What Is a Virginia Separation Agreement?
A Virginia separation agreement is essentially a contract between you and your spouse. A standard separation agreement includes provisions regarding the division of debt, the division of property, alimony, child custody, and child support after you and your spouse have separated. It typically provides for support of the dependent children during and after separation and divides the community assets and debts acquired during the marriage. The separation agreement controls and formalizes all aspects of divorce. Typically, a couple will include provisions that are far more extensive in nature in their written separation agreement than provided for by the court.
Signing this contract, however, does not mean you have to get divorced. Many couples go on as they are before the separation. Each spouse signs the agreement and, if there are children, each spouse provides a signed copy to the children’s school. A signed separation agreement does not bind the parties to divorce; only the court can do that. But it is customary for the parties to incorporate the agreement into the consent decree if they do eventually divorce , making it legally binding and enforceable.
Signing this contract also does not automatically make you eligible for divorce. There are specific requirements for obtaining a divorce in Virginia, and under certain circumstances after a period of time or after one spouse has an affair, a divorce is as simple as signing the agreement. There are no hearings to divide property, spend hours in court, and wait months for a judge to sign off the divorce. In fact, a no-fault, non-contested divorce is the most common way of divorcing in Virginia with this case type having the fewest number of judicial cases in any given year.
In Virginia, a judge will approve these agreements except where the terms are unfair or unconscionable. Generally, the courts will enforce separation agreements that contain terms that are both legally permissible and fair. Virginia courts will not enforce provisions in such contracts that violate public policy or present a competing interest that defeats the essential purpose of the contract. For example, a court will not enforce an agreement that contains a term requiring a monetary payment upon divorce – that’s against public policy to compel someone to stay married.
Formalities in Virginia
As with all contracts, it is essential for your Virginia separation agreement to be in writing. For a separation agreement to be enforceable in Virginia, it must be in writing and signed by both parties. Even if you move out and have been living apart for some period of time, you are free to change your mind and move back in or reconcile. Therefore, until a Virginia Separation Agreement or a final order that was entered after your divorce is signed by a judge, the terms can be altered at any time and are not legally binding.
Additionally, YOUR SEPARATION AGREEMENT SHOULD CONTAIN A CUSTODY/VISITATION AND CHILD SUPPORT PROVISION AS APPLIES TO MINOR CHILDREN. If your children are over the age of 18 and self-supporting then a provision requiring custody, visitation and child support (including the payment of any arrearages that may be owed) is not necessary. However, we always advise an alimony payment provision.
Section 20-155 of the Code of Virginia provides that there are certain material terms that a signed Virginia separation agreement entered into after July 1, 2008, must contain. The items that are required to be addressed in the separation agreement include:
• The care and custody of minor children. Virginia now requires parties to agree on which one of the parents will have custody of the minor children and any visitation rights. The agreement must also contain provisions for custody and visitation if the custodial parent moves at some future point with the children.
• The amount of monthly child support that is to be paid. It is no longer allowed to leave the amount of child support to be paid open or based on the Virginia Child Support Guidelines. The specific amount must be agreed upon.
• Health care coverage and medical expense payments. Virginia now requires the parties to agree on how health insurance coverage will be provided for the children and how the medical expenses are to be paid. Medical expenses are those of the parties and include any uninsured health care expenses. If the child support award does not require the parties to pay their share of the uninsured medical expenses, the agreement must state that these amounts will be included in the child support award.
• Life insurance on the life of either party that benefits the other party or the minor children. Virginia now requires a party to agree to maintain life insurance on his or her life with the other party and/or minor children as beneficiary.
• The division of pension, retirement and deferred compensation benefits, if any. The parties must agree to divide benefits of their retirement plans. Furthermore, the parties must agree as to how the benefits are to be divided. The method of dividing benefits is currently being scrutinized by the IRS, the IRS requires that the parties obtain a letter from the IRS approving the pension division prior to court entry of the Methodology stipulated in the agreement.
• The division of debt obligations, if any. The parties must stipulate how the debts of the parties are to be divided in order for the separation agreement to be enforceable. A Virginia Separation Agreement entered after July 1, 2008, may be enrolled and incorporated into the final decree of divorce and therefore become a final order of the court.
