North Carolina

GROUNDS FOR DIVORCE:

There are only two grounds for divorce in North Carolina.

1. One-year separation. It requires to tell the truth under oath, and to assert that you and your spouse have been living separate and aside for one-year period. The marital relationship should not have resumed at any point during the separation period It would not be enough to live in separate bedrooms, or to not engaged in acts of sexual intercourse. You must live in separate residences during that year. You do not need to file any papers to document the beginning of your separation; your assertion under oath will suffice to prove that the year has elapsed.
2. Incurable Insanity. However, this is rarely used.

RESIDENCY REQUIREMENTS:

There are only two requirements for filing for divorce in North Carolina:

1. You must have been a resident of North Carolina for at least (6) six months, and
2. You must have been living separately from your spouse for at least one year and one day on the day that you file.

COMMENCING YOUR CASE:

1. You are required to prepare 3 (three) copies of a divorce Complaint and Summons and have the complaint verified and notarized.
2. You are required to take the documents and the $90 filing fee to your county courthouse. File the papers.
3. You are required to serve the papers on your spouse either by sheriff, certified mail, or other manner designated by statute.
4. You are required to file a proof of service with the court.
5. Thirty days after the other party is served, file a notice of hearing for the divorce.
6. You are required to take 3 copies of a judgment with you to court on the day of the hearing.
7. You are required to testify that the facts in your Complaint are true and that you want a divorce
8. The judge will sign your divorce judgment.

Are Separation Agreements Enforceable Under North Carolina Law?

Yes. The North Carolina General Statutes explicitly authorize married couples to enter into separation agreements. Specifically, Section 52-10.1 of the Statutes states as follows:

§ 52-10.1. Separation agreements.

Any married couple is hereby authorized to execute a separation agreement not inconsistent with public policy which shall be legal, valid, and binding in all respects; 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). Such certifying officer must not be a party to the contract. This section shall not apply to any judgment of the superior court or other State court of competent jurisdiction, which, by reason of its being consented to by a husband and wife, or their attorneys, may be construed to constitute a separation agreement between such husband and wife.

What Are the Benefits of Entering into a Marital Separation Agreement?

By setting forth your agreement on issues such as the distribution of marital property, alimony, and child support, you can substantially reduce the cost and time required to obtain a divorce. You can also avoid the stress and uncertainty of having complete strangers decide these important issues. In addition, couples frequently find that by entering into an agreement, they decrease the bitterness and animosity that frequently arises in divorce. Several studies have shown that on average, couples who sign marital separation agreements reduce the cost of divorce by more than 65%.

When can a Couple Sign a Marital Separation Agreement?

A marital separation agreement may be drawn before or after you have filed for divorce ? even while you and your spouse are still living together.

What Happens if a Husband and Wife Choose to Reconcile (Continue Living Together as Husband and Wife) After they have Signed a Marital Separation Agreement?

This issue has been dealt with on several occasions by the North Carolina courts. In general, a separation agreement will not be enforceable if the parties have actually reconciled after executing the separation agreement. The most recent North Carolina court decision addressing reconciliation after the execution of a separation agreement was issued in 2004 by the North Carolina Court of Appeals. The Court held as follows:

Under N.C. Gen. Stat. § 52-10.1, married couples may execute separation agreements, however the executory terms of a separation agreement are terminated upon the “resumption of the marital relation.” In re Estate of Adamee, 291 N.C. 386, 391, 230 S.E.2d 541, 545 (1976). N.C. Gen. Stat. § 52-10.2 defines the resumption of marital relations as the “voluntary renewal of the husband and wife relationship, as shown by the totality of the circumstances. Isolated incidents of sexual intercourse between the parties shall not constitute resumption of martial relations.” N.C. Gen. Stat. § 52-10.2 (2003). The cases that apply this statute address whether married couples have reconciled and resumed cohabitation by looking at the particular circumstances that evidence a husband and wife relationship.

Oakley v. Oakley, 165 N.C. App. 859 (2004).

Pension plans, which fall in the category of retirement plants known as "defined benefit plans," present many pitfalls and challenges in divorce actions. Many litigants do not realize that their pensions are considered "property" that is valued and divided in divorce. In addition, valuing and distributing a pension plan can be more difficult than is the case with other types of assets.

