Separation agreements are a flexible way for couples to begin to separate their assets if their divorce or dissolution is not going to take place straight away.
What is a Separation Agreement?
A Deed of Separation, also known as a Separation Agreement, is an agreement between a divorcing or separating couple in the form of a legal contract. The purpose of the agreement is to establish the financial arrangements following the separation or divorce.
When is a separation agreement appropriate?
A separation agreement can be used by married or unmarried couples. The agreement will be used to outline how the couple wishes to divide their financial assets such as property, household bills and other responsibilities on separation. This agreement is a good way to ensure the couple establish clear terms in relation to their separation and can be used where there is a delay in obtaining a divorce or dissolution.
It is important to note that for married couples, or those in a civil partnership, it is advisable for the separation agreement to be replaced with a financial consent order upon divorce or dissolution of a civil partnership. This consent order will prohibit any future financial claims either spouse or civil partner can make i.e. provide a legal clean break and gives the court the power to enforce any breach of the order. Furthermore, a division of pensions, known as a pension sharing order on divorce/ dissolution can only be dealt with following receipt of a court order.
What’s included in a separation agreement?
The separation agreement will start by outlining the relationship background which should include, as a minimum: -
- The names of both parties.
- The duration of the relationship and how long they have co-habited.
- Details of any children.
- Date of separation.
The separation agreement will usually include specific clauses that allow for variations if circumstances change. These clauses determine what should happen in the case of re-marriage or co-habitation, death, breach or any other relevant change. However, these clauses will depend on whether the couple is married or not.
Separation agreements for married couples or couples in a civil partnership
Those couples who are married or in a civil partnership often use a separation agreement to establish an interim agreement prior to divorce or dissolution. This is helpful as there may be reasons why a couple do not want to divorce immediately. For example, there may be a preference to wait a few months for personal reasons but perhaps they wish to transfer a property immediately to take advantage of tax benefits that can arise during the year of separation. As stated above it is strongly advisable for any couple who are divorcing or dissolving a civil partnership to subsequently also ensure they have a legally binding court order to achieve a legal separation and clean break order.
Although a judge on divorce is not legally obliged to adhere to the terms of a separation agreement, a Judge is likely to uphold the agreement in court if the below formalities can be satisfied: -
- Both parties provide full and frank financial disclosure of their assets and responsibilities.
- Both parties are in full and final agreement.
- Both parties have entered into the agreement by their own free will.
It is also important that both parties have taken independent legal advice so they understand the terms of the agreement.
The common clauses in these cases would include:-
-
Lists of assets and responsibilities
This clause will include lists or schedules outgoings detailing every financial asset and responsibility. It can also include the value of the assets.
This clause concerns jointly owned property assets. The agreement could make provision for a sale of the property and how the proceeds are divided. Another option could be that one party ‘buys out’ the other so they can have sole ownership of the property. The costs of sale will also be provided for in the agreement, whether they be shared equally or one party pays the full costs.
This clause will include all financial assets such as actual and potential assets and any businesses. The agreement will need to outline whether any of these assets are to be sold or transferred. For married couples or civil partners, the agreement will also consider pensions and whether they are to be shared upon separation.
This clause will outline the personal assets of each party and who will keep each item and how long they have to collect them.
This clause can outline how joint debts are to be addressed, for example one party may be willing to pay off a joint debt in full or the parties may agree to split these equally.
This clause will address any maintenance payments that one party will pay to the other to provide for themselves or any children going forward. These payments can in a lump sum or periodic. Whilst Child Maintenance payments can be included, the enforcement of these would fall under the Child Maintenance Service and follow a set formula depending on income.
Provisions for any children can be outlined in the separation agreement which will detail that both ensure they maintain the best possible relationship with their children. Child arrangements can also be detailed as an appendix to the agreement along with a draft parenting plan. It is important to note that these arrangements are not legal binding as this will require a Child Arrangements Order from the court.
This clause makes provision for parties to determine if a lump sum payment applies. It will need to determine the amount, deadline, and will need to acknowledge that this will be the full and final payment.
For married couples or civil partners, there will be a provision for divorce which states that the agreement is made as a precursor to divorce and the terms within the agreement will be a basis for the financial settlement following the divorce.
There may also be reference to certain things that might happen once divorce proceedings are underway e.g. applying to court for a financial order or obtaining a pension share.
Separation agreements for unmarried couples
Unlike married couples, cohabitating couples are offered less legal protection when they separate. Therefore, drawing up a separation agreement can be a good way of setting out how any financial matters are to be dealt with following separation. This can reduce the risk of any financial disputes on separation.
The common clauses in these cases would include:-
-
Lists of assets and responsibilities
This clause will deal with jointly owned assets only and how these are to be divided or dealt with.
This clause concerns jointly owned property assets. The agreement could make provision for a sale of the property and how the proceeds are divided. Another option could be that one party ‘buys out’ the other so they can have sole ownership of the property. The costs of sale will also be provided for in the agreement, whether they be shared equally or one party pays the full costs.
This clause will include all jointly owned financial assets only such as actual and potential assets and any businesses. The agreement will need to outline whether any of these assets are to be sold or transferred.
This clause will outline the personal assets of each party and who will keep each item and how long they have to collect them.
This clause can outline how joint debts are to be addressed, for example one party may be willing to pay off a joint debt in full or the parties may agree to split these equally.
Provisions for any children can be outlined in the separation agreement which will detail that both ensure they maintain the best possible relationship with their children. Child arrangements can also be detailed as an appendix to the agreement along with a draft parenting plan. It is important to note that these arrangements are not legally binding as this will require a Child Arrangements Order from the court.
How can I enforce a separation agreement?
For married couples or those in a civil partnership, a separation agreement would usually be enforced through the family courts by applying for a financial order, using the prescribed Form A. However, specialist legal advice is required as to the best method of enforcement in your circumstances.
For unmarried couples, a separation agreement can be enforced through the civil court by applying to enforce the order.
Can I include child arrangements within the agreement?
Child arrangements can be included within the separation agreement as an appendix, but they are not legally binding. To obtain a legally binding agreement in relation to any children of the family, either party will need to apply to the family court for a child arrangements order. This is done by completing a Form C100. This order can be done by consent if both parents agree.
Pros and Cons of a separation agreement
Pros
- It’s flexible – it is down to a couple what is included and agreed.
- It shows both parties mutually agree the relationship has ended and the date it ended.
- It provides both parties with certainty and clarity.
- It allows a couple to begin to separate their assets even if a divorce/ dissolution isn’t contemplated immediately.
- It can reduce the risk of any disputes and stress at a later date if the couple decide to separate.
- Although they are not legally binding, the court will likely uphold the agreement if all the formalities have been satisfied and it can be show that there was fair negotiation and agreement.
Cons
- If you are married, certain clauses may not be automatically upheld by the court upon divorce/ dissolution.
- If you plan to divorce/ dissolve your civil partnership in the future, sometimes a separation agreement may not be necessary and entering into a separation agreement may unnecessarily increase costs. A specialist family lawyer can advise you whether a separation agreement is advisable in your case.
- Separation agreements require consent and agreement. If there is a dispute regarding the arrangements following separation you cannot force someone to enter into an agreement.
For further advice about separation agreements for married couples, couples in a civil partnership or unmarried couples please speak to Amy Harris or Charlotte Brookes.
