Legal Definitions - Separation agreement

A separation agreement is a formal, written contract created voluntarily by a married couple who are separating or divorcing. This agreement outlines how they will resolve important matters related to their separation, rather than having a court decide these issues for them. It typically covers topics such as how their assets and debts will be divided, financial support for one spouse (often called alimony or spousal support), and arrangements for their children, including custody, visitation schedules, and child support payments.

Here are some examples of how a separation agreement might be used:

• Example 1: Dividing Assets and Debts

  After 15 years of marriage, Mark and Sarah decide to separate. They own a family home, have several joint bank accounts, and share responsibility for a car loan and credit card debt. To avoid a lengthy court process, they voluntarily work with their attorneys to draft a separation agreement. This agreement specifies that Sarah will keep the family home and refinance it to remove Mark's name from the mortgage, while Mark will receive a lump sum payment from Sarah's share of their joint savings. They also agree on how to divide their retirement accounts and allocate responsibility for the remaining debts.

  This example illustrates a separation agreement because it is a voluntary contract between spouses that governs the division of their property and debts, which are key issues addressed during a separation.

• Example 2: Child Custody and Support Arrangements

  David and Emily are divorcing and have two young children. They both want to maintain an active role in their children's lives and agree on a shared parenting schedule. Emily also needs financial assistance for a period while she transitions back into the workforce. Their separation agreement details the children's residential schedule, holiday arrangements, and who makes major decisions about their education and healthcare. It also specifies the amount and duration of child support payments from David to Emily, and a period of spousal support to help Emily become financially independent.

  This demonstrates a separation agreement's function by showing how it can establish clear terms for child custody, visitation, and financial support for both the children and a spouse, all agreed upon voluntarily by the separating parents.

• Example 3: Handling Complex Financial Interests

  Lisa and Ben are separating after building a successful small business together, in addition to accumulating personal assets. They want to ensure the business continues to operate smoothly while they divide their personal finances. Their separation agreement includes provisions for valuing the business, with Ben agreeing to buy out Lisa's share over a specified period. It also outlines the division of their other marital assets, such as investment portfolios and vacation properties, and how any outstanding business debts will be managed. They also agree that neither will disparage the business publicly during or after the separation.

  This example highlights how a separation agreement can address complex financial arrangements, including business interests and other significant assets, allowing a couple to define the terms of their financial disentanglement outside of court intervention.