Write your own financial Separation Agreement to save time and legal costs.
You should consider entering into a financial separation agreement with a former partner before going to a solicitor. Partners can save substantial costs by not requiring a solicitor to draft and negotiate your financial separation agreement. If a solicitor does draft the agreement, they will be required to negotiate on your behalf with your partner’s solicitor and this legal cost of both solicitors and the additional time that you could have saved by getting, at minimum, to a point where you agree some, if not all, of the arrangement, will cost you both substantial time and money.
If you both can agree on how assets and liabilities are split this expense can be saved and the only minor cost will be on the review, explanation of effect of the agreement and certificate required to be signed by your independent solicitors.
If full agreement on a financial separation cannot be agreed between both partners on how assets and liabilities are to be split, then ultimately this will need to be decided by a court, which takes the power and decision out of the partners’ hands altogether and may result in a court imposed decision which may not be the outcome you both may want.
Without a Separation Agreement your costs go up …
In the event you have to go to court because you cannot both agree on the division of your assets, it will be more costly and time consuming than any financial separation agreement you may try to agree. In addition, the court will require evidence that the partners have done everything possible to try to agree a financial settlement, including requiring the production of an attempted financial separation agreement.
If a couple cannot come to an agreement before finally going to court, the court will often request the partners to attend a formal mediation to determine these outstanding issues which will add additional cost and time. If this does occur and an agreement is achieved through mediation, this agreement will then still need to be reviewed and approved by the court. Generally speaking, having to go to the court is something that partners should try to avoid at all costs and do only as a final resort.
There are also additional benefits to agreeing a separation agreement. First, a financial separation agreement is not a public document and remains private between both partners. In addition, there is no stamp duty or capital gains tax on any real property which may be transferred between you both, provided your separation agreement is finalized before the transfer of any property, which results in considerable cost savings.
In summary, it is preferable to amicably agree a property settlement than have solicitors and the court involved in determining your unresolved issues. But having such an agreement, you will have more control over the outcome and likely be happier as a result.