What is a Separation Agreement and do you need one?

 

Main take aways 

1. Separation Agreements are commonly used;

  • when couples are not ready to formalise their separation by getting divorced (for example, the breakdown may be recent, and the couple wish to trial a separation or let the dust settle before taking more formal steps);
  • if the legal requirements to issue divorce proceedings have not been met (for example, the parties have not been married for 3 years and/or the residence requirements have not been met and/or a ground of divorce does not apply);
  • for religious reasons;
  • or for unmarried couples who wish to record the terms of their separation.

 

2. A Separation Agreement is not legally binding in the context of divorce proceedings which means that;

  • neither party can be prevented from applying to the Court for an outcome which is different to the terms of the Separation Agreement; and
  • the Separation Agreement cannot therefore override the Court’s ability to decide how finances should be divided.

 

3. Notwithstanding that a Separation Agreement is not legally binding, if you are not ready or able to issue divorce proceedings, the benefits are;

  • the Court is likely to give weight to a Separation Agreement if it is entered into in the right way and certain safeguards have been met;
  • the likelihood of an entrenched dispute at the time of divorce is reduced;
  • costs are more likely to be contained.

 

4. The safeguards are that;

  • both parties have received legal advice;
  • both parties have disclosed information about their financial circumstances; and
  • the agreement is fair and meets the accommodation and living needs of the parties and most importantly, the children.

 

5. Types of issues covered in a Separation Agreements:

  • when, how and who will issue divorce proceedings in the future;
  • what should happen to any property;
  • how the assets and liabilities should be divided;
  • how outgoings/payments should be met; and
  • children matters (such as how the children will divide their time and financial provision).

 

  1. My marriage has broken down. What are my options?
  2. I am not married but my relationship has broken down.  Can I enter into a Separation Agreement? 
  3. What are the pros and cons of a Separation Agreement? 
  4. Should I get a Separation Agreement? 
  5. Is it better to issue divorce proceedings or enter into a Separation Agreement? 
  6. Is a Separation Agreement legally binding and can it be overturned or ignored by the Court? 
  7. What can I include in my Separation Agreement? 
  8. Do I need a Separation Agreement before I can file for divorce? 
  9. Should I instruct a lawyer to help me with a Separation Agreement?
  10. My spouse is refusing to sign the Separation Agreement – what can I do? 
  11. How much will a Separation Agreement cost? 
  12. How can Confidante help me? 

 

 

1. My marriage has broken down. What are my options?

If you’re married and decide to separate from your spouse, there are broadly 3 options available to you;

  1. do nothing;
  2. enter into a Separation Agreement; or
  3. issue divorce or judicial separation proceedings.

 

  1. Do nothing – the most risky option!

    If there is a delay between the date of separation and issuing divorce proceedings and the assets/income increase in value in the intervening period, there is a risk that you will be disadvantaged as the Court will determine the outcome based on the value of the assets/level of income at the time of divorce (not the separation).

    Here are some practical examples;
    • After separation, your spouse moves out and you continue living in the former matrimonial home (which is held in joint names). You take over the mortgage repayments and carry out some home improvements.

      As the value of the property rises whilst the balance of the mortgage reduces, the equity in the property increases.

      In the event of divorce at a later date, if you wish to remain living in the former matrimonial home, buying out your spouse’s interest is likely to cost more given the increased equity in the property.

      (This is subject of course to the other circumstances of the case.)

    • You inherit or receive a windfall post separation.

      Whilst this would be categorised as ‘non matrimonial’ property, if the case is ‘needs’ based, arguments to ring fence/exclude ‘non matrimonial’ assets are significantly weakened.

      This means that the post separation inheritance/windfall is unlikely to be ignored by the Court when determining the case;

    • You receive a promotion at work together with a healthy pay rise.

      Your higher income will be taken into account which could give rise to increased child maintenance or even a spousal maintenance claim.
  2. Enter into a Separation Agreement – not entirely watertight but better than doing nothing!

    If a couple is not ready or able to get divorced, a Separation Agreement provides an opportunity to record in writing how they wish to move things forward. This gives an element of certainty around their separation and helps parties to move on with their lives before issuing divorce proceedings.

    However, a Separation Agreement is not legally binding in the context of divorce proceedings, therefore it is imperative to ensure that the safeguards have been met (more on this below) which will increase the weight to be applied to it by the Court in divorce proceedings if one of the parties wishes to move away from the terms previously agreed.
  3. Issue divorce or judicial separation proceedings – the least risky option!