Valuation of a pension plan is done to determine its present-day value, which can then be used to determine the amount, if any, that the other spouse may be entitled to receive as a lump sum payment. In the case of Cunningham v. Cunningham, 171 N.C. App. 550 (2005), the North Carolina Court of Appeals ruled that the following methodology should be used to value defined benefit plans for the purposes of equitable distribution:

First, the trial court must calculate the amount of monthly pension payment the employee, assuming he retired on the date of separation, will be entitled to receive at the later of the earliest retirement age or the date of separation. This calculation must be made as of the date of separation and “shall not include contributions, years of service or compensation which may accrue after the date of separation.” [N.C. Gen.
Stat. § 50-20.1(d)] Second, the trial court[,] [using an acceptable mortality table] must determine the employee-spouse’s life expectancy as of the date of separation and use this figure to ascertain the probable number of months the employee-spouse will receive benefits under the plan. Third, the trial court, using an acceptable discount rate, must determine the then-present value of the pension as of the later of the date of separation or the earliest retirement date. Fourth, the trial court must discount the then-present value to the value as of the date of separation. In other words, determine the value as of the date of separation of the sum to be paid at the later of the date of separation or the earliest retirement date. . . . Finally, the trial court must reduce the present value to account for
contingencies such as involuntary or voluntary employee-spouse termination and insolvency of the pension plan. This calculation cannot be made with reference to any table or chart and rests within the sound discretion of the trial court.

Cunningham v. Cunningham at 556-557.

Obviously, the valuation process is complex. In addition, because there is no precise method for ascertaining when an employee may cease his or her employment, the calculation of present-day value is inherently subjective.

Much of the law pertaining to qualified domestic relations orders is Federal. However, Section 50-20.1 of the North Carolina General Statutes sets forth some basic provisions and requirements regarding the distribution of pensions and other retirement assets. The text of that section is as follows:

§ 50-20.1. Pension and retirement benefits.

1. The award of vested pension, retirement, or other deferred compensation benefits may be made payable:
   1. As a lump sum by agreement;
   2. Over a period of time in fixed amounts by agreement;
   3. By appropriate domestic relations order as a prorated portion of the benefits made to the designated recipient at the time the party against whom the award is made actually begins to receive the benefits; or
   4. By awarding a larger portion of other assets to the party not receiving the benefits and a smaller share of other assets to the party entitled to receive the benefits.
2. The award of nonvested pension, retirement, or other deferred compensation benefits may be made payable:
   1. As a lump sum by agreement;
   2. Over a period of time in fixed amounts by agreement; or
   3. By appropriate domestic relations order as a prorated portion of the benefits made to the designated recipient at the time the party against whom the award is made actually begins to receive the benefits.
3. Notwithstanding the provisions of subsections (a) and (b) of this section, the court shall not require the administrator of the fund or plan involved to make any payments until the party against whom the award is made actually begins to receive the benefits unless the plan permits an earlier distribution.
4. The award shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties), simultaneously with the employment which earned the vested and nonvested pension, retirement, or deferred compensation benefit, to the total amount of time of employment. The award shall be based on the vested and nonvested accrued benefit, as provided by the plan or fund, calculated as of the date of separation, and shall not include contributions, years of service, or compensation which may accrue after the date of separation. The award shall include gains and losses on the prorated portion of the benefit vested at the date of separation.
5. No award shall exceed fifty percent (50%) of the benefits the person against whom the award is made is entitled to receive as vested and nonvested pension, retirement, or other deferred compensation benefits, except that an award may exceed fifty percent (50%) if
   1. other assets subject to equitable distribution are insufficient; or
   2. there is difficulty in distributing any asset or any interest in a business, corporation, or profession; or
   3. it is economically desirable for one party to retain an asset or interest that is intact and free from any claim or interference by the other party; or
   4. more than one pension or retirement system or deferred compensation plan or fund is involved, but the benefits award may not exceed fifty percent (50%) of the total benefits of all the plans added together; or
   5. both parties consent. In no event shall an award exceed fifty percent (50%) if a plan prohibits an award in excess of fifty percent (50%).
6. In the event the person receiving the award dies, the unpaid balance, if any, of the award shall pass to the beneficiaries of the recipient by will, if any, or by intestate succession, or by beneficiary designation with the plan consistent with the terms of the plan unless the plan prohibits such designation. In the event the person against whom the award is made dies, the award to the recipient shall remain payable to the extent permitted by the pension or retirement system or deferred compensation plan or fund involved.
7. The court may require distribution of the award by means of a qualified domestic relations order, or as defined in section 414(p) of the Internal Revenue Code of 1986, or by other appropriate order. To facilitate the calculating and payment of distributive awards, the administrator of the system, plan, or fund may be ordered to certify the total contributions, years of service, and pension, retirement, or other deferred compensation benefits payable.
8. This section and G.S. 50-21 shall apply to all pension, retirement, and other deferred compensation plans and funds, including vested and nonvested military pensions eligible under the federal Uniform Services Former Spouses Protection Act, and including funds administered by the State pursuant to Articles 84 through 88 of Chapter 58 and Chapters 120, 127A, 128, 135, 143, 143B, and 147 of the General Statutes, to the extent of a member’s accrued benefit at the date of separation, as determined by the court.

