What is a Separation Agreement?
A Separation Agreement (hereinafter called an “Agreement”) is a written contract made between couples if their relationship breaks down that defines how their joint assets and responsibilities will be divided between them.
You can enter into an Agreement whether you are in a marriage, a civil partnership or in a cohabiting relationship.
You are not legally required to obtain a Separation Agreement, but entering into one will provide you with reassurance and clarity on where you stand. This will enable you to move forward and make key decisions about your own future.
What should I include in an Agreement?
Separation Agreements can include anything you both agree upon and cover a range of areas, including:
- who pays the mortgage or rent, and household bills?
- who continues to live in the family home, and/or what happens if it is sold?
- what happens to any debts – for example, loans or overdrafts?
- what happens to savings, investments, and other financial assets?
- agreements as to any joint business assets.
- what happens to items such as cars or furniture, especially bought jointly?
- whether maintenance is paid to support one of you and/or any children
- childcare arrangements – who any children live with and parental access.
- It can also make provision for there to be a divorce in the future when both parties are ready.
- What should happen in the event of the
- death of either party
- breach of the agreement
- re-marriage or co-habitation by either party
- other significant change of circumstance, for example change in income
- Will the terms of the agreement be reviewed in the future, and when?
Is an Agreement legally binding?
The law as to the status of agreements in England and Wales is the same whether it relates to an before marriage, or an agreement after marriage.
When considering what weight the court will attach to any agreement, the court will take into account:
- Both the husband and wife must enter into the agreement of their own free will, without undue influence or pressure, and informed of its implications;
- Each party should intend that the agreement should be effective;
- Are any of the standard vitiating factors: duress, fraud or misrepresentation, present? Even if the agreement does not have contractual force, those factors will negate any effect the agreement might otherwise have.
- Unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it.
- When the Court considers whether it would be fair to hold the parties to their agreement, it will ensure that the reasonable requirements of any children of the family are not prejudiced by the agreement.
It is worth noting that the court is unlikely to consider an agreement fair – whether negotiated before or after marriage – that sees one party retaining all of the wealth and the other in a predicament of real need.
Why should I make an Agreement?
An Agreement can be used if you and your ex-partner are considering – but haven’t decided – about getting a divorce or dissolving your civil partnership. They work well for couples who wish to take a break from their relationship.
Separation Agreements provide clarity. When emotions run high, as they do when relationships face challenges, it is easy for parties to misunderstand intentions. One party may believe they can remain in the marital home, while the other believes they agreed to list it for sale. Having these issues written down makes it much easier for couples to remain on the same page and avoid unnecessary conflicts.
A separation can be reversed whereas a divorce cannot.
You can also use one if you are not able to divorce or dissolve your civil partnership because you have been together for less than one year.
An Agreement can also be used where you do not wish to divorce for religious reasons.
What are the advantages and disadvantages of Separation Agreements?
The advantages are:
- It gives you time to think before taking the important decision to divorce.
- It provides clarity on the financial arrangements agreed, as it can be difficult to prove the terms of any verbal agreement reached.
- You agree that you do not have to live together.
- It shows that you both consider the relationship to have ended or is ending, and the date it ended.
- An Agreement can make separation easier for children as you are choosing to agree arrangements between yourselves rather than have legal battles.
- Saving of legal fees.
- It is flexible – you can decide what you would like to include.
- If you stick to an agreement, the agreement can remove the conflict out of the breakdown of the relationship as the both of you know where you stand emotionally and financially.
- A Separation Agreement offers a degree of clarity and legal protection as it is a contract.
- It makes any subsequent divorce proceedings easier as arrangements have been agreed in advance.
- Although they are not legally binding in the same way as a Consent Order, the court will uphold a Separation Agreement if it was properly and fairly negotiated.
- The other significant advantages of post-separation agreements for high net worth individuals are that they are usually negotiated in private – outside of the public eye.
The disadvantages are:
- Both parties must agree the terms.
- It can only be changed if both of you agree to the changes.
- A Uk Divorce Law may disregard some or all of it if you go on to divorce or dissolve your civil partnership – it is not the final word.
Is there anything we can do to make an agreement stronger?
To help make sure an Agreement isn’t challenged or disregarded by a Court, it is important that you and your ex-partner are fully open about your finances. This is called ‘financial disclosure’.
That way, each of you will know what the other person has in:
- debts
- savings
- property
Courts are less likely to overturn Agreements that have been entered with financial disclosure and where the agreement was properly and fairly negotiated.
How do you end an Agreement?
You can simply end the agreement voluntarily by consent. Similarly, any changes to an agreement will require the consent of both parties.
Can an Agreement be used in a divorce?
The terms of the Agreement can be incorporated into a Consent Order within the divorce proceedings. A Consent Order is a legally binding document approved by the Court which formally deals with your financial arrangements and ends the possibility of future financial claims.
