Couples Who Informally Agree Their Split When Separating – How To Make It Legally Binding

Many separating couples prefer to avoid conflict and reach an informal agreement about who keeps the family home, how savings will be divided, whether maintenance should be paid, and what arrangements should be made for their children. And in many cases, this approach can be sensible. However, one of the biggest risks is assuming that a verbal agreement, a series of text messages, or even a written document signed between two people is automatically legally binding.

In family law, an informal agreement is not always enough to provide long-term protection; circumstances change, memories differ, and one person may later decide that the agreement no longer suits them. If the agreement has not been properly formalised, it may be difficult to enforce.

Why an informal separation agreement may not be enough

Unlike some areas of law where a contract can be created through a simple agreement between two people, financial arrangements following separation and divorce have additional requirements.

For example, a couple may agree that one person will remain living in the family home while the other receives a share of the property value at a later date. They may agree that one person will keep their pension while the other receives a larger share of savings or other assets. Although these arrangements may appear clear, they may not prevent either person from making future financial claims.

This means that if a couple subsequently divorces, they can still potentially bring financial claims against each other unless those claims have been formally dealt with. A divorce itself does not automatically end financial ties.

This is why many separating couples choose to obtain a legally binding financial order, often called a consent order, which records the agreement and asks the court to approve it.

What types of separation agreements can be formalised?

There are several different areas where separating couples may wish to turn an informal agreement into something legally binding:

Financial arrangements

Financial settlements are one of the most common areas where couples seek to formalise an agreement. A financial order can deal with issues such as:

• The family home and whether it should be sold, transferred or retained by one person
• Savings, investments, and other assets
• Debts and liabilities
• Business interests
• Inheritance or future financial claims
• Whether either party should receive a lump sum
• Whether financial claims should be brought to an end through a clean break order

If a couple are divorcing and have reached an agreement, a solicitor can prepare a consent order reflecting the terms agreed; this is then sent to the court for approval.

A consent order is particularly important where there are significant assets or where either party wants certainty that future claims cannot be made.

Property arrangements

Informal agreements about property can create problems if they are not properly documented. For example, a separating couple may agree that one person can stay in the house with the children until they reach a certain age, after which the property will be sold and the proceeds divided. Alternatively, one person may agree to transfer their interest in the property to the other.

These arrangements need careful drafting because issues can arise around mortgage payments, ownership, future sale dates, and responsibility for repairs and maintenance. A legally binding order can provide clarity and reduce the risk of future disagreement.

Pensions

An informal agreement that each person keeps their own pension may not always be appropriate, particularly where there is a significant difference between the parties’ pension values. If pensions are to be divided, a pension sharing order is required, which allows part of one person’s pension to be transferred into the other person’s name.

Alternatively, pensions may be taken into account when dividing other assets. For example, one person may retain more equity in the family home in exchange for giving up a claim against the other person’s pension.

Maintenance arrangements

Couples may also informally agree arrangements for ongoing payments. This could include:

• Spousal maintenance
• Child maintenance above the amount assessed by the Child Maintenance Service
• Contributions towards mortgage payments or household expenses

While some maintenance arrangements can be agreed between the parties, it is important to understand the difference between an informal agreement and an enforceable court order. A voluntary arrangement for spousal maintenance might be changed or challenged in the future, but a court order provides greater certainty, although maintenance orders can sometimes be varied if circumstances change.

Child arrangements

Child arrangements are slightly different because the court’s main concern is always the welfare of the child.

Parents can agree arrangements without involving the court, and there are many separating parents who successfully agree where their children should live, how much time they should spend with each parent, and how holidays and special occasions should be shared.

A written parenting agreement can help avoid misunderstandings, although it is not usually legally enforceable in the same way as a financial order. If parents cannot agree, or if there are concerns about a child’s welfare, an application to the court may be necessary.

What information is needed before an agreement becomes legally binding?

Before approving a financial agreement, the court expects both parties to have properly understood their financial position. This usually involves exchanging financial disclosure. Both parties should provide details of their:

• Income
• Property values
• Mortgages
• Pensions
• Savings
• Investments
• Business interests
• Debts
• Other significant assets

This information allows each person to make an informed decision about whether the agreement is appropriate. A settlement reached without full financial disclosure may later be challenged if one person discovers assets were hidden or important information was not provided.

Does the agreement need to be fair?

Although the court generally respects agreements reached between couples, it does not simply approve every consent order automatically. A judge has a duty to consider whether the agreement is fair in all the circumstances.

The court is not there to rewrite an agreement simply because it might have made a different decision. However, it will refuse approval if the agreement appears clearly unfair or if there are concerns about whether one party properly understood the consequences.

Although many consent orders are approved, the court can refuse an agreement for several reasons. This may happen if:

• One person has not provided full financial disclosure
• The agreement appears unfair
• There is evidence of pressure, coercion, or undue influence
• One party did not receive proper legal advice
• The agreement does not properly address important financial issues
• There are errors in the drafting

If one spouse agrees to receive very little from a financially comfortable partner without understanding the value of the assets involved, the court may require further information before approving the order.

Turning an informal agreement into a legally binding arrangement does not mean the separation has become hostile. In many cases, it is simply a sensible way of ensuring that both parties understand their rights and responsibilities.