What is a Separation Agreement?
A Separation Agreement states how two former partners have agreed to split their financial assets (and any ongoing financial obligations) once they decide to separate.
A Separation Agreement is agreed between the two former partners without the intervention of the courts or any divorce proceedings. It can be entered into and agreed anytime after the partners separate and even before applying for a divorce.
Separation Agreements are also known as Financial Separation Agreements or Property Settlement Agreements.
What are the advantages of a Separation Agreement?
There are a number of advantages to a Separation Agreement:
- Save on stamp duty and CGT on transfer of property
- No court intervention or approval required
- No need to lodge with a court
- Mutually agreed between former partners
- More amicable and less stressful
- Quicker resolution
- No need to wait the 12 months required for a divorce
- Saves on expensive or lengthy litigation, and
- Saves on solicitor negotiation costs
What is the difference between a Separation Agreement and a Court Order?
A Court Order is made by a family court after reviewing the circumstances of a Divorce Application. The decision on how to split financial assets and ongoing financial obligations is determined by the court and ordered to be followed by the two parties getting divorced.
By contrast, a Separation Agreement is mutually agreed between the two parties, without court involvement. In this way, it is usually a much more amicable agreement, equally entered into by the two parties. Typically this avoids expensive litigation, acrimonious legal wranglings and a property settlement dictated by a third party. For these reasons, Separation Agreements are preferable to Court Orders.
Does a Separation Agreement need to be lodged with a court?
No, your Separation Agreement does not have to be lodged with a local court.
However, if your separation is not amicable you can always use the courts to review and approve financial and parenting arrangements. Courts can determine settlements and issue Court Orders. They can also review and approve mutually agreed arrangements through issuing what are called Consent Orders. These are a “half-way-house” that fill the gap between Separation Agreements and Court Orders.
Remember, your Separation Agreement becomes public when lodged with a court.
What is the difference between a Separation Agreement and Pre-nuptial Agreement?
A Pre-nuptial agreement is written before getting married and determines how financial assets will be split if the marriage fails. This type of agreement is often entered into when one partner has substantially more financial assets than the other and does not want to risk losing them in the event of divorce.
A Separation Agreement is written after a marriage/relationship has come to an end and lays out how the financial assets are agreed to be split.
Can Separation Agreements apply to defacto relationships?
Yes, except in Western Australia.
In this State the legislation on recognition of defacto relationships is behind the rest of Australia. For that reason, Separation Agreements may not be considered valid and it is worth checking locally with family assistance or legal aid groups.
The following factors are considered when determining whether a relationship is defacto:
- Length and duration of the relationship
- Whether any children are involved
- Financial dependence and sharing of finances
- Common residence and living arrangements
- Public acknowledgment of the relationship, etc.
Can Separation Agreements apply to gay relationships?
Yes, except in Western Australia. Gay relationships and same sex marriages are considered defacto relationships in most Australian States. Western Australia is the exception, for the same reason as stated above.
When are two partners considered separated?
You do not necessarily have to be ‘physically’ separated to be considered legally separated. You may still be living in the same house as your partner but considered ‘separated’ for the purposes of the law. Even if it is only one person who is instigating the act of separation, you may still be considered to be legally ‘separated’ even if you do not want or ask for it.
Do Separation Agreements cover children and parenting arrangements?
The Separation Agreement offered by Legal123 does not cover children or parenting arrangements. Our Separation Agreement just covers financial arrangements and is designed for couples with straight forward situations.
If you have children, your separation is not amicable or your financial situation is complex, we recommend you consult a specialist lawyer.
How is a Separation Agreement formalised?
A Separation Agreement is formalised and binding after all the following conditions have been met by both parties:
- Given complete and accurate disclosures of their financial positions
- Received independent legal advice about the agreement
- Provided with signed statements from legal advisors stating that advice was given
- Exchanged copies of these signed statements with their former partners, and
- Signed the Separation Agreement
It is worth noting that if either party do not give complete or true disclosures of their financial position, the Separation Agreement can be voided.