THE LEGAL EAGLE
SEPARATION AGREEMENT SURVIVAL GUIDE FOR SOLDIERS AND SPOUSES
INTRODUCTION: As a service to our legal assistance clients, we have prepared this handout with frequently asked questions involving separation agreements. It is, of course, very general in nature since no handout can answer your specific questions. We do ask, however, that you read over these questions and answers carefully in connection with your visit to our legal assistance attorneys so that you may have the fullest information available to help you with your family law problem. Comments, corrections and suggestions regarding this pamphlet should be sent to the address at the end of the last page.
1. Q. WHAT IS A SEPARATION AGREEMENT?
A. A separation agreement is a contract between a husband and wife when they separate from each other in which they resolve such matters as property division, debts, custody and support.
2. Q. I'M SEPARATING FROM MY SPOUSE. DO I HAVE TO HAVE A SEPARATION AGREEMENT?
A. No law requires a separating couple to execute a separation agreement, but it is a wise idea if there are debts, children, support claims or property involved and the parties want to settle these matters in writing with binding and enforceable promises.
3. Q. MY HUSBAND'S IN THE ARMY. I'VE HEARD THAT I NEED A SEPARATION AGREEMENT IF I WANT TO LEAVE MY OVERSEAS QUARTERS AND RETURN TO THE STATES (ALSO KNOWN AS “ADVANCE RETURN OF DEPENDENTS”). IS THAT TRUE?
A. No. All you need for an Advance Return of Dependents is a letter from a professional, such as a lawyer, chaplain, or marriage counselor, to verify your marital difficulties.
4. Q. MY WIFE'S A CIVILIAN. IF I HAVE A SIGNED SEPARATION AGREEMENT AND AN APPROVED REQUEST FOR AN “ADVANCE RETURN,” DOES SHE HAVE TO LEAVE?
A. No. She may lose command sponsorship and be barred from all the facilities here, but a civilian spouse is not required to return to the States if she doesn't want to.
5. Q. WHO PREPARES A SEPARATION AGREEMENT?
A. It is best to have your own attorney prepare it for you. Never try to prepare such a complex and important document yourself. This is a job for a legal assistance attorney or a civilian lawyer, whichever you choose.
6. Q. CAN WE DIVIDE OUR PROPERTY IN A SEPARATION AGREEMENT?
A. Yes. A couple that is separating can agree on a division of property in their separation agreement, and that agreement will be binding on them. The property to be divided consists of real property (land and the buildings on it), tangible personal property (cars, jewelry and furniture, for example) and intangible personal property (such as bank accounts, stocks and bonds, vested pensions and life insurance).
7. Q. DOES MY SPOUSE HAVE TO SIGN A SEPARATION AGREEMENT?
A. No. An "agreement" means that both parties sign voluntarily. You cannot compel your spouse to sign a separation agreement or to agree to the terms that you wish to impose on him or her in the agreement.
8. Q. DOES A SEPARATION AGREEMENT HELP ME TO GET A DIVORCE?
A. There's no way of answering this question without knowing the state or country that's involved. While a separation agreement is not a divorce and doesn't make you “single again,” it can make your divorce faster or easier in some states, and it may have no effect at all on the divorce process in other places. If you'll tell your legal assistance attorney where your home is, as well as that of your spouse, we can check the laws of those jurisdictions to tell you the grounds for divorce and whether a separation agreement would help you to get a divorce there.
9. Q. CAN OUR SEPARATION AGREEMENT SETTLE WHO WILL GET TO CLAIM THE TAX EXEMPTION FOR OUR CHILDREN?
A. Yes. The 1984 Tax Reform Act allows the parties to agree as to who can claim the children as exemptions for income tax purposes. Without a written agreement, the parent who has physical custody of a child for more than half the year will get the dependency exemption. You can also provide for the person who receives the dependency exemption to receive the “child tax credit” allowed by the federal tax laws.
10. Q . WHAT ARE THE FACTORS I SHOULD CONSIDER IN TRANSFERRING THE DEPENDENCY EXEMPTION?
Consider the following issues:
Should the exemption be "traded", instead of given , to the other parent--in exchange for an increase in child support? Even a small increase in support would help offset the tax increase that will be paid by the custodial parent, and the other parent can better afford such an increase due to the taxes he or she saves by claiming the exemption on federal and state tax returns.
