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We often act for individuals who are contemplating imminent separation or have already separated from their partner. There are a number of circumstances in which parties may seek a separation agreement, including the following:
1. Parties are often married and often have not yet issued an application for divorce but wish to formalise an agreement as to how their finances should be divided in the interim.
2. The parties may have never been married but have children and they wish to formalise arrangements as to the future care for the child.
3. One party may intend stay in the family home after separation, and the other party moves out to other accommodation.
4. Parties may have an income disparity.
5. Parties may have a joint mortgage in both of their names or own multiple properties between them.
When advising clients as to the necessity of a separation agreement in their circumstances, we quickly identify the relevant issues that may need to be addressed within the body of the agreement. We have recently advised clients, where 1 or a combination of the following issues meant they needed a separation agreement :-
Where voluntary maintenance is inconsistent - Financial support was being paid by one party, whether for their children or for the benefit of the other party. Maintenance may be irregular and without structure, leaving the client unable to budget confidently or rely on predictable income.
Mortgage is in joint names – Often parties separate but can decide to continue to hold a property with a mortgage in joint names. This may be because one party is remaining in the home and cannot afford to release the other party from their responsibilities under the mortgage. In this scenario, both parties remain legally responsible to the lender and are exposed to risk if payments default.
Joint credit cards still active – Where parties retain joint credit cards, the client may incur liability for spending that they could not control, increasing the risk of accumulating debt post-separation.
Household costs falling disproportionately on one party - The day-to-day financial burden of maintaining the family home and supporting the children was not being shared proportionately to income.
No written parenting schedule - Contact arrangements were informal and loosely defined. The client may be ostracised from seeing their child, or arrangements may be inconsistent.
Risk of financial drift and imbalance widening - Without early intervention, the economically stronger party can be in a position to build financial resilience while the client depleted savings to maintain stability.
It is important to recognise that separation agreements are not legally binding and may not be upheld if the terms agreed are unfair or do not make adequate provision for a child of the family. For this reason, when advising clients, we are careful to note the other party’s position and how the Court may treat marital finances upon divorce to ensure that the agreement drafted is fair.
When advising clients on the likely position of the other party, we would consider:
Likely goals - such as to avoid court, preserve income flexibility, maintain business stability.
Vulnerabilities - such as joint debt exposure, interim maintenance risk, costs risk.
Likely resistance - reluctance to formalise payments, fear of being “locked in”.
Once key risks are identified, we guide clients through a series of immediate steps designed to stabilise their financial position and prevent further exposure. These actions are practical and proportionate and typically include :-
Confirming responsibility for each liability in writing - by setting out who would service each debt pending a final settlement, we can avoid ambiguity and ensure neither party could later claim they were unaware of their obligations.
Conducting a full income and expenditure review - this allows us to assess the client’s genuine needs and the other party’s ability to contribute, forming the basis for realistic interim and where appropriate, longer term maintenance proposals.
Assessing child maintenance - . where possible, we advise parties to agree a level of maintenance between themselves to ensure that the level provided would meet needs, and the parties are not incurring the costs of formally using the CMS process.
Considering the need for interim spousal maintenance.
Converting informal payments into a standing order - regularising payments ensures predictability and creates a clear record of financial support, reducing the risk of later disputes about what had been paid.
Documenting the mortgage contribution structure - this protects the property from arrears and ensures both parties understand their ongoing responsibilities whilst one party remains in the home.
Record non disposal of assets - both parties can agree not to sell, transfer or diminish significant assets, preventing unilateral financial decisions which could undermine future negotiations.
We act for clients in varying scenarios in which separation agreements would be appropriate or beneficial, for example, we acted for one client where:
The parties had accepted that the relationship had broken down, but neither felt emotionally ready to issue divorce proceedings, making a separation agreement was an appropriate interim compromise.
It did not bring the finality of divorce and allowed both parties to put a structure in place with regards to their financial circumstances.
The possibility of reconciliation was preserved while still addressing the immediate financial and parenting issues.
By avoiding divorce at this stage, the client was able to retain certain practical benefits linked to marriage, such as insurance cover and pension related advantages.
The agreement encouraged co-operation by requiring both parties to engage constructively and agree terms rather than relying on ad hoc arrangements.
It provided essential certainty during the period of separation, particularly around maintenance, mortgage contributions and parenting schedules, which had previously been inconsistent or unclear.
The agreement offered flexibility to include provisions which can be beyond the scope of the court’s jurisdiction at this early stage, such as asset preservation clauses and detailed arrangements for joint liabilities.
Setting out intentions regarding assets provided more protection to the client of unilateral financial decisions and created a clear record should disputes arise later, including where family members or business partners had an interest.
A schedule of financial disclosure ensured transparency and reduced the risk of either party later alleging that information had been withheld at the point of separation.
The agreement clearly allocated responsibility for debts, which was crucial given the joint mortgage and joint credit facilities that remained active.
By resolving immediate issues co-operatively, the agreement helped minimise acrimony and reduced the likelihood of contentious financial proceedings on divorce.
It enabled the parties to agree matters on their own terms, allowing for a more creative and tailored financial plan than would be possible through court intervention.
Finally, it provided a quicker and more cost effective solution than embarking on formal financial remedy proceedings at a time when both parties were still adjusting to the separation.
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