Separation Agreements
November 8, 2011 § Leave a comment
Separation agreements are formal agreements entered into by both spouses that provide for the arrangements between parties upon separation or divorce. Such agreements include provisions regarding the division of property and set out the financial and support responsibilities of each spouse on an ongoing basis. Most courts prefer that spouses enter into a separation agreement as opposed to engaging in the family court system because the spouses are more capable of entering into an arrangement that will fulfill their needs than a Judge would be at ascertaining these needs and making an order that would meet them. Additionally, many couples enter into separation agreements because court proceedings can be expensive and time-consuming. Separation agreements also provide parties’ with a larger role in shaping their post-separation family. Separation agreements can resolve issues in a matter on a final or interim basis, depending on the needs and desires of the parties.
Each spouse is represented by separate legal counsel, who usually works together to draft and revise the separation agreement following discussions between the parties and/or their lawyers. If one spouse is not represented by legal counsel, that spouse must take the draft of the separation agreement to be reviewed by an independent lawyer prior to signing the agreement. One of the safeguards of a separation agreement is the Certificate of Independent Legal Advice, wherein each party’s lawyer signs off to indicate that they have provided their client with their objective legal opinion regarding the contents of the separation agreement. This is why each party requires a lawyer in order to execute a separation agreement.
If the parties are having difficulty coming to a consensus regarding any of the issues in the agreement, they may want to seek the assistance of a mediator, who can assist them in coming to a compromise. This can be done by the parties on their own, or with their counsel.
Once the spouses have agreed upon the final draft of the separation agreement, they must both sign the agreement in the presence of a witness. The witness must then sign the agreement to certify that the spouses both signed the agreement.
During the process of drafting a separation agreement, the spouses must disclose all financial information, including assets, debts, liabilities, and income, to the other spouse. Failure to do so can result in a court later setting aside the separation agreement. Additionally, this financial disclosure is required by the lawyers in order to formulate their objective, legal opinion in order to provide independent legal advice. It is impossible for a lawyer to comment on the fairness or desirability of an agreement without examining the other party’s financial circumstances.
One of the benefits of a separation agreement is that it can be crafted to meet each family’s unique needs. However, some typical terms included in separation agreements are as follows:
- Date of separation
- Child custody information, including:
- Which spouse will have custody (meaning decision-making authority regarding the children)
- Where the children will live, or their “residence”
- Access arrangements, including not only the general access schedule but also provisions regarding holiday and vacation times
- Child support information, including:
- The amount of child support payable
- Duration of child support payments
- Timelines for the exchange of financial disclosure for future years
- Spousal support information, including:
- Which spouse will pay support
- Duration of support
- Amount of spousal support payments
- Whether support is waived
- Property division agreement, including:
- Who gets which assets
- Sale of property
- Who makes an equalization payment to whom and the quantum of the said payment
- Provisions regarding the matrimonial home (disposition and possession of same)
- Information regarding outstanding debts:
- List of current outstanding debts, including credit cards, loans, and mortgages
- Responsibility for each debt (i.e. which spouse will assume which debts)
- Information regarding debts incurred after separation but prior to final divorce decree
- Information about pensions and other retirement accounts
Failure to include any of the above information can result in one of the spouses later filing suit in court to resolve an issue related to the separation, as it was not covered in the agreement.
For more information on separation agreements and other family law matters, please visit MyOntarioDivorce.com or BermanBarristers.com.
Sincerely,
Robert Berman B.C.L, LL.B
Founder & Family Law Lawyer
Domestic Contracts
October 25, 2011 § Leave a comment
Domestic contracts are agreements between two spouses, or cohabiting partners, that define the boundaries of a marriage, living arrangement or separation. There are three main forms of domestic contracts:
- Marriage contracts,
- Cohabitation agreements, and
- Separation agreements.
Marriage contracts, also referred to as pre-nuptial agreements, include the terms of a divorce or separation, should the marriage breakdown. Such agreements are typically signed prior to entering into a marital relationship, although they are sometimes signed during the marriage relationship. These contracts define the terms of:
- Ownership and division of property
- Spousal support
- Right to choose the education and moral training of any marital children
Marriage contracts cannot define the terms of child custody, child visitation, or child support. However, because educational, religious, or moral training are decisions that can be made prior to a child’s birth, such decisions may be agreed to by the contract.
Parties often enter into a marriage contract when they want to protect any assets they own prior to marriage, or when one party earns a significantly higher income and wishes to keep this money upon divorce. A marriage contract is often necessary in the following situations:
- One of the spouses already has an estate plan that he or she does not wish to disturb
- The marriage is a second marriage for one or both of the spouses
- One of the spouses owns significant assets or a business prior to marriage
- One of the spouses already owns the property that will become the matrimonial home during the marriage
- One of the spouses is the sole provider for an elderly parent or other dependent relative
- One of the spouses earns a significantly lower income than the other spouse due to the relationship
Marriage contracts can protect the assets of a wealthy spouse, the financial security of a spouse who earns less money, or if a spouse has foregone a career due to the relationship. Additionally, in situations where the marriage is a second marriage and one spouse must pay spousal or child support to another, or where one of the spouses provides financial support to an elderly relative, a marriage contract can serve to protect the interests of these dependent third parties.
For a marriage contract to be valid and to be upheld by a court upon divorce or separation, the following requirements must be met:
- The agreement must be written, signed, and witnessed
- Each party must fully disclose all assets, debts, and liabilities
- Each spouse must obtain independent legal counsel, even if there appears to be no disputed issues
- The parties must make their intent clear on the face of the agreement
- There must be no fraud, undue influence, duress, or unconscionability
If any of these requirements are not met, the marriage contract can be challenged and may not be upheld upon divorce. The province of Ontario recognizes marriage contracts from other jurisdictions if such contracts meet the above requirements and complies with Ontario law.
Because the laws governing married couples do not apply to unmarried cohabiting couples, it is often wise to enter into a cohabitation agreement if you plan to enter into a long-term cohabiting relationship with another without getting married. A cohabitation agreement is a written contract where the parties agree to the division of property, support, or other matters if the parties later terminate the relationship. If a cohabiting couple later severs their relationship, the rules governing property division will not automatically protect the rights of the parties. Therefore, entering into a cohabitation agreement allows a couple to determine their rights upon separation prior to cohabitation.
Cohabitation is defined by the Family Law Act as the state of living together in a conjugal relationship, whether within or outside of marriage. When looking at whether two parties continuously cohabit, courts will consider the following factors:
- Common shelter
- Sexual behavior of the parties
- How the parties behaved socially
- Services the parties performed for each other
- Economic relationship between the two parties
Under the Family Law Act, only parties that are found to be cohabiting are permitted to enter into cohabitation agreements.
The requirements for a cohabitation agreement are similar to those for a marriage contract. For a cohabitation agreement to be considered valid, the following requirements must be met:
- The agreement must be written, signed, and witnessed
- Each party must fully disclose all assets, debts, and liabilities
- Each spouse must obtain independent legal counsel
- The parties must make their intent clear on the face of the agreement
- There must be no fraud, undue influence, duress, or unconscionability
If a couple enters into a cohabitation agreement and they later decide to marry, the cohabitation agreement will automatically become a marriage contract.
Separation agreements are a third form of domestic contract that are entered into at the termination of marriage, rather than prior to entering into a marital or cohabitation relationship. Separation agreements provide for the division or property and set out the financial and support responsibilities of each spouse following divorce.
For more information on domestic and other family law matters, please visit MyOntarioDivorce.com or BermanBarristers.com.
Sincerely,
Robert Berman B.C.L, LL.B
Founder & Family Law Lawyer
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