What is a separation agreement and what are its benefits?


16 September 2020

A separation agreement is a written contract between individuals who are contemplating imminent separation, or who have already separated, and can be used by both married and unmarried couples.

If you and your spouse or civil partner are planning to make your separation permanent, but you do not wish to start any formal process yet such as divorce or dissolution proceedings, or you are unable to do so because you do not meet the legal requirements - for example you have not been married for at least 12 months - then you may wish to enter into a separation agreement to set out your financial arrangements in the meantime.

What should a separation agreement include?

The agreement can include any information relevant to both parties at the end of the relationship, and typically sets out the agreed arrangements during the period of separation. These can include:

  • what will happen to the family home, who will live there and if it will be sold
  • how the mortgage and household bills will be paid and how the equity in the property will be divided
  • how any debts such as loans, overdrafts and credit card bills will be dealt with
  • what happens to any savings, investments, inheritance or other financial assets that have been acquired during the course of the marriage or relationship
  • whether either of you get any maintenance payments and for how long
  • how any personal property will be divided, for example cars or furniture
  • what the arrangements for the children will be, including where they will live, how they will spend their time with both parents and how their financial needs will be met.

What are the advantages of getting a separation agreement?

Drawing up a separation agreement can be a helpful exercise for both parties to undertake as it formally documents the financial arrangements that have been agreed and the steps that need to be taken. This can help to avoid any misunderstandings in the future. Other advantages of a separation agreement include:

  • providing you with the financial stability and time to reflect on whether you wish to formalise your separation by way of divorce proceedings
  • helping to reduce tension, avoid expensive and drawn out court proceedings so that matters may be resolved more efficiently. It can also help speed up the divorce process if arrangements have been agreed in advance
  • It provides clarity on the financial arrangements agreed, as it can be difficult to prove the terms of any verbal agreement reached.

It should be stressed that a separation agreement is not automatically legally binding in the same way that a court order is. However, it is more likely to be upheld by a court if it has been properly entered into. You should ensure that:

  1. each party has received independent legal advice on the agreement prior to entering into it
  2. both parties’ have provided full and frank disclosure of their respective financial circumstances, and the terms of the agreement are largely fair and reasonable
  3. both parties’ circumstances are similar to when the agreement was made.

Often, separation agreements are embodied into a Consent Order once divorce or dissolution proceedings have been issued, which will then make the agreement legally binding.

If you chose not to enter into a separation agreement, then there is the risk that your partner may subsequently renege on any verbal agreement reached, and seek an enhanced settlement.

If you would like to know more about the topics discussed in this article, please do not hesitate to contact a member of the Birketts Family Law team.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at September 2020.