is a lawsuit and the other is a separation agreement. A lawsuit results in a court order, either by agreement or after a hearing before a judge. A separation agreement is a contract. There are advantages and disadvantages to each option. Finally, there is one option by which a separation agreement, which is a contract, can be converted into a consent order.
Let’s start with a separation agreement. Separation agreements work best when:
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There are no concerns about enforcement.
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The situation is basically amicable.
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Neither party is hiding assets or income.
Resolving your issues by separation agreement can be less expensive than litigation if a resolution is reached fairly quickly. A separation agreement requires that both parties agree. So there is the possibility that one party can drag out the process and then refuse to sign anything. Then that time and money was wasted, and you have to start over with a lawsuit.
To enforce a separation agreement, you have to bring a lawsuit for breach of contract. In this situation, the validity of the separation agreement can be called into question. Plus, it can take weeks, if not months, to get into court. That’s a long time if you are trying to enforce child custody or the payment of child support or alimony. To enforce a court order, the remedy is contempt, which can, in certain circumstances, get you a court date quickly.
Separation agreements are not necessarily filed with the court, so they are more private than a lawsuit. You can file a shortened version of the separation agreement with the register of deeds if needed.
Discovery, which is the process of exchanging documents, is enforceable if there is a lawsuit. Discovery is voluntary if you are only doing a separation agreement. So if one person is hiding their income or assets, then a separation agreement may not be a good option.
Let’s talk about a consent order resulting from a lawsuit. We’ve discussed that a court order is easier to enforce than a separation agreement. So if your case involves a spouse who is abusive, uncooperative, has a personality disorder, or is violent, enforcement is likely to be an issue.
We talked about discovery being voluntary if you are negotiating a separation agreement. However, with a lawsuit, you can issue discovery and compel your ex to answer the questions and produce relevant documents. You can also issue subpoenas—to banks and employers, for example—and get documents directly from the source. There is no subpoena power if you are negotiating a separation agreement.
Court orders are modifiable upon a change in circumstances. Think about custody: what a 3-year-old needs, what a 12-year-old needs, and what a 16-year-old needs are different and change over time. A separation agreement can only be modified by drafting and agreeing to a new agreement. In contrast, a judge can modify a court order.
Lastly, there are no enforceable deadlines when negotiating a separation agreement. There are lots of deadlines set by the court and the law if you file a lawsuit.
Let’s talk about that last option—a hybrid, if you will. Your separation agreement can specify that it will be incorporated into your divorce judgment. In that event, your separation agreement is a contract until the divorce judgment is filed with the court. Once filed with the court, your separation agreement becomes a court order. Another option is to settle custody and child support by court order, then settle equitable distribution (division of assets and debts) and spousal support by separation agreement. That would render equitable distribution and spousal support unmodifiable.
You and your attorney will make the decision on how to proceed based on your preferences and the facts of your particular case. What you should NOT do is try to draft a separation agreement on your own using forms from the internet. If you do that, at least let an attorney review it to make sure it’s enforceable in North Carolina and that it addresses all the issues to be determined.