Pursuant to Chapter 50 of the North Carolina General Statutes, a pension or other retirement plan may be distributed as: (a) a lump sum; (b) over a period of time in fixed amounts by agreement; or (c) via a QDRO as a prorated portion of benefits made to the non-participant spouse payable commencing when the participant spouse actually begins to receive benefits.

Both vested and nonvested benefits are subject to distribution.

The full text of Section 50-20.1 of the General Statutes is as follows:

§ 50-20.1. Pension and retirement benefits.

1. The award of vested pension, retirement, or other deferred compensation benefits may be made payable:
   1. As a lump sum by agreement;
   2. Over a period of time in fixed amounts by agreement;
   3. By appropriate domestic relations order as a prorated portion of the benefits made to the designated recipient at the time the party against whom the award is made actually begins to receive the benefits; or
2. By awarding a larger portion of other assets to the party not receiving the benefits and a smaller share of other assets to the party entitled to receive the benefits.
   1. The award of nonvested pension, retirement, or other deferred compensation benefits may be made payable:
   2. As a lump sum by agreement;
   3. Over a period of time in fixed amounts by agreement; or
3. By appropriate domestic relations order as a prorated portion of the benefits made to the designated recipient at the time the party against whom the award is made actually begins to receive the benefits.
4. Notwithstanding the provisions of subsections (a) and (b) of this section, the court shall not require the administrator of the fund or plan involved to make any payments until the party against whom the award is made actually begins to receive the benefits unless the plan permits an earlier distribution.
5. The award shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties), simultaneously with the employment which earned the vested and nonvested pension, retirement, or deferred compensation benefit, to the total amount of time of employment. The award shall be based on the vested and nonvested accrued benefit, as provided by the plan or fund, calculated as of the date of separation, and shall not include contributions, years of service, or compensation which may accrue after the date of separation. The award shall include gains and losses on the prorated portion of the benefit vested at the date of separation.
6. No award shall exceed fifty percent (50%) of the benefits the person against whom the award is made is entitled to receive as vested and nonvested pension, retirement, or other deferred compensation benefits, except that an award may exceed fifty percent (50%) if (i) other assets subject to equitable distribution are insufficient; or (ii) there is difficulty in distributing any asset or any interest in a business, corporation, or profession; or (iii) it is economically desirable for one party to retain an asset or interest that is intact and free from any claim or interference by the other party; or (iv) more than one pension or retirement system or deferred compensation plan or fund is involved, but the benefits award may not exceed fifty percent (50%) of the total benefits of all the plans added together; or (v) both parties consent. In no event shall an award exceed fifty percent (50%) if a plan prohibits an award in excess of fifty percent (50%).
7. In the event the person receiving the award dies, the unpaid balance, if any, of the award shall pass to the beneficiaries of the recipient by will, if any, or by intestate succession, or by beneficiary designation with the plan consistent with the terms of the plan unless the plan prohibits such designation. In the event the person against whom the award is made dies, the award to the recipient shall remain payable to the extent permitted by the pension or retirement system or deferred compensation plan or fund involved.
8. The court may require distribution of the award by means of a qualified domestic relations order, or as defined in section 414(p) of the Internal Revenue Code of 1986, or by other appropriate order. To facilitate the calculating and payment of distributive awards, the administrator of the system, plan, or fund may be ordered to certify the total contributions, years of service, and pension, retirement, or other deferred compensation benefits payable.
9. This section and G.S. 50-21 shall apply to all pension, retirement, and other deferred compensation plans and funds, including vested and nonvested military pensions eligible under the federal Uniform Services Former Spouses Protection Act, and including funds administered by the State pursuant to Articles 84 through 88 of Chapter 58 and Chapters 120, 127A, 128, 135, 143, 143B, and 147 of the General Statutes, to the extent of a member’s accrued benefit at the date of separation, as determined by the court.