Should you alternate the exemption between parents? For example, the father could claim the exemption in even-numbered years (1998, 2000, 2002, and so on) and the mother could do so in odd-numbered years. Or the father could claim one child and the mother could claim the other. Such alternation would lessen the impact of higher taxes on the custodial parent.
Should you condition the transfer on the other parent's regular and full payment of support? Instead of transferring the exemption permanently without regard to the timely payment of child support, some custodial parents agree to transfer of the dependency exemption only if the other parent is current (not in arrears) on child support payments by December 31 of each year. This would be very useful to the custodial parent in getting prompt payment of child support each year (at least by year's end) without hiring an attorney when the other parent “gets a little behind.”
11. Q. CAN I GET MY SPOUSE FOR CONTEMPT OF COURT IF HE BREAKS THE PROMISES IN THE SEPARATION AGREEMENT?
A. No. Contempt of court is the failure to obey a court order without legal justification. It is not contempt of court to violate a separation agreement unless the agreement has been made a part of court order. You may, however, sue your spouse for breach of contract if he violates the separation agreement.
12. Q. WILL A SEPARATION AGREEMENT FREE ME FROM PAYING DEBTS FOR WHICH I HAVE SIGNED ALONG WITH MY SPOUSE?
A. No. A separation agreement is a contract between spouses. It cannot bind third parties (such as banks or finance companies) that have not signed it. If, however, your spouse promises to pay a bill and then breaks that promise, resulting in your having to pay, you can then sue your spouse for breach of contract for the amount of money you had to pay.
13. Q. WILL A SEPARATION AGREEMENT STOP MY SPOUSE FROM HASSLING ME?
A. While separation agreements usually have a non-harassment clause in them, you should understand that no piece of paper - be it agreement or court order--is going to stop a person from doing something he or she wants to do. If the problem is one of physical violence, a court order would be better than a separation agreement and could be used to punish the wrongdoer if he or she violated the order. If there is only an agreement, a lawsuit for breach of contract is one possible remedy for breaking the promise of not bothering each other, but it may not be a very effective remedy.
14. Q. CAN WE DECIDE ABOUT CUSTODY AND CHILD SUPPORT IN A SEPARATION AGREEMENT?
A. Yes, and it would be a good idea to settle these issues between yourselves. Please remember, however, that the courts are not necessarily bound by what you say in your agreement. The terms you include for child support, custody and visitation can always be modified by the court in the best interest of the children. In the absence of proof to the contrary, however, there is a presumption that the agreement's terms concerning the children are fair, reasonable and necessary for the best interest and welfare of the children.
15. Q. CAN THE COURT MODIFY THE TERMS WE INCLUDE IN A SEPARATION AGREEMENT CONCERNING OURSELVES?
A. Unlike the terms concerning children, which are always modifiable by the court, the terms that pertain to adults are harder to change. This depends entirely on the law of the place where the agreement is to be enforced or modified – overseas or stateside. Here is some very general guidance :
If the separation agreement hasn't been incorporated or made a part of a court decree, then it's binding and cannot be charged regarding your “adult promises,” except with the consent of your spouse.
If it's been made a part of a divorce judgment or other court decree, then it may be possible to get it changed by the judge based on a substantial change of circumstances.
The court can overturn a separation agreement if it was signed due to fraud, coercion or lack of mental capacity. In most cases, however, this is a hard case to prove.
16. Q. CAN WE PROVIDE FOR COLLEGE EDUCATION OF OUR CHILDREN IN A SEPARATION AGREEMENT?
A. In most states the judges cannot order you to pay child support for your child in college. But you may make provisions for college in a separation agreement and these will be binding and enforceable; the court can require each of you to perform your promises that are set out in the agreement. Since college is less of a luxury and more of a necessity these days, it would be a good idea to consider whether you want to provide in writing for college expenses in your separation agreement.
17. Q. WHAT POINTS SHOULD WE REMEMBER DECIDING ABOUT COLLEGE EXPENSES?
A. Here are some of that items that a good separation agreement will address:
How long should the obligation last? 4 years? 8 semesters? Until the child attains age 23? Some ending date should be set.
What costs will be covered? The usual ones are room and board, books, tuition and fees. Some parents also agree on a modest monthly allowance for spending money for the child, or for travel to and from home, or for summer expenses.
