Separation Agreements Instead Of Divorce Or Dissolution

Issue 33

Sarah Crilly in the Family Law team at Ward Hadaway explains what a Separation Agreement is and looks at some of the benefits of entering into one.

Separating couples may often be advised to enter into a Separation Agreement (sometimes referred to as a Deed of Separation) if they haven’t yet decided whether to divorce or dissolve their civil partnership.

What is a Separation Agreement?

A Separation Agreement is a written agreement entered into by a separating couple (they can be married or unmarried) to set out the financial terms of their separation and how their assets are to be divided.

It can cover areas including who pays the mortgage, rent and household bills, what happens to any debts, such as loans or overdrafts and what happens to investments, savings and other financial assets.

The advantages are that it can provide reassurance to individuals who have come to an agreement on an amicable basis.

By entering into a Separation Agreement, both parties can limit the scope for costly and emotionally draining litigation.

For anyone who has not been married for 12 months and cannot divorce straight away, or for those who wish to divorce on the fact of two years separation with consent or five years separation, it can be an appropriate option to document a financial agreement before actually issuing divorce proceedings.

There may be a religious reason why a couple does not wish to divorce and entering into a Separation Agreement will enable them to put a financial agreement in place without divorcing.

Despite a Separation Agreement being entered into, the parties will remain married and there is therefore scope for a future reconciliation if the parties wish.

A Separation Agreement can be more flexible (than a court order) and it can make provision for matters that the Court is unable to deal with, for example with pets.

It can provide certainty for parties wishing to protect their wealth on separation. For example, one party may wish to preserve monies inherited from a member of their family; Or a party with assets owned prior to the marriage or commencement of their relationship may wish to ring-fence and preserve that asset.

There may be property handed down from generation to generation that one party may wish to protect for themselves. If one party is involved in a family business they may wish to protect their interest in it.

Legal Advice

Technically Separation Agreements are not automatically enforceable by the Court and do not prevent one party making a financial claim against the other in divorce proceedings issued at a later date.

However, they have been upheld by the Courts and it is therefore important when contemplating entering into such an Agreement that both parties obtain independent legal advice from a solicitor and that there is a full and frank exchange of financial information by both parties during the process.

You don’t need to take legal advice when you write a separation agreement, but it’s a good idea to do so because if there are any reasons why you should not sign the agreement, these can be flagged.

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