Separation Agreement vs. Settlement Agreement

• What is a separation agreement?
• What is a settlement agreement?
• How do these agreements differ?
• Which is right for me?
• Benefits of working with your spouse
• References

Separation agreements and settlement agreements are similar, but a separation agreement could arguably be thought of as less permanent. While separation, in many states, can usually go on indefinitely, it doesn’t permanently end a marriage like a divorce does. And, its terms tend to be far easier to reverse. 

A divorce settlement agreement will fully end a marriage once submitted and accepted by the court. It is a tool used by parties to establish the terms of the divorce.

What is a separation agreement?

While the specifics may vary by state, a legal separation agreement is a contract between two spouses who are separating but not ready to divorce. 

While the parties remain technically married, their separation agreement can include terms similar to those of a settlement agreement. For example, it will likely establish that both parties agree to live separately and not to pay each other’s bills. 

A legal separation agreement may establish what happens to marital (shared) property now that the couple will be living apart. If the couple has children, their separation agreement should generally establish where the children will live. Details about child support and spousal support may also be included in the agreement.

Not ready for divorce

Generally, a separation agreement isn’t applied for and can’t be made if you don’t know where the other party is or they don’t agree to the terms of the agreement. But it’s a useful tool for parties who are still on speaking terms and considering an extreme change to their relationship. 

A legal separation agreement doesn’t have to be permanent. The parties could both change their mind later and get back together. Legal separation doesn’t necessarily advance to divorce at a later date.

What is a settlement agreement?

A divorce settlement agreement is a comprehensive contract that sets forth the terms of a divorce. It’s a tool often used by divorcing parties who are still on speaking terms to set the terms of their divorce. 

Rather than a judge hearing a case and deciding how a divorce ought to be settled, the divorcing parties settle the terms themselves and submit the agreement to the court. Assuming there are no issues with the agreement and both parties consent to it, this can be a much faster way to get a divorce. It is often preferable for parties to talk about and negotiate their divorce terms out of court.

What should be included in a settlement agreement?

A divorce settlement agreement should be comprehensive, setting all the relevant terms of a divorce. It should include these elements: 

• How the division of marital assets will work 
• Who will pay alimony and child support, and at what amount
• How child custody and visitation will work
• Any other elements of a divorce that would otherwise be settled in court

Once approved by the court, this agreement becomes part of the legally binding divorce judgment. 

While it’s possible to have the terms of a divorce modified in a few cases, you should not enter into a settlement agreement lightly. It could potentially bind you to its terms for many years. 

How do these agreements differ?

There are some distinct differences between separation agreements and settlement agreements. 

Temporary vs. permanent

In most states where legal separation is recognized, a couple’s legal separation status could go on indefinitely. But practically speaking, most people won’t want to be legally separated for many years unless there is something, such as a religious obligation, preventing them from divorcing. 

Many people either seek a full divorce or take steps to repair their relationship and potentially end the separation. However, this isn’t required. 

Reversal possibility

Notably, separation agreements are far easier to reverse than a divorce. Reversing a divorce would generally just mean remarrying the same party from whom you divorced. 

A divorce settlement agreement is, in most cases, best thought of as permanent. The terms could be modified later in some scenarios, but they can’t typically be undone completely (unless one proves some legal issue occurred with the settlement that ought to render it invalid).

Level of detail

While a separation agreement can set very similar terms to those of a divorce settlement agreement, a settlement agreement will generally need to be more thorough. It’s a tool used to skip a court battle. As such, it needs to settle all the issues that would normally be settled in court.

Which is right for me?

One type of agreement isn’t inherently “better” than the other. It all comes down to what’s right for your situation.

A separation agreement may be right for you if you are having serious issues in your marriage and no longer wish to live with the other party but don’t want a divorce. This is especially true if you believe your marriage may be repairable but find it very difficult to live with your spouse at this time.

A divorce settlement is a solution for people who truly want (or need) a divorce but are on good enough terms with the other party that they can negotiate how the marriage should end. It allows the parties to cut a significant amount of the emotional turmoil, expense, and time commitment associated with a typical divorce. 

Benefits of working with your spouse

Notably, neither solution is particularly good for parties who are openly hostile or refuse to contact each other. Both agreements require working together. The parties need to be able to talk with each other, potentially with a mediator or legal representation present, and establish the terms of the agreement such that they both are willing to sign it. 

This usually will require some level of sacrifice. Such an agreement can rarely be reached with both parties getting everything they want. If an agreement can’t be reached, the parties may need to battle out the relevant issues in court.

Mediation is often the best approach if you and your ex can’t agree on certain issues but would like to avoid a court battle. A mediator can help you to reach a mutually beneficial resolution that saves the expense and stress associated with court. 

This is why, at Hello Divorce, we offer online mediation to clients (in addition to our online divorce plans and other services). We aim to make the divorce process as straightforward and stress-free as possible.

Suggested: Marital Settlement Agreement vs. Divorce Decree: Comparing Terms

References