Separation agreements

What is a Separation Agreement?   

A separation agreement is a contact that a couple can use when they are looking to separate or have previously separated. These agreements typically set out what will happen in relation to: 

• The division of finances 

• Arrangements for any children 

• What will happen in relation to property, such as the family home 

However, you do not need to be married or in a civil partnership to enter into a separation agreement. Indeed, cohabiting couples may also wish to enter into a separation agreement.  

It is worth noting that a separation agreement contemplates imminent separation. Therefore, they are very different to a prenuptial or postnuptial agreement, which typically does not and are devised while the relationships is continuing. 

There is no expiration date for a separation agreement, and they can be left to run forever, however it is worth bearing in mind that circumstances are likely to change over many years. If you are married and do not divorce this can also have an impact on what is regarded as marital wealth.  

Why do you need a separation agreement? 

During a relationship, a couple will make decisions about many aspects of their joint lives, including in relation to: 

• Their finances 

• Their children 

• Decisions in relation to the future, either financial or in relation to things such as schooling for their children 

If the marriage breaks down, these issues do not disappear, and it is really important for a couple to understand their rights and responsibilities and what they need to do moving forward. A separation agreement can be a helpful tool in helping couples to determine how these issues will be resolved. 

Are separation agreements binding?  

Technically, a separation agreement is not legally binding since it is not a court order. However, it is a contract and can be challenged in court for this reason. It is possible to make a separation order legally binding by having it changed into a consent order during the divorce process with the help of a lawyer.  

A separation agreement is likely to be taken seriously by the court if the three basic principles are followed: 

• The parties enter the agreement voluntarily having taken independent legal advice  

• There is full and frank financial disclosure of all assets and responsibilities 

• It is a full and final agreement that is fair and reasonable 

For the separation agreement to be upheld as part of divorce proceedings, it is necessary that the parties’ circumstances have not changed drastically since the agreement was made. It is possible for a separation agreement to include a clause that allows the contract to be varied if the parties’ situation changes.  

The care for any children can be covered in a separation agreement but again it is important to note that the agreement is not legally binding. A child arrangement order is necessary if the parties would like a legally binding order. 

What issues does a separation agreement cover? 

The agreement will set out the factual details in relation to the parties as well as their relationship and whether there are any children. The issues that an agreement will cover include: 

• A list of all assets for full and frank disclosure. This will also include any joint debts 

• Details of living arrangements including what will happen to the family home 

• Parental rights and responsibilities for any relevant children 

• Whether one party is going to pay maintenance payments or a lump sum payment 

• If the couple if married, then it can discuss that the agreement is a precursor to divorce 

• Issues such the care and provision for any family pets can also go into this agreement  

Advantages of a separation agreement 

There are advantages to a separation agreement, often as a precursor to divorce, so long as the parties understand their legal standing and the fact that situations can change, which would impact the agreement: 

• Reconciliation: the agreement does not formally end a marriage and allows for potential reconciliation as the marriage still exists 

• Reluctance to divorce: some couples may not want to divorce. A separation agreement may therefore be an appropriate compromise. Likewise, it may act as a helpful first step for a couple who are not yet emotionally ready for a divorce. 

• Benefits: benefits are affected by divorce, including medical insurance, life insurance and pensions, but these may continue if the parties have only separated  

• Cooperation: couples must cooperate and agree, which sets a good precedent for their future relationship 

• Flexibility: separation agreements can be more flexible than court orders, dealing with issues that would otherwise be outside of the jurisdiction of the court, like pets.