Whilst it’s never easy to think about the prospect of separation at the start of a relationship, it’s becoming increasingly common for couples to seek to protect their individual assets should the worst happen.  

Cohabitation Agreements

If you’re moving in with your partner but not getting married, you may wish to consider a cohabitation agreement to protect both parties’ interests should the relationship break down.

Living together does not give you the same legal rights as a married couple, which can mean added complications in the event of separation. A cohabitation agreement (sometimes known as a living together agreement) will help to clarify what happens to any properties and financial assets such as savings, and endowment policies, and also any debt.  

If you have any children together there will be an entitlement for childcare maintenance, but if you’re not married then neither side can make a claim for maintenance for themselves. With a cohabitation agreement, you can agree to support each other whatever happens.

You should also consider what will happen if one partner dies. Without a marriage certificate, there is no guarantee that the property you reside in will be left to the surviving partner. This can be avoided by having a valid will in place, ensuring both parties’ future interests are protected.

Prenuptial Agreements

With more people getting married later in life and second marriages becoming commonplace, you may have built up significant financial assets that you want to protect should your marriage end.

A prenuptial agreement (or prenup) is an agreement made by a couple before they marry, setting out how they would like their assets to be split should they divorce. After marriage, all of a couple’s assets may become matrimonial assets.

Although it’s not particularly romantic (and currently potentially unenforceable) a prenuptial contract properly drafted by a specialist family solicitor can be persuasive evidence to the court to show how a couple agreed, before they married, to divide their property. This can have a significant impact on the outcome of a divorce case.  

It’s crucial that both parties receive independent legal advice and that a full and frank exchange of financial disclosure takes place. Importantly, the agreement should be fair.

Prenuptial agreements aren’t just for the rich and famous. It’s something you may want to consider if you have substantial business assets, a lot more assets than your future spouse, or if you’re entering into a second marriage and want to safeguard assets for children from an earlier marriage.

Post-nuptial Agreements

Another form of agreement that is becoming increasingly common is a post-nuptial agreement. This can be used to re-enforce the terms of a pre-nuptial agreement. Sometimes, it is used after a separated couple decide they want to give their marriage another go, but both parties want a framework or foundation to ensure everyone knows where they stand, both during the marriage and if things don’t work out.

Separation Agreements

Also known as a separation deed, a separation agreement is a way of formally separating marriage finances and property when a couple are not ready or unable to divorce. Whilst a divorce is the only way to end a marriage and make a legally binding financial settlement, a separation agreement is the next best means of protection.

A Judicial Separation is designed for people whose religious beliefs do not allow them to divorce. The process (and cost) for this is exactly the same as a divorce, but you remain married.  The downside is that it doesn’t allow for orders in respect of pensions, nor does it allow either party to remarry.

Whilst it’s possible to separate, agree and implement a settlement without involving solicitors or the courts, this can leave both parties vulnerable to possible future claims and unable to remarry. In a recent case where no formal financial settlement was made when a couple divorced, the wife made a claim for a divorce settlement twenty-seven years later when the husband became a millionaire.

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Daniel Rushton

Common Questions & Answers

What is a Separation Agreement?

A Separation Agreement tries to end the financial relationship between people who are married or have cohabited. It works as a contract between you and will contain all the terms of the settlement. You both will sign it and confirm that you intend it to end the financial relationship between you.  A Separation Agreement cannot prevent a Court making a different Order if one of the parties applies to Court, but it does change the way the Court would consider an application.

Who should use a separation agreement?

A Separation Agreement can be used by anyone who is married but not yet ready or able to divorce. A Separation Agreement can also be used by a couple who have previously lived together and have now separated.

Is a separation agreement legally enforceable?

No but if you have both had legal advice, and are both fully aware of the other’s financial position, it is likely that a Court will uphold the agreement reached. If one of the parties decides they are not happy with the terms of the agreement and applies to Court asking it to deal with the financial issues, the Court will take the Separation Deed into account, as evidence of what has been agreed. Instead of the Court asking ‘what is fair in the circumstances?’ it will ask the person who wants to escape from the terms of the Separation Deed ‘Why should you be allowed to escape from the agreement?’

A Separation Deed is an attempt to try and end the financial relationship as far as is possible. The Court will not generally allow someone to escape from of an agreement if

  • it is not wholly unfair and;
  • the parties were aware of their legal rights and the financial situation when the agreement was made

It is best if the Separation Agreement has full details of your respective financial positions attached to it, by way of a Schedule. Without this, the Separation Deed is more open to challenge and less likely to be upheld.

Taking legal advice to create a Separation Agreement is always advisable to ensure the agreement is fair and reasonable and will be viewed by the courts as enforceable.

If the marriage separation becomes permanent, does a separation agreement help divorce proceedings?

It can help, as it means there is less chance of there being an issue over the financial issues, but you are best advised to have that agreement made into a court order, so all claims between you are legally  brought to an end.

Our separation is amicable - can we use the same separation agreement solicitor?

It is not essential that you both have a solicitor, but one solicitor cannot represent you both.  They will have to tell the other party to seek independent legal advice and advise that it would be in their best interests to do so.

What does a separation agreement cost?

It depends, peoples financial circumstances vary enormously as do the solutions people decide on. It’s very difficult to give an accurate indication of what a Separation Agreement will cost in each case but an average cost is between £600 and £1000. If you book a fixed fee appointment with us to discuss your separation agreement we will be able to give you a better estimate of cost based on your specific circumstances.

Please get in touch to discuss your relationship agreement needs