Separation Agreements
Let’s say you got married without a prenuptial agreement (as most people do). It’s not too late. You can still agree on all the matters we discussed in the previous chapter and define what will happen in the event of death or divorce in a written contract signed after the wedding. Postnuptial agreements are just as valid as prenuptial agreements.
Of course, the bargaining positions are different after you are married. If your spouse refuses to sign a postnuptial agreement, the family laws of your state will apply. But some couples find that a postnuptial agreement gives them peace of mind, security, and more certainty about the future. It can sometimes help resolve marital difficulties.
But when the difficulties become so significant that separation or divorce is the next step, then the postnuptial agreement takes the form of a separation agreement.
Why a Separation Agreement Is Better than a Divorce
Kathy had decided she wanted a divorce from her husband, John, so she calls Larry, a divorce lawyer recommended to her by a friend.
“I want a divorce” is the first thing Kathy says to Larry.
“Let’s talk about that,” replies Larry. “Only the court can grant a divorce. And the court requires that you have reasons for a divorce. These reasons are called grounds for divorce. They are set out by statute and they differ in every state. But in our state, we have the traditional fault grounds of adultery, cruelty, and desertion.”
“None of those apply,” responds Kathy.
“Then, we have the no-fault grounds of separation for one year.”
“But we’re still living together!” cries Kathy. “And I need a divorce now! You’re saying I can’t get one?”
Note You cannot file a complaint for a divorce until you have grounds for the divorce. No matter where you live in the United States, the law requires that you have certain specific reasons for wanting a divorce.
“There may be another way to solve the problem,” says Larry.
“What is it?”
“A separation agreement.”
“How does that work?” asks Kathy.
“A separation agreement is a written contract between two married people,” Larry tells her. “It includes all the terms that a decree of divorce would contain. It is like a private divorce.” The separation agreement is 98 percent of your divorce. It contains all the details. Once you have a separation agreement signed, you may still have to wait for the separation period to run out before you can file for divorce, but then you will have a ten minute, uncontested divorce trial. Your complaint says to the judge that all disputes have been settled and resolved and there is nothing left for the judge to decide.”
“Do I need grounds for a separation agreement?” asks Kathy.
“No.”
“Do we have to be separated to have a separation agreement?”
“No.”
“That sounds great!” remarks Kathy.
“Yes, it is,” Larry replies. “A separation agreement can give you almost everything a divorce can, except the right to remarry.”
Tip You can still get almost everything a divorce can give you with a separation agreement even if you don’t meet the requirements for divorce.
“Only problem is I want to get divorced as soon as possible,” Kathy continues.
“Most people do,” responds the lawyer. “But ironically, once you have a separation agreement, you no longer need a divorce. As a matter of fact, you can take as long as you like to file for a divorce. That is, unless you want to get married again right away. I even had one client who went from his divorce proceedings on the fourth floor of the courthouse to the marriage license bureau on the first floor that same afternoon.”
“I don’t have anyone beating down my door to get remarried, but will I be able to date legally with a separation agreement?” inquires Kathy.
“Technically, you are married until you are divorced,” he tells her. “So it is possible to commit adultery even when you have a separation agreement. Adultery is grounds for divorce in our state. But the areas where adultery matters are alimony and property distribution. Once you have agreed to the terms of these in a separation agreement, the court will not change them even in the case of adultery.”
“So, can I get a divorce a year after we sign the separation agreement?” Kathy proceeds.
“You can file for divorce a year after you physically separate, which means live in different homes in this state. Or if there has been adultery, you can file for divorce immediately without separating and without waiting a year. Once you file for divorce, it takes a little time to actually get your divorce.”
Filing the Separation Agreement
Next, they get on to topic of what to do with the actual agreement. “Do I file the separation agreement with the court?” Kathy asks the lawyer.
“Not immediately upon signing it.” Larry replies. “Should we go through with this, you’ll keep it somewhere safe until your divorce and I’ll keep an original in my office files as well. When you file for divorce, we’ll attach a copy of the separation agreement to the complaint or submit it at the uncontested divorce hearing. It will be incorporated into your decree of divorce and then become an order of the court.”
“So, Larry, do you think a settlement agreement is the way to go?” asks Kathy.
“Definitely,” he answers. “You can negotiate the outcome rather than let a judge, who is a stranger to your marriage, decide. Judges are trained as lawyers, not family social workers. And the legislature has limited the judge’s power by statute. For instance, the judge cannot transfer ownership of assets in our state except in limited circumstances. But the parties can transfer assets by agreement and the court will follow that agreement. You may go into greater detail in a separation agreement than with what a court typically orders in a divorce decree.”
“What’s the downside?” asks Kathy.
“There is only one,” Larry tells her. “We have to get your husband to agree. If he doesn’t, then you have a contested divorce trial, which means more time, stress, legal fees, and uncertainty of outcome.”
What to Include
“I’m sold,” declares Kathy. “What do we include in a separation agreement?”
“The separation agreement includes all the issues regarding divorce, including division of property, alimony, child custody, child support, taxes, and legal fees, among other things,” the lawyer tells and hands her a checklist.
