The Essential Ingredients to a Good Separation Agreement

One common way to resolve the issues arising out of a separation is for the two parties to enter into a written contract called a Separation Agreement. Court cases are sometimes unavoidable and necessary, but where possible separating spouses are choosing to avoid the Court process and to instead map out their own settlement.

Agreements can be entered into by both common-law and married spouses, as well as by individuals who have a child together but who are not considered spouses. The terms of a Separation Agreement can address parenting issues (including decision-making responsibility and a parenting schedule), child support, spousal support, life insurance and health benefit coverage, division and transfers of property, and other details and issues that are fact specific.

There are a few essential ingredients to negotiating and preparing a “good” Separation Agreement.

First and foremost, it is critical that both parties to a Separation Agreement provide one another with full income and financial disclosure. To do this we ask both parties to complete Financial Statements, which set out each person’s income, assets, and debts at the relevant dates. It is only once financial disclosure is exchanged that both parties can be advised about their respective rights and obligations under the applicable family law legislation. Without this information, parties would be negotiating an agreement without a clear understanding of one another’s finances and how the law applies to their specific situation.

When both parties have completed the disclosure process, the parties are able to begin negotiating a settlement. In situations where there are difficulties reaching an agreement, the parties can choose to engage a neutral mediator to help with the negotiations. Sometimes the parties already have an idea of what they want their Separation Agreement to look like. In those cases, we will review the disclosure and provide legal advice to make sure that nothing has been missed.

Another issue that we are sensitive to is ensuring that both parties are entering into the Separation Agreement of their own free will and without undue pressure from the other party, the lawyer(s) involved, or any other individual. Some compromise by both parties is typical in a negotiated Separation Agreement, but decisions must be made by the parties voluntarily and with a full understanding of their impact.

One lawyer cannot represent both parties to a Separation Agreement, so we are only able to represent one of the parties. Although not necessary, it is helpful for both separating spouses to have independent legal advice on the terms of the Agreement. In cases where only one of the parties has a lawyer, the other party will be encouraged to meet with a lawyer to review the Separation Agreement. If the other party does not want legal advice, they will be asked to sign a document called a “Certificate of Waiver of Independent Legal Advice” in which they acknowledge having had the opportunity to obtain their own legal advice.

Skipping some of the above steps or rushing to a Separation Agreement that is not properly negotiated runs the risk of the Separation Agreement being challenged by one of the parties at a later point. It is not uncommon to meet with new clients who signed a flawed Separation Agreement that they became unhappy with once the dust settled. Courts have set aside entire Separation Agreements, or provisions of Agreements, in situations where full financial disclosure was not provided or where one of the parties was found to have entered into the Agreement involuntarily.

There is always a sense of relief once a Separation Agreement is completed. Clients get the finality that they deserve and a clear roadmap for how to move forward. There may be twists and turns on the path to a signed Separation Agreement, but the time and effort are well worth it for such an important document.

Disclaimer: The blog sets out a variety of materials relating to the law to be used for educational and non-commercial purposes only; the author(s) of the blog do not intend the blog to be a source of legal advice. Please retain and seek the advice of a lawyer and use your own good judgement before choosing to act on any information included in the blog. If you choose to rely on the materials, you do so entirely at your own risk.

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