Separation vs Divorce
The biggest difference between separation and divorce is that separation is not a legal process, while divorce is. When you sign an agreement and live separately from your spouse, you and your spouse may be physically separated without living separately. It is very important to remember that a legal separation does not terminate the marriage. If you want to terminate the marriage, you need to file for divorce.
Some clients prefer legal separations (often known as "live separate and apart"). These are generally used when individuals want to maintain the status of being married for insurance, tax or other purposes, may want to remain on spousal benefits, or don’t want the finality of a divorce. Other people, however, may be very interested in a separation because they can start the court process while remaining married, as Virginia does not provide a mutual no-fault ground for divorce unless you have been separated for one year.
A common misconception about separation agreements is that once one party files for divorce and begins to litigate the divorce, that separation agreement is no longer valid or enforceable. Unless the separation agreement specifically states that it only applies if the parties are separated at the time of the filing, then it is still a valid enforceable contract, and you will need to abide by what is set forth in that separation agreement unless you mutually agree not to do so. A separation agreement is a contract that you sign with your spouse while still married. A divorce decree is a court order that terminates the marriage.
Substantive Provisions in a Separation Agreement
A Virginia separation agreement commonly addresses the following provisions:
Child custody – Child custody arrangements are often agreeable to the parents involved in the separation agreement. However, there are sometimes cases where one parent will object to a proposal that the other parent will be solely responsible for making all major decisions involving their child or children. Such provisions are spelled out in detail in the parties’ separation agreement.
Child support – Most Virginia separation agreements require a child support provision that is agreeable to both parents. Guidelines are frequently explained in detail in the separation agreement itself or included as an exhibit. Child support is decided on the basis of a formula that incorporates parental income, the number of children and other considerations.
Spousal support – A spousal support provision in a Virginia separation agreement should discuss the terms, scope, duration and amount of the expected financial obligation. Spousal support obligations can be permanent, for a limited duration or "temporary" periodic payments during the period prior to a divorce.
Personal property – A Virginia separation agreement will typically specify the division of personal property that was acquired during the marriage. If there are disputes about this type of property, such as furniture or vehicles, the parties will presumably negotiate their terms and conditions before execution of the separation agreement.
Real estate – Similar to a personal property provision, a Virginia separation agreement may include a term that specifically outlines the distribution of real estate items. For example, spouses may sign a separation agreement that elaborates on the process of selling one spouse’s interest in the marital home to the other spouse who will continue to live there.
Debt – Virginia courts divide marital debt in a manner that may or may not be equal to the division of marital property. Parties to a separation agreement may have more flexibility in the way marital debt is divided, but such debts can be significant amounts. Parties may hire a forensic accountant to assist in the process.
Drafting a Separation Agreement
Understanding Virginia Separation Agreements: Key Facts and Considerations
How to Draft a Separation Agreement in Virginia
Similar to any other form of contract, the separation agreement will require a few preliminary considerations and steps prior to completion. Seek Legal Counsel – Always. It is always important to consult with an experienced Virginia divorce lawyer when contemplating a Virginia separation agreement. A Virginia divorce lawyer will help navigate the legal intricacies and draw attention to any particular point that may have been overlooked during negotiations. The lawyer will also help ensure that the agreement is legitimate and legally enforceable. Negotiate the Terms. Negotiations concerning this form of contract often begin with one party sending the other party a draft of the entire document. The first draft of the document can often be heavily skewed in favor of the draftsperson. It is important to remember that compromises will be required on both sides for the contract to be finalized. It is also relevant to note that while the parties are free to negotiate over any matter before entering into the agreement, the court will not enforce any provisions that are illegal, against public policy or unconscionable . Unconscionability relates to how much harm would be caused if an agreement is enforced. In general, the provisions must be able to pass the "smell test". If the substance of the agreement appears to be disgusting or offensive, the court may not enforce it. The substance of the contract must be conscionable. This means that the terms of the contract shall be reasonable under the circumstances. Finalize the Agreement. All provisions shall be reduced to writing and executed. A court will not enforce a verbal separation agreement. Both parties will be required to sign the written document. It becomes necessary to notarize a separation agreement when the agreement provides for the transfer real property (e.g. homes, lots) or if the transfer of property might not be enforceable until the agreement is recorded. Upon the notarization, each party will be entitled to receive a copy of the final document for their records. Once finalized, the Virginia separation agreement will be binding upon the parties to the extent that the contract’s provisions are not violative of the public policy of the Commonwealth of Virginia.
