The difference between divorce and separation agreements

When divorce proceedings are commenced, the court has power to make a financial order which directs what is to happen to the matrimonial assets. The court order is binding and enforceable if necessary.

Before divorce proceedings are commenced, all financial claims between you and your spouse remain open and either party may make a claim on the capital assets (including property) income and pensions belonging to the other party at any time. This remains the case even if you are divorced and no financial order has been made by the court.

Consequently there is no certainty and finality in respect of financial arrangements until such time as the court seals a financial order.

If you do not wish to take divorce proceedings at this time but have agreed with your spouse what is to happen to the matrimonial assets, it is possible to enter into a separation deed.

A separation deed will record the terms of an agreement at the date of separation. Whilst it is still possible for the Court on its discretion to alter the terms of a separation agreement, if properly prepared it will generally be binding upon the parties.

If or when one party makes an application to the court for financial relief following divorce proceedings, the Court has a duty to consider all the circumstances of the case as they may then be. The Court must consider a number of statutory factors and any change in circumstances since the date of the Separation Agreement.

The statutory factors the court must consider, are as follows:-

a)       The Income Earning Capacity Property and other financial resources which each of you has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which would be in the opinion of the Court reasonable to expect a person to take steps to acquire.

b)       The financial needs, obligations and responsibilities, which each party has or is likely to have in the foreseeable future.

c)        The standard of living enjoyed by the family before the breakdown of the marriage.

d)       The ages of each of you and the duration of the marriage

e)       Any physical or mental disability of either of you.

f)        The contributions which either of you has made or is likely to make in the foreseeable future of the welfare of the family including any contribution by looking after the home or caring for the family.

g)       The conduct of each party if that conduct is such that it would be in the opinion of the Court inequitable to disregard it.

h)       The value to each spouse of any benefit which one spouse because of the divorce will lose the chance of acquiring (most usually pension provision).

If circumstances warrant, the Court can alter the terms of the Separation Agreement. Therefore, separation agreements cannot achieve the same degree of finality as a court order.

The separation agreement will however be as watertight as possible provided both parties have taken independent legal advice prior to signing the deed and have fully disclosed their finances and any other relevant circumstances.

Failure to disclose any relevant information may result in the agreement being set aside by the other party or overturned by a court.

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