Simple Divorce vs. Separation Agreement: Avoid this BIG Mistake
Many couples use online Simple Divorce services to obtain an online divorce order from the Court. The cost is about $1000+. The couple is in agreement they want to get divorced. They don’t need a separation agreement or lawyers because they agree they will be going their separate ways and they have already divided their assets. Why waste money on a separation agreement?
While a simple divorce may seem like the easier, cost effective and faster option, it leaves important issues unresolved and it doesn’t provide the couple with any confirmation in writing of what they agreed to. It also leaves out important release language.
Why do you need a written release? Releases mean that you both understand what you are signing and you agree not to re-open this agreement down the road. Without this language either one of you can re-open the divorce and apply to the Court to equalize your property or worse that you now owe monthly spousal support. Yes - we have seen this happen first hand. It happens all the time.
Simple Divorce
A simple divorce (also known as an uncontested divorce) is a the legal document that terminates a marriage. It typically involves filing an application with the court, serving papers to the other spouse, and obtaining an Order. The primary function of a simple divorce is to change the parties' legal status from married to single.
Key characteristics of a simple divorce include:
- Focuses only on dissolving the marriage
- Less expensive initially
- Faster process if both parties agree
- Minimal court involvement
- Does not address property division, support, or parenting plans
Separation Agreements
A separation agreement is a legal contract that addresses the financial and parenting issues after separation. This document outlines how a couple will divide their property and assets, if support is paid (quantum and duration) and parenting plans. It may also contain other terms that the couple wants to include that are unique to their situation.
A separation agreement typically covers:
- Division of assets and debt (including homes)
- Parenting plans - decision making and parenting time
- Child support
- Spousal support
- Insurance obligations
- Tax considerations
- Future dispute resolution procedures
Why a Simple Divorce Isn't Enough
1. Property Division Uncertainties
A simple divorce leaves property division open to future conflict.
Common issues include:
- Unclear ownership of joint property
- Unclear terms about how equity is shared if the home is sold
- Unclear terms about a buy out of the home from one person
- Unresolved debts and repayment
- Unresolved tax obligations - who pays the tax on joint assets
- Disputes over who owns what property
- Complications over businesses both ownership and valuation
2. Financial Security
Without a separation agreement, both parties face future financial uncertainty because they don’t have their financial settlement in writing. Important considerations which would be included in a separation agreement are:
- Spousal support duration and amounts or a release that no amount is owed
- Child support calculations and adjustments
- Insurance coverage
- Retirement account division
- Tax deductions
- Joint account responsibilities
- Credit card debt allocation
3. Future Dispute Resolution
A separation agreement helps diffuse future disagreements. It can:
- Prevent costly future litigation
- Provide clear guidelines for decision-making
- Include mechanisms for dispute resolution
- Address future changes in circumstances
The Cost Factor
While a simple divorce may seem less expensive initially, the lack of comprehensive planning often leads to higher costs in the long run through:
- Future litigation to resolve disputes
- Legal fees for addressing issues that were not resolved or the parties disagree on how they were resolved
- Financial losses as one party may now owe the other a settlement they hadn’t intended. The settlement can be significant and derail the other’s financial goals such as retirement.
Conclusion
While a simple divorce may appear attractive due to its simplicity and lower initial cost, it often proves inadequate for protecting your financial interests. A separation agreement, though requiring more upfront investment of time and fee, provides important protection and clarity for all parties involved. It also provides protection in the event your settlement is ever challenged. A separation agreement is difficult to overturn by a judge when properly drafted in line with family law.
For most couples, especially those with children or significant assets, investing in a proper separation agreement is not just advisable—it's essential for long-term security, wealth protection and peace of mind.
To learn more about your particular situation and how our Simple Separation Templates can help you - book a call here.
LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute legal advice. The information provided in this post is general in nature and should not be relied upon as legal advice or opinion. This content does not create a lawyer-client relationship between the author and the reader. Laws vary by jurisdiction and are subject to change. For specific legal advice regarding your situation, please consult with a qualified lawyer licensed to practice in your jurisdiction.
