When married couples separate some couples decide that they do not wish to divorce however they do wish to divide the marital assets and obtain financial independence.

A couple separating can reach a private agreement as to their financial arrangements. An informal agreement can be reached where both parties agree how to divide the assets or a more formal agreement can be reached with all the details set out in legal document known as a ‘Separation Agreement’.

It is important if parties wish to enter into a separation agreement that they obtain full and frank financial disclosure of each others financial position. Although the agreement may appear to look like a formal legal document it is not a contract and cannot be enforced through the court. It is simply a private agreement between the parties as to how the assets are to be divided.

If either party decides to change their mind the separation agreement is subject to review and if the parties commence divorce proceeding in the future the agreement can be varied. There is no time limit on the court’s ability to review a private agreement and if the parties have been separated for many years the court can . reconsider any private agreement and vary how the assets are divided and will then make a court order.

If the court is asked to consider a separation agreement when looking at divorce proceedings it will consider all the circumstances when considering whether it is fair to hold the parties to the agreement and whether circumstances have changed in some important and unforeseen way. The most important consideration is whether there was full disclosure of all the relevant information by both parties and whether both parties had the benefit of independent legal advice. If both parties have considered all the relevant information and taken legal advice, it is likely that the Court would uphold the separation agreement.