According to previous news reports, divorced drivers are paying hundreds of pounds more for car insurance than married drivers.
This may prompt the question of what other differences changing marital status can make and some may even question whether it is worth formalising a divorce if separation terms have been agreed.
Understanding marital status: separation vs. divorce
I am often asked by new clients whether they are "legally separated" and by those who have signed separation agreements whether they should go ahead with a divorce.
There tends to be confusion about the significance of marital status and the concept of separation. Some of this may stem from the differences between the laws of Scotland and of England and Wales.
Whilst it is possible in Scotland to obtain a decree of separation, this is rarely used, with clients generally preferring to seek decree of divorce or dissolution of civil partnership.
In Scotland, whether or not a couple are separated is principally a matter of fact. Rather than define the “date of separation”, the Family Law (Scotland) Act 1985 (which sets out the financial remedies available to divorcing parties) refers to the “relevant date”. “The relevant date” is “the date on which the persons ceased to cohabit” (section 10(3)(a) 1985 Act), with parties to a marriage being held to cohabit with one another only when they are in fact living together as spouses.
So what does it mean to be living together as spouses and when does that change?
In most cases, there is little doubt about this and often it will be the date upon which one spouse moved out of the matrimonial home or moved into a separate bedroom.
This can be contentious in some cases, however, particularly when one spouse works overseas or away from the matrimonial home. Some married couples live quite independent lives and spend little time together. It is not unusual for some couples to sleep in separate bedrooms for extended periods. That may be normal for them. Some couples do not socialise together or go on holiday together. Some are not intimate. None of these factors on their own would indicate conclusively that a couple have separated or that they are no longer living as spouses.
Typically in such situations, I gather information from clients about their circumstances and attempt to determine whether separation has taken place and if so, when.
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What are the legal implications where spouses or civil partners have separated or are no longer living together?
Seperation can have immediate legal and financial consequesces, including:
Ongoing financial support after separation
In some cases, there may be no immediate changes. If they have separated but have not divorced, spouses and civil partners will still have an obligation to financially support each other. This is known as aliment or interim aliment. Spousal maintenance will not always be payable but if there are changes in the financial arrangements following a separation, that may need to be considered whether you are the person who used to pay or receive such support.
Date of separation and division of matrimonial property
In other cases, one or both spouses or civil partners may wish to proceed with the division of the matrimonial property between them as soon as possible. This is one of the reasons that family lawyers will want to establish the date of separation. Any matrimonial assets in individual names should be valued at the date of separation. Similarly, where there are matrimonial liabilities in the name of one of the spouses or civil partners, their outstanding value should be considered at the date of separation.
Resolving matters quickly and amicably
Assuming that they or their spouse wish the separation to be permanent, I then tend to go through possible outcomes and suggest that we attempt to resolve the issues arising from their separation as quickly and amicably as possible.
Separation agreements
Where agreement can be reached the terms are usually documented in a formal contract which is signed by both spouses. These agreements are known as Separation Agreements and they normally resolve all legal matters arising between the couple as a result of their separation, other than the fact that they are married.
Divorce and financial provision
Although “divorce” is not defined in the Family Law (Scotland) Act 1985 either, the largest section of the Act relates to “Financial provision on divorce”. Divorce usually severs the relationship between spouses and typically prevents further financial claims being made.
The goal in matrimonial cases is usually to resolve the financial, property and children issues and to document those in a separation agreement. Divorce can follow but it is not essential.
Undefended and simplified divorce
Where there is a separation agreement which is in full and final settlement of all of the issues arising from the breakdown of the marriage or civil partnership, divorce is often applied for by way of an undefended application to the court or even a simplified divorce action. In such circumstances, the divorce tends to be a formality. The cost of an undefended application to the court is usually higher than a simplified divorce as it is a more involved process and affidavits (sworn statements) are required but it is generally uncontentious and typically concluded in a matter of weeks rather than months or years.
Defended divorce proceedings
Where a separation has been acrimonious, and there is an unwillingness to negotiate, divorce proceedings may be raised and defended. In such cases, if settlement terms are not agreed out of court then the divorce may be granted at the same time as orders are made about financial matters. This happens in a minority of cases.
Financial implications of separation and divorce
It is relatively common for spousal maintenance to cease on signature of a separation agreement or to taper off after that point and before divorce. In some cases, however, regular financial support will continue to be paid after divorce. Such financial support is known as “periodical allowance” after divorce. Where payments are to endure for a substantial period after a separation agreement then provision will usually be made for aliment or periodical allowance to be paid.
Equally there can be a number of reasons for others wishing to divorce, including;
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Cost of divorce
Some clients may hold off on finalising the divorce because they prefer to avoid further cost. An undefended divorce (divorce with children under 16 years old) tends to be more expensive than a simplified divorce (where there are no children under 16) as I have mentioned above.
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Death and divorce claims
Commonly, spouses will discharge any rights and claims that they may otherwise have on death and divorce in the separation agreement. If they have done so, they may be in no hurry to divorce. If they have not discharged such rights and claims in the separation agreement, one spouse may wish to proceed with the divorce as it would be likely to prevent such claims being made later.
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Tax considerations
Separation agreements will usually provide that each spouse will be responsible for their own tax liabilities but there may be tax advantages for continuing to be married, especially if the separated spouses remain in a business relationship.
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Child maintenance and support
As for child maintenance or support, provision will usually be made for this in a separation agreement if the Child Maintenance Service is not already involved. This will endure whether or not parties are divorced.
Social and personal impacts
Common reasons for wanting to divorce include one or both spouses wishing to marry a new partner; one or both spouses wishing to prevent the other from benefitting financially on the death of the other (the surviving spouse may be entitled to receive pension benefits or death-in-service benefits in some circumstances); and one or both spouses wishing "closure" or an end to the failed marriage.
Divorce may be desirable for those wishing to pursue new relationships or just to improve their wellbeing. For others, they may fear severing the legal relationship out of concern that this may impact on their relationship with their children or their social standing. Some estranged spouses may think that it is necessary to divorce in order to revert to a maiden surname but they are mistaken. Divorce is not a pre-requisite to using an old surname.
It is also possible that there may be financial incentives to divorce.
This is the case where the spouses have agreed to enter into a pension sharing arrangement. Pension sharing can only be implemented after divorce and there are strict time limits for implementation. If you have not had independent legal advice and are due to receive a pension share from your spouse on divorce, it is strongly recommended that you consult your own family law solicitor before pressing on with the divorce.
Deciding between separation and divorce
I would be surprised if the possibility of increased car insurance premiums alone was to discourage clients from changing their status from married to divorced but following this recent publicity it may be one factor to be taken into account.
Most family lawyers will advise that it is best to resolve the issues arising from the breakdown of a marriage by negotiation. There are a number of alternative dispute resolution methods available in Scotland. Your family lawyer should guide you regarding the best option for you. If you are fortunate enough to have resolved these issues by agreement, your family lawyer will be able to advise you on the pros and cons of finalising a divorce.
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Learn more about how Brodies’ divorce solicitors can help you understand the legal and financial impact of formalising your separation.
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