    Within the context of divorce proceedings, a final financial Order (whether by agreement or ordered by the Court), creates terms which are final and binding. The risk of those terms changing are significantly reduced. Only in extreme situations will the Orders be varied, for example;
    • one of the parties seeks to vary a spousal maintenance order or deferred lump sum;
    • one of the parties failed to make full and frank disclosure; or
    • there was an unforeseen event after the Order was made.

 

 

2. I am not married but my relationship has broken down. Can I enter into a Separation Agreement?

 

Yes!

It is not uncommon for couples who are unmarried to enter into a Separation Agreement.

The default position for couples who are not married is that sole assets and liabilities remain in that person’s sole name and joint assets and liabilities are split equally (unless there is an agreement specifying an alternative split, such as an Equity Agreement if a property has been purchased).

However, dividing the assets can often be more complicated, for example;

  • one person may wish to buy the other out of the property; and/or
  • one person may be prepared to take on joint debt in return for the transfer of joint assets; and/or
  • the couple may still need to consider arrangements and financial provision for the children.

A Separation Agreement can help a separating couple by specifying precisely how they intend to divide the assets and income, thereby reducing misunderstandings or disputes in the future.

 

 

3. What are the pros and cons of a Separation Agreement?

 

Pros

Cons

A Separation Agreement can take the immediate heat out of a separation as both parties have a roadmap as to how they will manage their separation, finances and the children

 

A Separation Agreement is usually entered into as a temporary position until divorce proceedings are issued at a later date

Parties can decide exactly what they would like to include in the agreement as Separation Agreements are bespoke to each couple

 

A Separation Agreement is not legally binding which means that one or both of the parties may seek to move away from the terms of the Separation Agreement at the time of divorce

 

A Separation Agreement is likely to be upheld by a Court if it is drafted correctly and the safeguards are met

 

The Court can disregard some parts or all of the Separation Agreement depending upon whether and to what extent certain safeguards have been met

 

A Separation Agreement formally records the date of separation (which can be useful if the parties wish to issue divorce proceedings using a separation ground)

Entering into a Separation Agreement may increase costs as rather than progressing through one process the Separation Agreement stage introduces a further step in the process

 

If, at the time of divorce, both parties agree to stand by the terms of the Separation Agreement, the terms can be mirrored in a Consent Order (removing stress and cost around the time of the divorce)

 

It is very important for parties to remember that until they have entered into a Consent Order or the Court has made a decision in divorce proceedings, the parties do not achieve finality and certainty

 

 

 

4. Should I get a Separation Agreement?

Unmarried

If you are unmarried and plan to divide assets and reach agreements in respect of the children as part of your separation, a Separation Agreement is a great idea.

Married

If you are married and not ready or able to issue divorce proceedings, it is wise to enter into a Separation Agreement.

Ensuring that the Separation Agreement is carefully drafted and that the safeguards are met (i.e. that legal advice is received by both parties, details of the finances is shared and both parties’ and the children’s ‘needs’ are properly met) will provide you with an extra layer of protection against further claims being made against you by your spouse in the future.

Furthermore, whilst some separations may be amicable to begin with, circumstances may change and relationships may become strained. A Separation Agreement provides couples with an Agreement which they can look to if things become difficult which is likely to limit disagreements in the future.

At the time of divorce proceedings, if a couple agrees to stand by the terms of the Separation Agreement, the terms can be mirrored in a Consent Order (an agreement within the context of divorce proceedings) which will make the divorce process less stressful and expensive.

 

 

5. Is it better to issue divorce proceedings or enter into a Separation Agreement?

 

If you are sure that the marriage is at an end and the legal requirements to issue divorce proceedings are satisfied, namely;

  • that you have been married for more than 3 years;
  • you and your spouse are domiciled in Jersey or either of you have been habitually resident in Jersey 12 months before you plan to issue proceedings; and
  • a ground of divorce applies;

then there is merit in simply issuing divorce proceedings.

The benefits of issuing divorce proceedings instead of entering into a Separation Agreement are that;

  • you will go through one process instead of two;
  • the costs may be lower (since you are only moving through one process);
  • you will achieve certainty and finality (unless in exceptional circumstances) because an approved Consent Order or determination by the Court will be final and binding; and
  • the entire process may be quicker (as in the alternative you would be entering Agreement and then divorce proceedings at a future point).

