What Is a Separation Agreement?
A Separation Agreement is a legal contract between separating spouses or partners which helps the separating parties unwind both their financial and their family-related matters.
Under Ontario’s Family Law Act, for a Separation Agreement to be valid, the partners must have negotiated the agreement freely—without duress or undue psychological pressure exerted by either partner. While it is not mandatory in Ontario, ideally, both parties should receive independent legal advice before signing the Agreement. In addition, to ensure the validity of the Separation Agreement, the parties must be of legal age and must have “full mental capacity.”
As with any contract, the agreement must be in writing, signed by both parties, and properly witnessed. A court can strike down all or part of the Agreement—even if the technical requirements have been met. This may happen if, for example, the Agreement is not clear, if it has failed to adequately anticipate future events or if it gives rise to an unfair outcome.
What Does a Separation Agreement Look Like?
A Separation Agreement between parties outlines certain rights and obligations, such as:
- Ownership in or division of property;
- Child or spousal support obligations;
- Custody of (i.e. parental decision-making) and access with (i.e. parenting time) their children; and
- Other matters related to the settlement of affairs.
Important Considerations During a Separation Agreement
A Separation Agreement should generally include specific information regarding how any issues facing the separating parties are to be resolved. For example:
- Parenting Arrangements: The separated parties will need to agree on a parenting plan that covers how much access or parenting time each parent will have with their children. Who has custody (i.e. parental decision-making) of the children? What does the access (i.e. parenting time) schedule look like? How much time will the children spend with each parent, and when?
- Child Support: The child support amount will be determined by the parents’ income, the parenting schedule, the province where the children reside and the number of children. Additionally, Section 7: Special or Extraordinary expenses will have to be addressed and the proportionate sharing of these expenses would need to be agreed upon. Section 7 Special or Extraordinary expenses may include daycare, private school, special needs programs, or particularly expensive extracurricular activities.
- Dispute Resolution: How will future disputes be resolved? Will the parties hire a mediator or an arbitrator to assist them with resolving their disputes?
- Spousal Support: Will there be any spousal support paid from one party to another? How much will it be? For how long?
- Property Division: How will the family property be divided?
- Matrimonial Home: Will it be sold? How will the payment be distributed/divided? What are the responsibilities if one spouse decides to stay in the family home?
- Debts: Who has what debts? How will they be paid out?
- Pensions: If either party has a pension, agreements regarding that pension should be set out.
How Can a Separation Agreement Be Overturned?
Even though a well-done Separation Agreement can stand the test of time, there are some conditions where a Separation Agreement may be overturned. Some examples are:
- If one party failed to make full financial information (i.e. failed to disclose some assets, debts, income, etc.);
- If it becomes clear that one party has failed to understand the nature and/or consequences of the Agreement; or
- If the Agreement is not in accordance with the law.