If you are separating from your spouse, there are certain laws that you should understand in regards to separation agreements.
Without a proper Separation Agreement, you could be headed towards decades of legal troubles and unnecessary expenses down the road.
Fortunately, a solid separation agreement will protect your rights and let you know what you’re responsible for once the separation is made official.
Let’s take a look at:
- What A Separation Agreement Is Legally Considered
- Elements Every Separation Agreement Must Have
- How to Ensure YOUR Separation Agreement is Legally Binding
- Mistakes That Can Derail the Process
What A Separation Agreement Is Legally Considered
Let’s start with the basics.
A separation agreement is a contract between you and your spouse.
It details how you will divide your property and assets, as well as care for your children. Essentially, it’s a legal blueprint to live by when you’re no longer living together, but not yet divorced.
NOW…
If you live in Ontario, and are looking to separate from your spouse,
You’ll want to have a strong Ontario legal separation agreement in place.
Why?
Because understanding separation with children or assets can prevent you from spending thousands in legal fees. Not to mention, it can protect you in the future.
Curious to learn more?
Approximately 38% of marriages end in divorce.
That means almost 4 out of every 10 couples will need to understand separation laws in Canada.
With a separation agreement, you have the power to decide how your separation will play out.
You and your spouse can agree on who gets what property. Who pays for what debts. And who the children will live with.
Instead of leaving these decisions up to family court judges.
Why You Don’t Need A Separation Agreement To Be Legally Separated
While separation agreements are highly recommended, you actually don’t need one to be legally separated in Ontario.
In Ontario, a couple is considered legally separated once they begin living “separate and apart” with no intentions to reconcile.
That being said, if you get into a disagreement with your spouse down the road? You’ll wish you had a separation agreement to fall back on.
Elements Every Separation Agreement Must Have
As you can imagine, not all separation agreements are created equal.
In order for your agreement to be thorough and comprehensive, there are certain elements you should include.
Let’s review…
Property Division
Dividing your property.
This section will typically be the most substantial and detailed portion of your separation agreement. Everything you own should be addressed.
That includes real estate (primary residence and others), bank accounts, vehicles, debts/liabilities, and pensions/RRSPs.
As mentioned earlier, married couples in Ontario are presumed to split their net family property accumulated during marriage equally. You can, however, agree to divide your property any way you see fit.
Keep in mind, you only have six years from date of separation (or two years from divorce) to make a claim for property. If you wait too long, you could lose your right to make a claim entirely.
Support Obligations
The next part of your separation agreement will involve support.
Just because you and your spouse are separating, doesn’t mean financial matters end.
Who’s paying? Who’s receiving? How much? How often?
These are details you’ll want to include in your agreement.
Spousal support – Who pays, amount, duration
Child support – Refer to Child Support Guidelines
Payment details – due dates, payee information, etc.
Hint: Separation agreements average between $5463 and $7014 CAD. Couples with kids pay on the higher end of the range due to increased complexity.
Parenting Responsibilities
If you have children with your spouse, they need to be mentioned in your separation agreement.
The agreement will need to outline decision-making responsibilities, parenting time, holidays, and how children will be supported.
Remember, the court takes every couple’s children’s best interest seriously. You’ll want to show that you and your spouse have considered what is best for your children.
Debt Responsibility
Last but certainly not least, who is responsible for your debt?
Throughout your marriage, chances are you accumulated debts.
Credit cards, mortgages, loans, lines of credit.
You name it.
If not addressed in your separation agreement, your debts could come back to haunt you.
Make it CLEAR who is responsible for what debts.
How To Ensure YOUR Separation Agreement is Legally Binding
Okay, so you know what should go in your separation agreement. But how do you make it legally binding?
Keep reading….
Here are three things you should do when creating your separation agreement.
Full Financial Disclosure
Both parties involved must fully disclose all financial information to each other. If you hide assets or lie about your financial situation, you could invalidate your separation agreement.
Independent Legal Advice
Both you and your spouse should have your own lawyers look over the agreement.
While not always required, having separate lawyers review the separation agreement will protect you if the other person tries to say that they didn’t understand the agreement when signing it.
Get It In Writing (and witnessed)
A handshake won’t cut it. Once you and your spouse have agreed on every aspect of your separation, reduce it to writing and have it witnessed.
You can even file your separation agreement at the court (FORM 26B) for FREE. Doing so doesn’t make it official, but it does allow the courts to enforce the agreement should your ex decide not to follow through with certain terms.
Simple Mistakes That Can Derail Your Agreement
Creating a separation agreement shouldn’t be difficult.
However, there are some silly mistakes that people make when putting their agreement together.
Don’t be that person.
These include….
Using a Premade Separation Agreement Template
Stop right there.
Sure, these templates cost $30 and are super convenient.
However, they’re also one size fits all. And chances are your separation will have details that need individual attention.
Don’t risk it.
Skimping on Legal Review
This can’t be stressed enough. You should ALWAYS have your separation agreement reviewed by a lawyer.
You think you’re saving money by not having a lawyer review your separation agreement? Think again.
When things go south (and they usually do) you’re going to end up spending much more on legal fees to correct your “do it yourself” separation agreement.
Being vague
“I agree to pay him”…
“Indecisive”
“That we’ll figure it out later”
A separation agreement is a legally binding document. Leave the vague terms out.
Not Considering Tax Consequences
When you separate from your spouse, it comes with major tax implications.
Who gets to claim the children as dependents? How will spousal support payments affect you?
Consider how taxes play a role in your separation agreement.
Not Updating Your Separation Agreement
Okay, so you and your spouse create a separation agreement.
Everything is peachy.
But life changes.
Kids grow up and leave the nest. People switch jobs and earn different incomes.
Your circumstances can change after your separation agreement is signed.
Ensure there are provisions in your agreement that address material changes.
Some couples will even add in clauses that require arbitration/mediation when disputes arise.
Making Your Separation Agreement Official
Congratulations. You created your separation agreement. Both you and your spouse signed it. Now what?
Well, now you can choose to file it or not.
If the two of you can adhere to the terms of the agreement on your own, you don’t need to make it “official”.
However, if you would feel better storing a copy with the courts – go right ahead.
You do not need to file a separation agreement with the court to “finalize” it.
Keep in mind, separation agreements do not divorce you from your spouse.
In order to divorce, you’ll need to apply for a divorce after at least one year has passed from the date you separated.
If you do decide to divorce in the future, having a separation agreement will make things much simpler.
You’ve already laid out the groundwork.
How to Write Your Separation Agreement Bottom Line
Ok, last thing..
A separation agreement is a crucial step when separating from your spouse.
It lays out the ground rules. Provides clarity. And will protect you if things go south with your ex.
Make sure your agreement has the following:
- A comprehensive property division section
- Clear support obligations
- Details parenting arrangements
- Clearly defined debt responsibility
- Full financial disclosure from both parties
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