What are the expenditure limits? Few parents want to agree to finance a college education for a child at any college or university. The cost of some private colleges and universities would bankrupt the average parent. Consider putting a ceiling or "cap" on the college expenses, such as by specifying that the maximum shall be "the then-prevailing rate for in-state tuition at XYZ State University " or some other nearby public institution. Such a provision is fair to everyone and does not force either parent to go broke financing a college education.
What other limits should be set? For example, some agreements state that the child must attend an accredited institution, in pursuit of a generally recognized undergraduate degree, on a full-time basis, while maintaining at least a "C" average.
What part of the college costs will each parent pay? Be sure to set some specific percent or amount so that it will be enforceable in court if you need help in the future. Clauses that provide for the other side to pay “a reasonable share of the child's college expenses” are worthless since they don't say exactly what the other parent has to pay and a judge is not going to guess what the parents meant by this language. When in doubt, spell it out ! Even if you just divide the college costs 50-50 between both parents, it's still better than a vague and unenforceable clause.
18. Q. SHOULD WE PROVIDE FOR ALIMONY IN OUR SEPARATION AGREEMENT?
A. Alimony is spousal support. It is money paid by one spouse to the other to help with food, shelter, transportation, clothing and other living expenses. It is not the same thing as child support. If the two of you have agreed on some measure of temporary or permanent alimony, you should definitely put that in the separation agreement. Such a provision might state, for example, that the husband shall pay the wife alimony of $500.00 per month until either one dies or until she remarries. Or it could state that the wife shall pay the husband alimony of $100 per month for a total of four years, at which time it will terminate forever. These are just examples. Your attorney can advise you about the specifics in your particular case.
19. Q. IS ALIMONY TAX-DEDUCTIBLE?
A. If the agreement is drafted properly, alimony can be deductible for the payor and therefore taxable to the recipient. In order to be deductible by the payor, it must end at the recipient's death. It is also acceptable to make the alimony nontaxable to the recipient if it is nondeductible for the payor. This is a particularly important term and it should be spelled out clearly in the agreement how alimony payments will be treated for tax purposes.
20. Q. WHEN DOES ALIMONY END?
A. Alimony usually ends at the death of either party or the remarriage of the recipient (usually the wife). Sometimes clients have a provision added to the alimony terms in a separation agreement that alimony will also end if the recipient starts living with an unrelated person of the opposite sex on a regular basis as if they were husband and wife.
21. Q. WHAT SHOULD WE DO IF WE HAVE AGREED THAT NO ALIMONY WILL BE PAID ?
A. It is always best to set out such a term clearly in the agreement. Don't just leave it out or let the agreement be silent on this issue. A waiver of alimony is such an important term that it should be clearly spelled out in the agreement so that there is no misunderstanding.
22. Q. HOW DO I KNOW IF I AM ENTITLED TO ALIMONY?
A . Your attorney who prepares the separation agreement will explain alimony (also called spousal support or maintenance) to you. Here is some very general guidance regarding alimony pursuant to state laws:
You cannot demand alimony from the court unless you file a lawsuit requesting it, and this should be done before you get divorced!
You will probably have to prove that you are the dependent spouse -- you are financially dependent on the other party or in need of support from him or her;
Likewise you'll probably have to prove that your spouse is the supporting spouse ; and
In some states, you may have to prove some sort of fault on the part of your spouse (abandonment, adultery, domestic violence, etc.) although this is becoming less and less important as a part of alimony in many states.
An absolute defense to alimony may exist when the parties have waived alimony in a separation agreement or premarital agreement, when a divorce has been granted before an alimony claim is filed, or when only the dependent spouse has committed adultery or some other form of marital fault. Please be sure to see your legal assistance attorney for more information on alimony in your particular case.
23. Q. HOW SHOULD WE DIVIDE OUR PROPERTY IN THE SEPARATION AGREEMENT?
A. In many states there is a presumption that all property acquired during the marriage is equally divisible. This is presumed to be fair. Other divisions, such as 60-40 or 75-25 are certainly legal if the parties agree that the division is fair and reasonable (or if you go to court and the judge finds that an unequal division is justified).
24. Q. WHAT ABOUT PENSIONS AND RETIREMENT BENEFITS - ARE THEY DIVISIBLE?
A. Pensions and retirement rights can also be considered marital property. This type of property is often very valuable. It is an important aspect of equitable distribution. Often a spouse's pension is the most valuable asset of the entire marriage, and this should certainly be considered in doing a separation agreement. If there is to be no division, the agreement should say so. If the decision on pension division is to be put off or deferred because there is no present agreement, that also should be stated clearly. Make sure your agreement is very specific and plain in this area as to your intent on dividing the pension; a poorly worded agreement may be challenged in court as vague and unenforceable.
