Many couples prefer to reach an agreement about financial matters arising out of their separation without involving the Court at all. The way this can be achieved is for the parties to sign a written agreement, which is more informal and records the terms of the separation. A separation agreement is basically a deed that sets out the financial terms of the separation, and other terms that you may wish to include. It can also mention how and when the divorce may be dealt with. Commonly, such agreements will deal with confirmation that the parties to the marriage are to live apart and the manner in which the maintenance (child and spousal) issues are to be dealt with together with property issues. 

Fairness of terms

The risk is that a separation agreement is not a court order and accordingly the court could in the future refuse to make the terms of the agreement into an order, this would be unusual. It is therefore important that both parties have legal advice, that the terms are broadly fair, and that there is financial disclosure from both parties of their income, assets and liabilities to give the agreement the best chance of being upheld in the future. Without such disclosure, it is difficult for legal practitioners to properly advise clients as to the fairness of any terms reached in a financial agreement. Proper financial disclosure can protect both parties and ensure that a fair financial agreement is agreed.

It is therefore important that both parties have legal advice, that the terms are broadly fair, and that there is proper financial disclosure on both sides to give the agreement the best chance of being upheld in the future. This is a reasonable option for people who do not wish to divorce now, for various reasons, albeit you need to be aware of the risks that the terms are not a binding order.

Divorce proceedings

Whilst there are no restrictions on what can or cannot be included in such an agreement, it is important to bear in mind that if either person makes a subsequent financial application to the court in the divorce proceedings, the court is not bound by the financial arrangements in the separation agreement. For example, if either party wins the lottery after the agreement has been signed or the parties’ income positions change, this will mean a significant change in the parties’ financial circumstances. The courts are required to consider the agreement as well as the circumstances of the case.

In summary, the main disadvantages are that a separation agreement is not automatic to enforce, it cannot achieve the same degree of finality as a Court Order and it can only be varied by consent. However, it can be a logical first step in the process without going to Court. 

About the author

Assmiea Hussain Associate

Assmiea is a matrimonial specialist. She advises and represents individuals on divorce, separation, financial settlements, pre-nup and post nuptial agreements and children law.