Benefits of a Separation Agreement
A Virginia separation agreement can be an extremely beneficial document in Virginia divorce cases. Separation agreements are comprehensive contracts that allow spouses to divide assets and debts, agree upon alimony, waive spousal support, and schedule custody and visitation. Once executed, separation agreements are legally binding contracts on the parties. They are also enforceable through a civil contempt action if one party violates the specific terms of the agreement. Virginia family law judges will often hold parties to the terms of their separation agreements, which is further evidence of their enforceability.
A separation agreement is beneficial because it allows the parties to achieve a high level of clarity over important divorce issues, as opposed to remaining in conflict and continuing to fight over contested matters.
Further, separation agreements will oftentimes save you a significant amount of time and money by limiting or eliminating litigation on important issues. For example, negotiations over spousal support, custody, and division of property can be very time-consuming and expensive with the involvement of lawyers and the court system.
A Virginia separation agreement is also helpful because it allows the parties to resolve all issues at once (assuming the parties can reach a full agreement). The parties can sign and incorporate all agreements, and have them incorporated into a final decree.
Modification and Enforcement of a Separation Agreement
An important fact to consider when contemplating a Separation Agreement is that the terms of the document no longer need to be approved by the Court. This is not the case for a Pre-Nuptial Agreement, which takes effect immediately upon signing, but may not be brought in front of the Court until time of divorce. A Separation Agreement will likely take effect as to all terms when both parties have signed and the document is notarized, however, the parties need to bring the Separation Agreement in front of the Court only if issues arise regarding enforcement or modification, or when one of the parties dies. When the Separation Agreement is presented to the Court (assuming the parties did not move forward with the divorce) the Court will then take jurisdiction over the terms of the Separation Agreement. The same is true once the Separation Agreement is presented to the Court and approved in conjunction with the Final Decree of Divorce. At this point, the Separation Agreement becomes a Court Order, and the Courts now have the ability to enforce the terms of the agreement, whether or not the terms are being complied with by both parties. For example, if your spouse is not paying support, the court has ordered specific visitation, or the parties have agreed to sell the marital residence, if the other spouse does not comply with the terms, the Court is able to enforce compliance.
It is important to remember that if your spouse does not abide by the terms of your Separation Agreement at the time the document is signed, you still must have the Court approve your Separation Agreement before you can move forward with a motion/petition for enforcement.
Mistakes to Avoid
Even in the simplest of cases, spouses often make mistakes when it comes to separation agreements. Here are some of the most common pitfalls:
1. Failing to include certain assets or debts. Spouses often forget to include certain assets or debts in their separation agreement, which later become an issue when it comes time to divide them. Keep in mind that all property subject to equitable distribution must be included in your separation agreement to be properly divided at a later date. It’s also important to ensure that you are not giving up any rights to which you are due.
2. Not marketing a business for sale. Business owners sometimes think it is a good idea to give the non-owning spouse a discounted interest in the business before the business goes on the market or closes, but such discounting is not necessary and could raise red flags with a potential buyer. If your business is going to be sold as part of the proceeds used to satisfy equitable distribution, the business needs to be valued and acquired on the open market. A buyer wants to make sure a business has been valued by a third-party expert and no favoritism has been shown to the losing spouse.
3 . Using only a financial advisor or accountant to define terms. Don’t just rely on your financial advisor, accountant, or other expert to define all the terms for you. Your spouse is not contractually obligated to follow the advice of your third-party advisor. A lawyer can walk you through what language is necessary and explain how to protect yourself, your spouse, and your children with our separation agreement.
4. Agreeing to pay more than what is required. Sometimes in the heat of the moment, you might agree to pay your spouse more than what you owe him or her, or allow your spouse to keep certain assets that belong to you. This might be a decision you will go back and wish you had not made after your emotions have cooled.
5. Trying to hide money from the other party. Don’t try to pull a fast one on your spouse by hiding money in offshore bank accounts, delivering assets to friends, or shifting funds between accounts. There are divorce lawyers who specialize in asset concealment matters. A judge has the power to reverse certain transaction on behalf of a spouse when there is evidence that they were made to intentionally try and hide money. If you do this, you may be giving your spouse grounds to return to court.