Should I sign a separation agreement?

The question “should I sign a separation agreement?” is one that the best London divorce solicitors are asked a lot. That is because when a couple split up there focus is often on sorting out what to do about the family home and the savings account rather than rushing to start divorce proceedings.

There are many common misconceptions about separation agreements such as:

• A separation agreement is the same as a financial court order;
• A separation agreement cannot be changed;
• You do not need legal advice before you sign a separation agreement;
• You do not need to tell your spouse about your assets before you sign a separation agreement;
• If you have pensions, you can agree to share your pensions and implement the pension sharing.

As signing a separation agreement may commit you to a financial settlement it is important to get legal advice from top London divorce solicitors before you sign the separation agreement.

How can OTS Solicitors help?

At OTS Solicitors, our goal is simple; to understand your family law needs, provide the family law legal advice you need and to guide you through your options so you can make informed family law decisions that are right for you and your family, such as whether or not to sign a separation agreement.

For caring and compassionate family law advice on UK divorce and family law, contact OTS solicitors today on 0203 959 9123 for an informal chat to see how London based family law team at OTS Solicitors can help you.

Should I sign a separation agreement?

The answer to whether you should sign a separation agreement or not is “maybe”. The best London divorce solicitors know that is a very frustrating answer to receive. However, top London divorce solicitors will tell you that it is impossible to give an accurate yes or no answer without knowing more about your personal and financial circumstances.

For example, if a couple have talked about starting divorce proceedings or the divorce proceedings are even underway there may be little merit in signing a separation agreement. That is because if you have reached a financial settlement then the financial settlement can be converted into a financial court order after your decree nisi of divorce has been pronounced.

On the other hand, if you and your spouse have decide to wait before getting divorced, for example for religious or family reasons, signing a separation agreement may be a good idea. That is of course subject to the contents of the separation agreement.

Pensions and separation agreements

The top London divorce solicitors will tell you that if you are of retirement age when you decide to separate the option of signing a separation agreement may not be a good idea. That is because if two spouses reach a financial settlement that includes one spouse sharing their pension with the other spouse you need a court order to implement the sharing of the pension.

The limitations of a separation agreement may not be a problem to a younger couple who are not planning on retirement soon. That is because they can convert their separation agreement into an agreed financial court order later. However, if you are planning to retire and live off the pension or the pension is already in payment a separation agreement may well not be a good idea. That is because the spouse receiving the pension share will not be able to get an income from the pension until divorce proceedings are started, an agreed financial court order is made, and the pension administrator then implements the pension sharing order. That can mean a wait of nearly of a year to get your agreed pension income.

Some London divorce solicitors may tell you that signing a separation agreement is not a problem if you want to share a pension because a couple can agree that a husband or wife can receive spousal maintenance until the pension sharing order can be implemented. However, the best London divorce solicitors will advise against the option of a separation agreement and spousal maintenance.

Why? Top London divorce solicitors are always wary of a spouse agreeing to get spousal maintenance until a pension share can be implemented because:

• Spousal maintenance automatically stops  on the death of the paying spouse whereas if a pension sharing order is made the share of the pension becomes the pension of the husband or wife as soon as the pension administrator implements the financial court order;
• Spousal maintenance automatically stops if the spouse who is getting spousal maintenance remarries whereas if a pension sharing order is made the share of the pension becomes the pension of the husband or wife as soon as the pension administrator implements the financial court order. Therefore if the pension is shared it belongs to the spouse who received it whenever or not they remarry;
• Spousal maintenance payments can be varied by court order whereas if a pension sharing order is made the share of the pension becomes the pension of the husband or wife as soon as the pension administrator implements the financial court order. The risk of spousal maintenance being varied is therefore not one that that a spouse who is reliant on the income should make if the implementation of a pension sharing order by the making of a financial court order is a viable option;
• If the spouse who has agreed to share his or her pension with their husband or wife continues to contribute each month to the pension fund then the receiving spouse will get more pension than the paying party may have intended. Bear in mind that the payments might be outside the paying party’s control , for example if the pension payments are made automatically by an employer;
• If the pension fund gets into financial difficulties but all the person receiving the pension share has is an agreement to share the pension that is contained in a separation agreement they will probably receive less than they expected in pension share. However if a financial court order had been made and the pension sharing order implemented in most cases a financial advisor could have talked through the option of moving the pension money to a recommended pension company. The making of the pension sharing order is therefore important even if the pension is not in payment because the pension sharing order puts the spouse receiving a share of the pension in control of how they invest the pension funds.

The top London divorce solicitors always recommend taking legal advice before you sign a separation agreement. The contents of the separation agreement may not be in your financial interests or, if there are pension assets involved, a financial court order may give both husband and wife far better financial security.

How can OTS Solicitors help?

OTS Solicitors advise on all aspects of divorce and financial settlement law and have substantial experience in advising on and preparing separation agreements and financial court orders. Please get in touch with us on 0203 959 9123 to arrange an appointment to speak to one of our experienced divorce and financial settlement solicitors.