 

 

6. Is a Separation Agreement legally binding and can it be overturned or ignored by the Court?


A Separation Agreement is an agreement between a couple which amounts to a contract. However, the Court cannot be ousted from deciding a case in divorce proceedings (if a couple cannot agree between themselves) which means that the terms of the Separation Agreement may be ignored by the Court in part or in full.

That said, if it is written up properly and the various safeguards are met, it will be much more difficult for one party to argue in Court that the terms should not be upheld.

The safeguards are that;

  • both parties should receive legal advice (this will make it much more difficult for either party to argue that they did not understand the terms or impact of entering into the Separation Agreement);
  • both parties should share details of their finances (preventing one of the parties from arguing later that they were not aware of the full circumstances and that, had they been aware, they would not have entered into the agreement (in full or in part)); and
  • both parties’ and the children’s ‘needs’ (accommodation and day to day expenses) are properly met.


If one or more of the safeguards have not been met, there is a risk that the terms of the Separation Agreement may be ignored by the Court.

An unforeseen event which occurs between the date of the Separation Agreement and the divorce proceedings may also give rise to the Court making an Order which is different to the terms of the Separation Agreement (such as ill health or redundancy).

 

 

7. What can I include in my Separation Agreement?

Each case is different and a Separation Agreement will be bespoke to each couple. However, the common topics include:

Divorce

  • the intentions around issuing divorce proceedings at a future date, for example, who will issue those proceedings and when, what ground will be used and who will be responsible for the costs relating to the application;


Finances

  • if there is a property or properties, how much should each party pay towards the mortgage(s), household bills etc;
  • what should happen to any property now and in the future;
  • if a property or properties are due to be sold, how will the proceeds be split;
  • what will happen to joint bank accounts and savings;
  • what will happen to other joint assets or liabilities;
  • how will sole assets and liabilities be treated;
  • how should debts such as loans, credit cards, income tax and overdrafts be met/settled;
  • how should personal property such as cars, household goods and furniture be divided;
  • which parent will claim the child tax allowance; and
  • the payment of any ongoing maintenance for a spouse or children.


Children

  • who will the children live with (which could be both parents);
  • when will the children spend time with the other parent if the arrangement for the children is not shared; and
  • what should happen in the holidays.

 

 

8. Do I need a Separation Agreement before I can file for divorce?

No!

However, a Separation Agreement may be used as a stepping stone to divorce.

If you and your spouse are struggling to come to an agreement, a divorce may be the best option.

 

 

9. Should I instruct a lawyer to help me with a Separation Agreement?


You do not have to take legal advice when putting a Separation Agreement in place but it is highly advisable to do so. Your lawyer will;

  • advise you as to the pros and cons of entering into a Separation Agreement versus issuing divorce proceedings;
  • help to ensure that the safeguards are met which will increase the chances of the Separation Agreement being upheld in Court;
  • advise you as to whether there are any reasons why you should not sign a Separation Agreement;
  • help you to negotiate favourable terms and will consider different eventualities to ensure that the Separation Agreement is as effective as possible; and
  • ensure that you enter into a legal document.

 

 

10. My spouse is refusing to sign the Separation Agreement – what can I do?


If you can’t agree on the terms of a Separation Agreement directly with one another, there are other steps to consider;

  • Mediation is available to couples struggling to agree on any matters including financial or child related issues at any stage of their separation;
  • Engaging lawyers can help couples to overcome points in contention.


If you have exhausted all options and agreement is not possible, divorce proceedings may be appropriate and you should seek legal advice if you find yourself in this position.

 

 

11. How much will a Separation Agreement cost?

At Confidante, we offer fixed fees services.

The actual fee will depend on the specific details of your instruction (for example, if you require assistance negotiating the terms of your Separation Agreement as well as the drafting of it this will be more than instructing us to simply review the terms of a Separation Agreement already drafted by your spouse/partner’s lawyer).

Contact us to discuss your individual needs.

 

 

12. How can Confidante help me?


We are family law experts in Jersey equipped to;

  • advise you as to the best route for you;
  • help you to negotiate the best possible terms for your Separation Agreement;
  • draft your bespoke Separation Agreement;
  • ensure that your Separation Agreement has the best chance of being upheld in Court;
  • help you if you or your spouse/partner is seeking to move away from the terms of a signed Separation Agreement; and/or
  • help you to turn your Separation Agreement into a Consent Order within the context of divorce or dissolution proceedings.


Get in touch if you’d like to find out more.

 

 

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