Separation Agreements

A separation agreement records the financial agreement reached by a couple upon separation. If parties are not agreed on the terms of separation, it is not possible to enter into a separation agreement. Both parties must agree to the terms of the written agreement. This might include:

• Who continues to live in the home?
• Who pays the household bills/mortgage or rent?
• What happens to any savings, financial assets or other tangible joint assets?
• What happens to joint debts, loans or overdrafts?

To ensure that a separation agreement is drafted accurately, each party must be willing to disclose all information about their finances. This is known as ‘financial disclosure’.

It is important that each party receives independent legal advice. Neither party should feel pressured to sign an agreement.

In certain situations, couples are not ready to divorce each other or may have religious reasons for not wishing to terminate their marriage. In these instances, a separation agreement can be used to record and formalise the terms of the separation.

This doesn’t mean that the couple cannot get a divorce at a later stage.

A separation agreement can be legally enforceable provided it is entered into:-

• By way of deed;
• After full financial disclosure has taken place;
• After each party has received independent legal advice; and
• Provided that the terms of the agreement are fair and reasonable.

Separation agreements are commonly used by couples who subsequently divorce after two years’ separation.

If a couple is unable to agree on financial terms on separation, a separation agreement may not be viable and further options would need to be investigated, such as divorce or judicial separation proceedings.

If the couple are not decided on financial separation, it may be appropriate to resolve financial issues by way of Judicial Separation Proceedings (also known as legal separation).

This is a legally recognised separation; however, the couple will remain married. This may be used when a couple does not want to divorce or may wish to divorce in the future, but still want a record of their separation.

This differs from a separation agreement as financial issues can be resolved through the court process. In divorce and judicial separation proceedings, the court has powers to make financial orders.