Separation Agreements

What is a Separation agreement?

When your relationship breaks down, and the dust has freshly settled, you will likely be considering how to divide relationship property.  The process for effecting division of relationships property typically involves the negotiation and execution of a separation agreement.

A separation agreement is a legally binding document negotiated between two parties who have decided to end their marriage or relationship. Under section 21A of the Property (Relationships) Act 1976 (“Act”), spouses or partners can settle their differences concerning the division of property by written agreement. The Act also provides that, in order for a separation agreement to be legally binding:

  • The agreement must be in writing and signed by both parties;

  • Each party to the agreement must have independent legal advice before signing the agreement;

  • The signature of each party to the agreement must be witnessed by a lawyer; and

  • The lawyer who witnesses the signature of a party must certify that, before that party signed the agreement, the lawyer explained to that party the effect and implications of the agreement.

Why use a Separation agreement?

The main purpose of Separation agreement is to ensure the division of relationship property is legally enforceable. However, before executing an agreement, each party must first understand their respective entitlements to share in those assets that comprise the pool of relationship property. 

Despite popular misconception, relationship property will not always consist of everything each party ever owned or received by way of gift. Likewise, the presumption that each spouse or partner is entitled to share equally in the assets of the relationship is subject to a number of exceptions. For instance, the status of your relationship as one of short duration (generally where the parties have been living together for less than three years) will often mean that a person’s entitlement to share in the relationship property is to be determined in accordance with the contribution of that party to the relationship.

The term “contribution” is broad and includes matters such as:

  • the care of any child of the relationship;

  • management of the household;

  • earning of income;

  • the giving of assistance or support to your partner; and

  • the payment of money to maintain or increase the value of the relationship property.

In the above context, quantifying a person’s “contribution” for the purposes of determining how best to fairly divide relationship assets is a process best undertaken with the support of your lawyer.

In addition to the what’s included within a separation agreement, there are other benefits that make separation agreements a worthwhile arrangement: 

  • Control: where the court is involved in the breakdown of a relationship, a judge will typically make determinations as to terms of a couple’s separation. However, separation agreements allow the parties to maintain control over their separation. Being able to negotiate the terms of your separation tends to allow parties to come to a mutually agreeable solution.

  • Flexibility: we know relationships are about compromise, giving up one thing in favour of another. The same goes for separation agreements, as they are tailored to the parties’ specific needs and circumstances. Parties can achieve creative and flexible outcomes that are tailored to their needs especially when there are many variables in the relationship - think blended families with shared custody arrangements, or high-net-worth couples.

  • Cost & Time: entering into a separation can fast track any difficult discussions by encouraging constructive negotiation between parties.

  • Privacy: matters that are resolved via the courts are typically matters of public record, which can be uncomfortable for parties. Separation agreements can be kept private between the parties and their legal representatives.

  • Prevent Future Conflict: by clarifying your rights and obligations out the outset in accordance with the Property (Relationships) Act 1987, you have a written record of what you both agreed to.

Separations may not necessarily be the correct solution for everyone. If you are simply unable to reach agreement with your former spouse, recourse to the courts may be more beneficial. 

But, for parties who are able to work together to negotiate the terms of their separation, separation agreements can be a useful tool for dividing relationship property and maintaining an amicable relationship with your ex-spouse or partner.

Check out our new Separation Calculator to learn more about the value of your share in relationship property by clicking here. 

In our previous blog we discuss the benefits of entering into a Contracting Out Agreement to help mitigate some of the issues spouses run into in the event of separation.

Should you have any questions in relation to the content of this blog, let us know. Goodwill Law prioritizes it clients needs, we are happy to help, and also offer free upfront consultations, and advertised fees.

Will Downey