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.
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%.
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.
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.
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.
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