I reproduce a typical checklist in the sidebar. (You will notice a certain symmetry between this list and the things we have talked about so far.)
CHECKLIST FOR SEPARATION AGREEMENT
The following is a list of items that typically need to be included or addressed in the separation agreement. Sit down with your spouse and go over this list, and agree on how you will handle each particular item and provide the information requested. Be sure to have an answer for each of the items; it will save you time and attorney’s fees.
Facts (sometimes called “recitals”)
The names of the husband and wife.- The date of the marriage.
- The names and birthdates of the child(ren).
- The date of separation (the actual date or the intended future date if you are still living together)
In order to make a contract valid, the law requires that the parties exchange something of value. In a separation agreement, the mutual promises the husband and wife make to one another are what is considered to be the thing of value. Sometimes lawyers state in the agreement that one dollar has been exchanged. This is a legal formality and the statement itself is good enough to make the agreement valid. You don’t really have to pay the dollar.
- The date of the actual or intended separation.
- A mutually signed confirmation that you will live separate and apart after that date.
- A mutual confirmation that you can both live as though you were single people.
- A mutual confirmation that you will not interfere with one another’s lives.
- A mutual confirmation that you have no further marital interest in one another’s property.
- A mutual confirmation that you have no further marital interest in one another’s property.
- A mutual confirmation that spouses have no further interest in one another’s income.
Legal Custody of Children (Long-Term Parenting Decisions)
Education
- School (public or private): which will the children attend?
- Tutors: Permissible? Who pays?
- Extracurricular activities: Anything off limits? By mutual agreement? Who pays?
Medical Care
- Name of the child(ren)’s pediatrician and other doctors.
- Name of the children’s dentist.
- Name of permissible medications.
- Braces: OK? Who pays?
- Cosmetic treatment: OK? Who pays?
- Therapy: OK? Who pays?
Other
- Child(ren)’s religion: which one?
- Last name: which parent’s name will be used?
- Must both parents consent for child(ren) to join the military before they reach the age of adulthood?
- Who has the right to select the lawyer if the child(ren) have a lawsuit?
Access to Children (Time-Sharing, Visitation)
- Where will the child(ren) live most of the time (residential custody)?
- What are the daily routines at each of the homes (homework, television, bedtimes)?
- What is the schedule for each parent’s access (weekly, holidays, summer vacations)?
- Pickup and drop-off: where, who, when?
- Relocation: permitted, prohibited, new schedule?
- Introduction of the child(ren) to new people in parent’s lives: will it be allowed?
- A determination of the child(ren)’s financial needs.
- A calculation of child support: which party will pay child support to the other?
- Payment of child support: by check or through wage-withholding order?
- Payment terms: Monthly, semimonthly, or biweekly? Is there an adjustment for inflation?
- Review of child support calculation and exchange of financial information: how often?
- Termination of child support: when does it end and for what reasons?
- Health insurance: who covers the child(ren)?
- Child(ren)’s uncovered medical expenses: who pays?
- Life insurance to replace child support if parent dies: Necessary? Who pays?
- Day care: who pays?
- Summer camps: Permitted? Who pays?
- Extracurricular activities: permitted?
- Religious celebrations, weddings, automobiles: who pays?
- College expenses: who pays?
- What is the amount of alimony that will be paid?
- How long will it be paid for?
- Modifiable or nonmodifiable?
- Cost-of-living adjustments that will be included.
- Its terms for termination.
- Its terms for cohabitation.
- Health insurance benefits included.
- Life insurance benefits it specifies.
- Does it include legal fees for a divorce?
- The marital home: Sell it? When? Price?
- Other real estate owned: who gets what?
- Division of proceeds.
- Spousal buyout of the other: price and terms?
- Mortgage in joint names: Can spouse buying the home take the other spouse’s name off the mortgage by refinancing? How long will it take?
- Cost of deed preparation and transfer fees: who pays?
- Bank accounts, cash, certificates of deposit, money market accounts: who gets what?
- Contents of safe deposit box: how are they divided?
- Stock, brokerage accounts, stock options: who gets what?
- Family business: Sold? Divided? Continue to own jointly?
- Automobiles: who gets which ones?
- Household furnishings and furniture: who gets what?
- Jewelry: who gets what?
- Collections: who gets what?
- Clothing and other personal items: who gets what?
- Time-shares: how are they divided?
- Life insurance: who gets it?
- Frequent-flyer miles and credit-card reward points: who gets them?
- Defined-contribution or defined-benefit plans?
- Value of each account.
- Division between spouses and in what amounts?
- Qualified orders: required?
- Lawyer who will draft orders: which one?
- Which party pays for survivor benefit?
- Tax-filing status: “Joint” or “Married filing separately”?
- Child exemptions and related tax benefits: who can claim them?
- Apportioning taxes due: how should this be done?
- Dividing refunds: how should this be done?
- Costs of preparing returns: who pays?
Summary
The divorce issues we have discussed in previous chapters can be resolved with a separation agreement. A separation agreement has many advantages over a divorce trial and can give you almost as much as a divorce can give you except for the right to remarry. Use the checklist in this chapter to learn about the items to include in your separation agreement.
There are several different ways to get a separation agreement, which we will discuss in the next chapter.