Separation Agreements: What are they and When to Use One?
When you’re separating, a separation agreement can be a good option for many couples to consider. This separation agreement, also called a deed of separation or separation deed, sets out how a couple will divide their assets and responsibilities. It can make for a more amicable separation and provides more legal security than no agreement at all.
A separation agreement is available for both married and unmarried couples. We will look at the difference between married and co-habiting couples below.
In essence a separation agreement is a contract drawn up between two parties to explain their intensions with dividing up property, assets and ongoing finances at the end of their relationship. Read our ultimate guide below to find out more and how they can help with your separation.
When Is a Separation Agreement Needed?
There are many scenarios where it can be beneficial. For example, if you’ve been living with a partner for a while, it is probably the case that you’ve been sharing many things, such as the home you live in, a car, a joint savings account, or more.
You’ve also been sharing responsibilities, such as bill payments, mortgage or rent payments, and parental responsibilities if you have children together. It’s also possible you’ve made plans to share things in the future, su ch as potential income or responsibilities such as the cost of schooling your children.
A separation agreement will formally address what is going to be done about these shared assets and responsibilities, and it will also determine the steps that must be taken in the process, such as selling your property to split the revenue, among other arrangements.
Is a separation legally binding?
In essence, a separation is not a legally binding document. In family law, you need to either have a consent order (for finances on divorce) or a child arrangements order (for parenting on divorce or separation) to have a legally binding document that has been approved or decided by the court. However a separation agreement does invite the court to accept your agreement and, where certain factors we list below are undertaken, they will accept your agreement. In effect, you are more legally protected with the separation agreement than without one, as long as you have had it produced in the correct way.
When You Can Use a Separation Agreement?
Scenario 1: You’re Married and You’re Separating
If you’re married but you don’t want a divorce or are not able to begin the legal proceedings, separating and using a separation agreement is a good option for you because it can work as an alternative to, or as a precursor to, getting a divorce.
In England and Wales, you can’t apply for a divorce unless you’ve been married for at least one year. Even when you can apply for divorce, you still need to prove at least one of the established grounds for divorce, (until the new no-fault divorce law comes into effect). These grounds include:
- Unreasonable behavior
- Partner desertion
- You’ve been living apart for at least 2 years if you’ve agreed on divorcing
- You’ve been living apart for at least 5 years if one of you hasn’t agreed to divorce
If you can’t prove any of these grounds for divorce, a separation agreement will allow you to separate and divide your assets fairly. Another advantage about such an agreement is that it allows for the possibility of reconciliation. Some people do not want to divorce on religious grounds, or are in or nearing retirement and want to remain married to keep certain pension rights or health and insurance benefits. It is a good idea to get a more formal separation agreement in such circumstances if you are remaining married.
However, when reconciliation is not possible and you decide to continue with the divorce, the separation agreement will provide proof of the date of separation and you can use it to show the court your intentions when you separated and later invite them to accept it as a legally binding consent order.
It is important to note, the court can disagree with what you decided in the separation agreement or overturn it entirely because it’s not legally binding under family law. But in most cases, the court will uphold the agreement if it’s deemed fair to everyone, including the children of the marriage, and if nothing has substantially changed since it was issued that would make it inappropriate.
Having access to good legal advice and a solicitor drafted separation agreement will also make it more likely that the court will accept your separation agreement.
Scenario 2: You’re Not Married but You’re Separating
Couples who are not married can also benefit from a separation agreement, to split the assets and responsibilities fairly. For example, if you have a fixed-term tenancy together, the agreement can help you determine how to split the remaining rent you owe.
The separation agreement in such cases forms a contract but it is not legally binding under family law. To enforce it you would have to go through the civil court, rather than family courts.
The separation can lay out how you are going to divide up any joint assets you have and if there are any ongoing future payments agreed, how they will work.
Even when the separation is friendly, it can be important to have a separation agreement. Personal and financial circumstances can change unexpectedly; people move on and find new partners, or their financial requirements change, so it’s a good idea to formalise the separation to prevent any conflict or misunderstanding in the future.
What’s Included in a Separation Agreement?
The first thing that’s outlined in a separation agreement is the relationship background, which includes your names, how long you have been living together, and if there are any children – whether of the relationship or outside of it. The agreement will also include the actual date of separation.
If the agreement is going to be taken seriously the judiciary, it needs to clearly state the basic principles under which it’s being made. You should acknowledge that the document is a reflection of your intentions and there are 3 basic principles that allow the separation agreement to be upheld in court.
- You’re entering the agreement of your own free will. This means no one should be forced or feel pressured to agree to the terms, otherwise, it wouldn’t be an agreement.
- Both parties need to make a full financial disclosure of their assets and responsibilities. This is essential to a fair agreement.
- This is the full and final agreement. Both parties agree that the separation agreement includes everything that’s relevant and they won’t be making any further claims once it’s done.
A separation agreement can also include some clauses that allow for variations in case the circumstances change. These clauses deal with what should be done in the case of death of either party, breach of agreement, re-marriage or co-habitation by either part or other relevant change, such as a change in income.
Lists of Assets and Responsibilities
In the interest of a full financial disclosure, the separation agreement may also include lists and/or schedules detailing every single asset and responsibility. This will include relevant information such as the value of the assets and other details. The lists will be used as references in the sections that are relevant. For co-habiting couples it would usually only show those assets that are jointly owned.
One of the many important factors that are outlined by the separation agreement is what should be done about the property you’ve been sharing together. Sometimes it maybe necessary to sell the home or flat and split the proceeds according to what the agreement states.
Alternatively, one of the parties may pay out the other party so they can have sole possession of the home or flat. Another option is to wait until the children are of age to sell the property. The agreement also determines how the expenses associated with the sale will be split. There are 10 options on how to deal with a property on divorce or separation, which are listed in this blog here.
