What is a Separation Agreement and when would you use it?
A Separation Agreement allows a couple to document and sort out their financial situation at the time that they agree to go their separate ways. The Agreement allows them to record who is to have what and hopefully avoid the necessity of expensive and lengthy court proceedings further down the line. It is especially suitable if the couple in question doesn’t want to get divorced or do not have the requisite grounds straight away and choose to be separated for two years before applying for their divorce.
A separation agreement must be voluntary. No law or regulation requires a separating couple to execute a separation agreement.
Until 2010 the perceived wisdom was that separation agreements were a solid piece of evidence that should be held as binding, providing certain rules were adhered to and the document has been drafted by a lawyer. These are surmised as follows:
- The terms of the Agreement must be fair to both parties.
- Both parties provide full & frank disclosure annexed to the back of the Agreement, as a Schedule.
- There can be no undue pressure from one party upon the other to sign the Agreement.
- Both parties need to agree the terms of the Separation Agreement and sign it.
- Both parties have taken independent legal advice.
If the correct procedures are not followed then the Agreement risks not being a binding document.
From 2010 onwards the issue of the legal enforcement of separation agreements evolved further on the back of a landmark Supreme Court decision in London. This addressed whether a pre-nuptial agreement was legally binding (Radmacher v Granatino [2010] UKSC 42). The heiress involved in the case successfully argued that the pre-nuptial agreement signed before they were married was binding.
Even though the case involved a German heiress and her French husband, the outcome is seen as an attempt by the Courts of England and Wales to clarify their position on the enforce-ability of agreements. The case of T- v- T [2013], which is outlined below, has gone someway further in confirming that the courts will view Separation Agreements as legally binding in the majority of cases.
The case of T -v- T [2013] concerned a separation agreement executed by a divorced couple some 20 years earlier. In the intervening years both parties moved on with their lives. The husband remarried and had three children from that relationship and the wife had a son by a new relationship. Furthermore, the husband had become very successful. The wife sought to say the agreement should be ignored 22 years later as a final consent order had not been entered into at the end of the divorce and that she should be able to apply for financial provision from the husband.
The court disagreed and made an order that the Separation Agreement should be made an order of the court. The case provides helpful guidance as to the approach that should be taken when considering a Separation Agreement in accordance with s25 Matrimonial Causes Act 1973 (MCA 1973).
For those considering a Separation Agreement (or a pre-nuptial agreement, even) at the current time, the recent legal cases should cause them to pause and consider what exactly is being entered into and what the worth of the agreement is as a legal document?
Basically, as with any legal document, don’t sign unless you understand what it is you are agreeing to and ensure you have taken proper professional advice on it. Expect any document, drafted by a lawyer, you sign to be legally binding. It would appear that as long as a separation agreement is properly drawn up, it should be legally binding and for the individual seeking the protection they offer, they appear to be definitely worth having.
