How to Draft a Good Separation Agreement: The Nuts and Bolts
If you and your spouse are able to agree on the terms of your separation by having a separation agreement, that is great news. Resolving issues like child custody, visitation schedules, child support, spousal support, and asset division is a huge step in the divorce process, and knowing how to draft a separation agreement will give you a leg up in your divorce. Having a detailed agreement will likely involve tense discussions about life-changing decisions, but this method of handling issues does give a couple input on these extremely critical choices and situations. A separation agreement is often a more economical solution as well. The costs associated with a divorcing couple needing the court to resolve their issues are extreme.
A separation agreement is a private contract; parties can include terms about the children; holiday schedules; child care; health care; furniture; selling the home; spousal support; equitable distribution and many other terms. Each separation agreement should be drafted to fit each couple’s unique concerns and needs. Often, a completed agreement will range from 8-20 pages. There are many details to include.
Parties often focus on their children, their schedules, child support and asset division. To protect those terms and to have a good agreement that will withstand any legal attacks or “loop holes”, here are some suggestions for how to draft a separation agreement and make sure your agreement is legal and “air tight”.
- Make sure there has been a full disclosure of all assets. Hiding an asset can give the non-hiding party grounds for attacking the agreement. Another strategy tip, if there is discovery of a hidden asset, the “innocent” party can receive a higher percentage of that asset, i.e., 80%.
- Both parties should have his or her own attorney review the contract/agreement. A lawyer cannot legally represent a couple in drafting a separation agreement. As such, it is a good idea to write in the agreement that if one of the parties chooses not to have an attorney, that he or she waived that right to counsel and can’t come back after the fact and say “But I did not have a lawyer”.
- Everyone needs to understand that the court can always entertain a motion or action to change something in the agreement if it deals with the minor children. The court can always step in and protect minor children. Which means: the agreement’s terms concerning the children can be altered in the future if needed for the best interest of the children. However, the court rarely will modify terms that concern the adults, for example terms dealing with asset division or spousal support.
- If an “item” aka a known and disclosed asset, account, etc. is not mentioned in a separation agreement, then that item is deemed waived. It is a moot point. The parties can’t come back after the fact. For example, if 2 years down the road, wife wants a portion of her ex-husband’s savings account that had a $10,000 balance when they separated, it is too late. If wife was aware of that account, and the separation agreement did not mention that exact account division, it is too late for wife to ask for some of those funds. Thus, it is a good idea to have a general release clause that states that any rights or claims that are not addressed are waived.
- Some courts allow parties to have their separation agreement incorporated into their divorce order. That means the agreement’s terms can be enforced by the court. It also means that the court can more easily modify the terms the parties agreed upon. On the other hand, an unincorporated separation agreement is not modifiable unless the parties agree.
- A separation agreement, once signed by the parties, is a contract. If there is a breach (for example if a husband does not make spousal support payments for 5 months) the non-breaching party can file a lawsuit, asking for specific performance and monetary damages. A separation agreement is more than “just a piece of paper”. Breach of contract remedies are available.
- If the separation agreement has been incorporated in the divorce order, the party who is violating the terms of the agreement can be held in contempt of court for non-compliance of the court order. Again, the importance of the agreement cannot be overlooked.
- Details, details, and more details. The more specific and detailed your agreement is, the better. For example, when dealing with children and visitation schedules, some parties just focus on Christmas and Easter. A better approach is to consider all holidays and school schedules. Parents should review school breaks, spring and fall breaks, Easter, Memorial Day, July 4th, Thanksgiving Week, birthdays, family reunions, Winter holidays, family reunions, etc. Which in turn, necessitates addressing out of state and out of country travel, passports, sharing travel plans, etc. Another example is, how to sell the home and the need for details. A good agreement will address when to sell, the realtor to use, when to make price adjustments, how to handle repairs, etc. The more details the agreement has, the better. Details help reduce the need for more discussions and disagreements.
- Make sure each sentence and paragraph in the agreement is clear and unambiguous. Don’t be intimated by legal terms, state the terms and agreements that you and your spouse have agreed upon. If you don’t understand a clause, speak up, ask questions, and make sure you know what it means.
- Read the entire agreement and make sure you do not have conflicting terms. For example, there is a couple that has invested much money over the years buying musical instruments for themselves and their 6 children. There are numerous musical instruments, including a baby grand piano, several guitars, 3 tubas and 4 violins. The parties agree that the wife will keep the baby grand piano. But, later in the agreement, there is a clause that states the parties agree to sell all of the musical instruments and to divide the proceeds, 60% to husband and 40% to wife. That clause conflicts with the piano clause. Eliminate any conflicting terms in your agreement.
Drafting a detailed separation agreement will take some time, but it is worth it. Having a private, customized agreement for the family is the preferred way to handle these important issues.