Personal effects are also outlined in the separation agreement, so it’s determined who keeps what and how much time the parties have to collect those items. The parties also agree to take care of the personal effects until the relevant party can collect them.
Financial assets are addressed by the separation agreement as well and it includes actual and potential assets and businesses. The agreement will determine how much money will have to be transferred so each party can have sole ownership of the assets. When it comes to a business, the leaving party can agree to break from the business and give up all titles, contacts, intellectual property, and more. Pensions are treated differently depending on whether you were married or not. You should take legal advice on what assets are to be counted as part of your divorce or separation.
Both parties have equal responsibility when it comes to paying off joint debts, so you’re equally liable. When couples separate, one party may be able to pay off their debt more easily, so it’s always a good idea to determine how joint debts can be addressed. This can be done in full, in installments, or you can agree to have one party pay more than the other if that’s possible. Any debts between you can also be included here.
The separation agreement can also determine the maintenance payments that one of the parties will receive to provide for any children. The payments can be a lump sum or they can be periodic. A clause can also be included to allow for the inflation of living costs. Child Maintenance payments can be included but the enforcement of these would fall under the Child Maintenance Service.
This section of the separation agreement ensures that the parties involved will do their best to make sure they maintain the best possible relationship with their children. It will also determine the time that each partner will spend with the children. In many cases it is recommended to draft a parenting plan to sit alongside, or as an appendix to your separation agreement
Lump Sum Payment
This section allows the parties to determine if there’s going to be a lump sum payment made to either partner. It will also state the amount, the deadline, and the separation agreement will acknowledge that this will be the final payment.
Provision for Divorce
Finally, the provision for divorce states that both parties agree that the separation agreement is being made as a precursor to divorce. It also states that the agreement will serve as a basis for the divorce settlement. This is only for married couples.
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- Treat your co-parent as you would treat a business partner. ...
- Don't make any significant changes. ...
- Discuss the various options for pathways to an amicable divorce. ...
- Choose your family mediator and/or lawyer. ...
- See a counselor and/or doctor. ...
- Wait to start a new relationship.
- Where you will live. Legally separated spouses must live separately at all times.
- Spousal support. ...
- Custody. ...
- Visitation schedules. ...
- Child support. ...
- Any additional costs for children. ...
- Your home. ...
- Other property.
- Severance pay. Severance pay refers to the cash benefits the company offers after discharging an employee. ...
- Paid time off.
- Benefits. ...
- Stock options. ...
- Transition and outplacement services. ...
- Liability release. ...
- Nondisclosure agreement. ...
To establish the separation each spouse should assume the responsibility for their own personal expenses and chores such as laundry, grocery shopping, and meal preparation. This may include dividing the cost of joint expenses, as well as childcare and pet care responsibilities.What are the 5 stages of separation? ›
- Shock and Denial: In this stage, you may feel numb and struggle to process the reality of the situation. ...
- Pain and Guilt: As the shock wears off, you may feel emotional pain and sadness. ...
- Anger and Bargaining: ...
- Depression: ...
Separating can be like bereavement or any other loss. After the initial shock, you start on a journey which takes you through a cycle of emotions. The stages of this journey typically go from denial through to anger, emptiness, depression and acceptance, until you can start to move on.How do you split finances when separating? ›
- Separate Your Bank Accounts and Credit Cards.
- Separate Your Non-Marital Assets.
- Divide Individual Debt.
- Educate yourself.
- Gather documentation. Keep records.
- Consult a professional. Make it legal.
One of the most significant ways moving out can influence your divorce is when it comes to child custody. If you move out, it means you don't spend as much time with your kids. Not only can this harm your relationship, but it can also damage your custody claims.Is separation good for a troubled marriage? ›
A trial separation can give you and your partner a chance to respect one another's view of your problems—even if you feel that they're wrong or shouldn't feel the way they do. One thing is almost certain. If you and your partner are not willing to compromise, then the relationship isn't likely to improve.What to consider before separating? ›
- 1.) Career & Income. ...
- 2.) Parenting Arrangements. ...
- 3.) Wills & Powers of Attorney (for Personal Care and/or Property) ...
- 4.) Record Keeping. ...
- 5.) Depletion of Assets. ...
- 6.) Leaving the Home. ...
- 7.) Safety Concerns.
The letter should confirm the reason for ending employment, offer useful information about the termination (such as information on unemployment benefits or options for continuing health coverage), set out the reasons for the separation, and provide a statement of company property for the employee to return.What are the liabilities of a separation agreement? ›
Separation Liabilities means all costs, claims and expenses, if any, associated with terminating the employment of any employee of the Company or any Company Subsidiary, who does not accept an Employment Offer.Does separation agreement always lead to divorce? ›
A legal separation does not have to lead to divorce. Couples often use the time to work on their marriage without the thought of divorce and court dates hanging over their heads.How do you create a separation in a marriage? ›
- 1 Sleep in separate rooms.
- 2 Divide up household chores.
- 3 Separate your finances.
- 4 Create a parenting schedule.
- 5 Set boundaries around family time.
- 6 Talk to your children about the arrangement.
- 7 Discuss how you'll handle social situations.
A Separation Declaration is a declaration that the parties to a marriage or de facto relationship have separated.What is a separation of property letter? ›
A Separation Agreement is a document that two people in a marriage use to divide their assets and responsibilities while they are separated.Is a separation agreement required in the state of NC? ›
A separation agreement or other written document is not required to be legally separated in North Carolina. To be considered separated from your spouse, you need to be living in different homes, and at least one of you needs to intend that the separation be permanent.