Separation Agreements if you're considering a divorce or dissolution

Whether unmarried, married or in a civil partnership, a separating couple would be wise to do their best to reach agreement in relation to any of the issues that arise from their separation. 

There are a number of ways that such an agreement can be reached, whether by direct discussions between the couple, Mediation, Solicitor led negotiation, Collaborative law or Arbitration.

What happens if an agreement cannot be reached?

If agreement cannot be reached, then the matter can be resolved through court proceedings.  The type of application that would need to be made to the court would depend upon the issues in dispute and whether the couple are married, unmarried, in a civil partnership or have children with one another. 

Children Act proceedings.  Here we focus upon the financial claims that stem from relationships. 

Married couples and those in a civil partnership

When a couple who are either married or in a civil partnership separate, it is advisable for any financial agreement they reach to be formally recorded in a Court Order.  This is commonly known as a Consent Order. 

The reason for this is that the Consent Order will be legally binding upon them.  Unless the Order makes provision for ongoing spousal maintenance, that Order will affect a clean break of the financial claims that arise between a couple upon divorce or dissolution of their marriage or civil partnership. 

Such a Consent Order can only be approved by the court and become legally binding once a Conditional Order has been granted within the divorce or dissolution proceedings.  For this reason, securing a Consent Order is not possible for those couples who do not wish to divorce or dissolve their civil partnership immediately or for unmarried couples.

Couples who do not wish to divorce or dissolve their relationship immediately

For these couples, although we are likely to see fewer of them now that No Fault divorce and dissolution has been introduced, it is still very important that any financial agreement they reach is formally recorded.  To do so, they will need to enter into a Separation Agreement. 

A Separation Agreement is not legally binding upon the Family Court as a Consent Order would be; it will still be possible, at the time of the divorce or dissolution, for the court to exercise its powers to make such financial orders as it sees fit under The Matrimonial Causes Act 1973 or The Civil Partnership Act 2004. 

The court is only likely to use that discretion where one of the parties is unhappy with the terms of the Separation Agreement, however.  Even then, the Separation Agreement will be very good evidence of the settlement reached between the parties at the time of separation and will be one of the circumstances of the case that the court takes into account within any financial remedy proceedings.  

The court is likely to uphold that Separation Agreement provided the following conditions are met:

1. Both parties entered into the Separation Agreement freely and fully understanding the implications of doing so;

2. Both parties secured or had the opportunity to take independent and separate legal advice upon the Separation Agreement;

3. Both parties provided to the other full and frank disclosure as to their financial circumstances at the time;

4. There has been no significant change in the circumstances of either party which fundamentally undermines the terms of the Separation Agreement and which was unforeseeable at the time it was reached;

5. The terms of the Separation Agreement are fair; and

6. The provision made by the Separation Agreement meets both parties' needs. 

Whilst a Separation Agreement is not as strong or as desirable as a Consent Order would be, it could well be persuasive in any future financial remedy proceedings.  It is certainly far better protection and provides both parties with far more certainty than having no written agreement in place at all. 

It is crucial however that the Separation Agreement is drafted by a specialist family solicitor and that the above conditions are met.

Separation Agreements for unmarried couples

The financial claims that arise between unmarried couples are far more limited than those of married couples or those in a civil partnership. 

Couples with no children

If an unmarried couple have no children, then the claims arising between them on a relationship breakdown are governed by the Trusts of Land and Appointment of Trustees Act 1996 and are usually limited to the ownership of and equity within the family home. 

If agreement can be reached between the couple without the necessity of making an application to the court under the Trusts of Land and Appointment of Trustees Act, is it unlikely to be cost effective for that agreement to be recorded in a Court Order.  Also, because the court does not have the same wide discretion in such cases to make orders against income, savings and pensions, the risk to them in not having a Consent Order in place is far less than it would be for a couple who were married or in a civil partnership.

Provided a Separation Agreement is executed by them as a Deed, they have both taken or had the opportunity to take legal advice upon it, have both entered into it freely and understand the implications of doing so and intending to be legally bound by it, then that Separation Agreement will be legally binding upon them. 

Unmarried couples with children

Whilst unmarried couples who have children do not have claims against one another’s pensions, they can bring a claim against one another under Schedule 1 of the Children Act 1989.   Claims under this Act can also be brought by divorced couples who have already had their financial claims against one another determined at the time of the divorce or dissolution.

For such couples, whilst a Separation Agreement will be very good evidence of the settlement they have reached at the time of separation, it will not preclude the court from exercising its powers under Schedule 1 of the Children Act 1989 in the event that the needs of the children require the Court to do so. 

The court can make orders for property, lump sums and maintenance for the benefit of any children under that Act.  It is therefore important that any Separation Agreement makes provision for current and anticipated future needs of any children, to help avoid any Schedule 1 claim arising in the future.

 

If you are thinking of separating from your partner but either cannot or do not wish to commence a divorce or dissolution proceedings straight away, please contact one of our specialist family solicitors for a free 15 minute consultation.