26. Q. HOW CAN A PENSION BE DIVIDED?
A. The division of pension rights in a separation agreement can be done in two ways: a present-value offset, or a future percentage of payments. The former of these involves calculating the present value of the pension right now and setting it off (or trading it) against the value of another asset, such as the other spouse's pension or the marital residence. The second approach postpones the division until whenever the employed spouse starts receiving pension payments. At this time the other spouse would receive a share of each check equal to one-half (or some other percentage) of the portion acquired during the marriage.
27. Q. DO WE ALSO DIVIDE OUR DEBTS IN THE AGREEMENT?
A. You should set out a schedule for who pays what debt in your separation agreement, including the creditor's name, account number, purpose of the debt, approximate balance and monthly payment amount. This will not stop the creditor from suing both of you if your spouse doesn't make the required payments and both of your names are on the obligation. But it allows you to ask the court to hold your spouse (and not you) accountable for the debt as set out in the agreement.
28. Q. HOW SHOULD WE DIVIDE OUR DEBTS?
A. There is no "right" answer to this question. In one case, the husband may take on payment for all the debts because his is the sole source of income in the family or because he created the debts in the first place. In another case, the wife may take over certain debt payments for things she charged or purchased or for things that she is being given in the property division. For example, if the husband is getting the station wagon and the wife is getting the washer and clothes dryer, it might seem fair that each should assume the debt payment for the items he or she is receiving.
29. Q. I WANT TO MAKE SURE I CAN DATE AFTER WE OUR AGREEMENT IS SIGNED. CAN I HAVE MY ATTORNEY PUT IN A DATING CLAUSE ?
A. There is no such thing as a "dating clause" in separation agreements if the purpose of such a clause is to allow adultery. Any sexual relations with a person who is not your spouse is adultery if it occurs before you are divorced. And no "dating clause" will make legal something that is illegal. Most separation agreements do, however, contain a clause that allows each spouse to be left alone as if single and unmarried, and that forbids each spouse from harassing, molesting or interfering with the other.
30. Q. SHOULD WE ALSO PROVIDE FOR HOW WE FILE FOR TAXES IN THE AGREEMENT?
A. Yes -- this is a very important provision which can save you an your spouse a lot of money in taxes if prepared properly. A good example would be a clause that required the parties to file jointly so long as they are eligible to do so (usually until the year they are divorced) and to divide the refund or liability for taxes in a specified way, such as 50-50, or 75-25, depending on the incomes of the parties.
31. Q. CAN A SINGLE ATTORNEY DO THE SEPARATION AGREEMENT FOR ME AND MY SPOUSE?
A. No single attorney can represent both husband and wife in a separation agreement. It is best to have two attorneys involved, one to advise each partner. In this way, the husband and the wife both know that they have received independent legal advice for their individual situation from a lawyer who does not have a conflict of interest in trying to represent two clients with different goals and needs.
32. Q. IF I HAVE OTHER QUESTIONS ABOUT SEPARATION AGREEMENTS, WHAT SHOULD I DO?
A. Please consult a legal assistance attorney or private attorney of your choice as soon as possible. Your lawyer can answer the many questions about separation agreements and help you to make a fair and intelligent decision about your choices, options and alternatives. Our legal assistance office stands ready, willing and able to help you in these matters. Be sure to bring along with you to the interview a copy of any documents or court papers that might be helpful to your attorney.
* * *
HE LEGAL EAGLE SERIES OF CLIENT HANDOUTS IS PREPARED BY MARK E. SULLIVAN, CHAIR OF THE MILITARY COMMITTEE, ABA FAMILY LAW SECTION AND AUTHOR OF THE MILITARY DIVORCE HANDBOOK (AM. BAR ASSN. 2006). COMMENTS AND SUGGESTIONS SHOULD BE SENT TO HIM AT: 2626 GLENWOOD AVENUE , STE. 195, RALEIGH , N.C. 27608 [919-832-8507]; E-MAIL— MARK.SULLIVAN@NCFAMILYLAW.COM
THE NORTH CAROLINA STATE BAR
217 E. Edenton Street • PO Box 25908 • Raleigh, NC 27611-5908 • 919.828.4620
Copyrightę North Carolina State Bar. All rights reserved. • Website design provided by Sageisland.com