You’ve separated. Maybe you were married. Maybe you were common-law or cohabiting spouses. Maybe you had kids together and maybe not. Maybe you owned a house or acquired other assets during your relationship, and maybe not.
Maybe you had a cohabitation agreement or a marriage contract setting out your mutual responsibilities and rights before you entered into the relationship: but (in our experience) most likely you didn’t. When you started your relationship, you both felt confident it would last. That you were together for good. That you wouldn’t need to protect yourself in the event of a split that was never going to happen. You trusted each other. And you probably had other pressing costs (maybe a wedding and a honeymoon; maybe a house purchase) which meant incurring legal fees was not your top priority back then.
And now that you’re separating you are pretty sure that you do need a separation agreement. But with your previous incomes stretched thin over two households, it’s understandable that once again you would prefer not to incur legal costs in preparing a separation agreement.
So: can you prepare your own separation agreement? Of course you can. The Family Law Act stipulates only that any “domestic contract” must be in writing. It needs to be signed. It needs to be witnessed. Those three requirements aren’t too difficult. And maybe you can borrow a precedent from a buddy. Or find something on the internet. Free.
Should you prepare your own separation agreement? Likely not. How solid will that separation agreement be, if down the road one of you changes your mind and wants to challenge it? If one of you got a better deal than a court likely would have ordered? If the separation agreement significantly deviates from the typical range of support or the expected arrangements for property that the applicable law would have anticipated to be fair and reasonable?
Short answer: if there has not been full financial disclosure from each of you, and independent legal advice for each of you to ensure both of you understood the nature and the consequences of the contract, then there is a strong chance it may be "set aside". The separation agreement could also be set aside if a court were to find that there was imbalance of bargaining powers between you, or some form of “unconscionability” or undue influence or mistake or misrepresentation.
Complete financial disclosure is very important. At Anderson Adams we prepare for our client the same sworn financial statement (together with the documentary financial disclosure backing up the financial statement) as would be required in a court of law. And that’s what we look for from the other party to the separation agreement as well. Those financial statements offer evidence of both income and assets (net of debt).
Your income disclosure will be relevant to determination of child support and in some instances spousal support: whether you were married or not.
If you were married, your separate financial statements will determine equalization of your net family property: what each of you acquired between date of marriage and date of separation. It’s not just about splitting the equity in the matrimonial home, if there was one. For example, very often when pensions are valued it becomes apparent that the pension one of you earned was the biggest asset of the marriage.
If you were not married, then upon separation your property entitlements are still different in Ontario than those of married couples. But that difference is narrowing. For common law couples, even though “equalization” is not formally applicable in Ontario, you may still have (or need to face from your former partner) a significant property claim. Maybe the two of you engaged in a “joint venture” or maybe there is an equitable trust claim by one of you against the property that the other acquired during your cohabitation.
And that’s not all. While we are working with our own client, we do our best to be alert always to those other more intangible issues in contract law which can lead to a domestic contract being set aside: duress, coercion and the like. That’s because separating is an emotional business for most people, and our legislation recognizes that at least one of you may be experiencing significant vulnerability and distress at the time you enter into your separation agreement (or other domestic contract).
A separation agreement that will stand up requires more than just signing a chunk of paper. Preparing a solid separation agreement depends upon constructing a strong foundation for your agreement in your particular and unique circumstances. That foundation depends upon your full and candid financial disclosure together with independent legal advice which is sensitive to all the principles of contract law that apply to you.
Whether you wanted the separation or not, if your relationship is over you want the legalities to be over. You want an agreement which offers you the best assurance that you won’t need to engage in a litigated “set aside” in the future: the strongest possible separation agreement. Building the strongest possible separation agreement requires a solid foundation of full financial disclosure and independent legal advice. That’s what we can offer you at Anderson Adams.
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