SEPARATION AGREEMENTS August 2007 Family Law Group Separation Agreements Where spouses or civil partners decide to separate but do not pursue a divorce immediately, they can enter into a Separation Agreement to record their financial and other arrangements until they can be finalised within divorce or dissolution proceedings. Many are simply not ready to deal with the divorce or dissolution process straight away and a formal agreement can be a good means of settling the financial position in the interim period. What is a separation agreement? ` A separation agreement is a formal agreement to separate and can make provision which includes the following: · maintenance for the benefit of one party and/or their children; · ownership of the family home; and · arrangements for children including where they should live and contact. What is the effect of a separation agreement? The agreement must provide for immediate separation if the parties are not already separated. Parties to a marriage or civil partnership cannot enter into an agreement regarding what would happen if they should separate in the future. Parties who are already separated but want to attempt a reconciliation can reach an agreement was to what would happen if they separate again in the future, however. A separation agreement is a formal legal contract between the parties. Its has advantages in that it can be flexible and meet the specific needs of the family concerned. It can be a means of taking the ‘heat’ out of financial matters until emotions settle. It can also provide evidence of the date of separation. Dickinson Dees LLP www.dickinson-dees.com Tel: 0191 279 9000 Will the court recognise a separation agreement? The primary disadvantage of a separation agreement is that, although it is a contract between the parties, it cannot prevent the court considering the financial position of the parties on divorce or dissolution. The agreement may only be one factor to be considered alongside the other circumstances of the case. Full and final settlement of financial matters between married couples or civil partners can only be achieved by an order of the court. It can, however, be an important factor and a separation agreement should not be entered into without obtaining specialist legal advice on the implications. Generally, the court will not allow parties to resile from agreements entered into with full information and proper advice unless there are unusual circumstances. In deciding whether or not to uphold a separation agreement, the court will have regard to: · the conduct of the parties both leading up to and after the formation of the agreement; · the circumstances of the parties at the time of the agreement and their current circumstances; · whether any party was subject to any undue pressure on entering into the agreement; · whether any party was exploited by the dominance of the other party; · whether one party had inadequate knowledge (for example, as to the financial worth of the other); and · whether both parties had the benefit of legal advice. Advantages of a separation agreement Flexibility The agreement can be drafted to cater for the needs of both spouses. Resolution A successful separation agreement may prove a less costly and time consuming alternative to court proceedings. Disadvantages of a separation agreement Future proceedings Spouses may separate by way of an agreement that makes provision for the payment of a lump sum and maintenance to one spouse. However, if the circumstances of the spouse who is in receipt of payment change for the worse, they may have a second bite of the cherry and apply to the court for further financial provision on divorce or dissolution. Bankruptcy and the family home If the agreement provides for one spouse or civil partner to remain in the family home and the other spouse becomes bankrupt post agreement, the family home may be lost in the bankruptcy proceedings. Dickinson Dees LLP www.dickinson-dees.com Tel: 0191 279 9000 Dickinson Dees LLP is regulated by the Law Society. Authorised and regulated by the Financial Services Authority. Dickinson Dees LLP is a limited liability partnership registered in England & Wales under no OC317661. Registered office and principal place of business: St Ann’s Wharf, 112 Quayside, Newcastle upon Tyne, NE99 1SB, where a list of the members’ names is open to inspection. How do I create a binding separation agreement? Both parties must be certain that they intend to separate and each take independent legal advice. A separation agreement is a form of contract and can be made orally, in writing or by conduct of the parties. It is, however, recommended that a separation agreement be drafted in the form of a deed where the parties signatures are witnessed. There is no general duty to disclose documentary evidence of financial assets or income before entering into a separation agreement, however, ideally financial disclosure of all relevant documentation should be given and these documents should be attached to the agreement. If one party later seeks to change the financial deal reached this will assist the other in resisting this as they will be unable to say they were misled regarding the overall financial position. What additional steps should I take? If you intend to enter into a separation agreement, you should also consider preparing a new will to reflect your change in circumstances. What should I do if I have any more questions? For more information or clarification please contact a member of our Family Law Team who will be happy to help you. They will also quote you a fee to cover their advice and the preparation of the required documentation. Final Note The law is complex and the advice you require will depend on your personal circumstances. These notes are issued for general guidance only. We cannot, therefore, accept any responsibility for actions taken on the basis of these notes alone. Dickinson Dees LLP has offices at the following locations: · St Ann’s Wharf, Quayside, Newcastle upon Tyne · Trinity Gardens, One Trinity Broad Chare, Newcastle upon Tyne · Camden House, Princes’ Wharf, Teesdale, Stockton on Tees · The Chocolate Works, Bishopthorpe Road, York · Gate House, 1 Farringdon Street, London · Associated Office in Brussels, 188a Avenue de Tervuren, 1115, Brussels For more information please contact: Kim Fellowes, Director 0191 2799287 Wayne Lynn, Associate 0191 2799155 Teresa Davidson, Associate 01642 6311744 Dickinson Dees LLP www.dickinson-dees.com Tel: 0191 279 9000 Dickinson Dees LLP is regulated by the Law Society. Authorised and regulated by the Financial Services Authority. Dickinson Dees LLP is a limited liability partnership registered in England & Wales under no OC317661. Registered office and principal place of business: St Ann’s Wharf, 112 Quayside, Newcastle upon Tyne, NE99 1SB, where a list of the members’ names is open to inspection. Dickinson Dees LLP www.dickinson-dees.com Tel: 0191 279 9000 Dickinson Dees LLP is regulated by the Law Society. Authorised and regulated by the Financial Services Authority. Dickinson Dees LLP is a limited liability partnership registered in England & Wales under no OC317661. Registered office and principal place of business: St Ann’s Wharf, 112 Quayside, Newcastle upon Tyne, NE99 1SB, where a list of the members’ names is open to inspection.