Separation Agreement FAQ - Canada

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A separation agreement is a written contract made between married couples who intend to separate from each other. The contract documents specific details of how the spouses agree to separate.


Contents

General

What is a separation agreement?

A Separation Agreement is a contract between two parties and is therefore governed by the law of contract. The contract is binding on both parties and any failure to execute by either party may bring a claim for breach of contract. However, a court may set aside or not enforce an agreement that is unfair or unreasonable or where child support or spousal support is inadequate.

What is addressed in a separation agreement?

The following items may be addressed in a separation agreement:

  • custody and access;
  • spousal support;
  • child support;
  • child maintenance;
  • debts; and
  • property division.

Why do we require a separation agreement?

If you are planning to separate, then a separation agreement can help you address issues on custody, maintenance and family assets instead of having to go to court to resolve such issues. In this way, you will be avoiding costly litigation fees.

Will my separation agreement be legally recognized?

In most cases courts will respect the separation agreements of spouses as long as such agreements are fair, reasonable and properly executed.

When will a court refuse to recognize a separation agreement?

Courts are likely to refuse to recognize your separation agreement in the following situations:

  • the terms of the agreement are not in the best interest of your children;
  • a spouse has not fully disclosed certain assets or liabilities; or
  • the separation agreement is plainly unfair (e.g. one spouse waives his/her right to support without compensation).

Who should use this Separation Agreement?

This separation agreement is intended for spouses who can agree on a separation agreement and who are willing to accept such a settlement. However, if your circumstances involve complicated property distribution schemes, significant assets or complex issues related to children, it may be best to seek expert legal advice.



Marriage Information

Who is considered a spouse?

For the purposes of this separation agreement spouses are individuals who are legally married and who are separated or considering separation.

Can we use this agreement if we are living common-law?

This separation agreement is intended for married couples only. This document may not be suitable for common-law couples.

What happens if my spouse and I should later reconcile?

You and your spouse should draw up another agreement canceling the separation agreement. LawDepot’s separation agreement comes with the clause “If the Husband and Wife reconcile, the terms of this Agreement will remain in effect unless the parties revoke it in writing.”



Child Custody

What does “custody” mean?

For the purposes of this separation agreement, the parent who has custody is the parent who has the care and control of the children. The custodial parent has the right to decide matters regarding the health, education and welfare of the children.

What does “access” mean?

Access or visiting rights typically refers to time that the non-custodial parent gets to spend with the children.

Can the court change our custody arrangement?

Courts can always change custody arrangements if the arrangements do not seem to be in the best interests of the children.

How do I describe the visitation schedule?

If you and your spouse are both on good terms and have little problems agreeing on visitation, it may be sufficient to provide a general description of visitation (e.g. “The Wife will have reasonable and generous access.”) On the other hand, if you and your spouse have difficulties coming to agreements, it is best to clearly specify the visitation schedule. Set out the arrangement for regular visits, holiday and school visits as well as pick up and drop off schedules. Ensure that your description is clear and capable of being understood by third parties. Also, ensure that the schedule is fair and reasonable to prevent it from being challenged by the courts.



Child Support

What is child support?

Child support refers to monetary payments that are paid on an ongoing basis for the support or maintenance of a child or children. While each parent has a legal obligation to support their children it is usually the custodial parent who incurs most of the expenses of child rearing (including providing housing, food, clothing, schooling and transportation). To offset this imbalance, the non-custodial parent is expected to contribute to their children’s expenses in the form of child support paid to the custodial parent.

How often is it necessary to pay child support?

Child support is typically paid in monthly installments, however, LawDepot’s separation agreement allows for weekly, bi-weekly or monthly installments.

How much child support do I have to pay?

In Canada, child support is mandated by the Federal Child Support Guidelines and the Federal Child Support Tables. The Federal Child Support Guidelines together with the Federal Child Support Tables, are a set of rules and tables for calculating the amount of support that a paying parent should contribute towards his or her children upon separation or divorce. The guidelines consider 3 factors:

  • the annual income of the paying parent;
  • the number of children eligible for child support; and
  • the province or territory where the paying parent resides.

The child support guidelines represent the minimum amount of child support that must be paid by the paying parent. A paying parent can always pay more than the guideline amount but only in rare situations can the paying parent pay less.

Where can I find out more about the child support guidelines?

You can find out more about the child support guidelines at: http://canada.justice.gc.ca/eng/pi/sup-pen/

Where can I access the child support tables?

You can access the child support tables at: http://canada.justice.gc.ca/eng/pi/sup-pen/grl/pdftab.htm

Can we agree to child support payments less than that provided in the Child Support Guidelines?

Agreements that provide for child support less than that specified in the child support guidelines may not be recognized by the court. Furthermore, for couples wishing to divorce, such agreements will likely prevent the granting of a divorce order.



Spousal Maintenance

What is spousal maintenance?

Spousal maintenance or alimony is financial support that is sometimes paid by one spouse to the other spouse when their marriage or common-law relationship breaks down. The idea behind spousal maintenance is to redistribute wealth such that one of the spouses does not face economic inequality at the end of the relationship.

What is the difference between spousal maintenance and child support?

Spousal maintenance is not the same as child support. Child support is a financial obligation where one parent has a duty to make payments for the support of his or her children whereas spousal maintenance refers to payments made to a spouse in order to relieve financial inequality at the end of a relationship. Children, being the responsibility of both parents are always entitled to child support whereas spousal support is usually dependent on need and ability to pay.

Does the law treat child support payments and spousal support payments differently? What are the tax implications?

The law treats child support payments and spousal payments differently. Child support is not a payment that affects taxes. The payment is not deductable by the person paying child support and is not viewed as taxable income by the person receiving the payment. In contrast, spousal maintenance is usually tax deductable for the spouse that is paying and is treated as taxable income by the spouse receiving the payment.

What considerations should we take when deciding how much and how long spousal maintenance is necessary?

You may want to consider the following factors when addressing spousal maintenance:

  • Length of the marriage – Usually the longer a couple is married, the longer one spouse becomes financially dependent on the other.
  • Former standard of living – Generally courts like to see the financially dependent spouse live according to the standard of living he/she has become accustomed to during the marriage.
  • Future financial prospects of the paying spouse – Spouses who are likely to be earning more in the future are often expected to pay more spousal maintenance.
  • Future financial prospects of the receiving spouse – Spouses who are not likely to earn as much in the future, may require more maintenance.
  • The age and health of the receiving spouse – Younger spouses who are in good health are generally viewed to require shorter periods of support as they can still enter the work force and find a means of providing for themselves. On the other hand, if the spouse is older or in poor health, they may require more support as they may not be as likely to provide for themselves.
  • Whether the receiving spouse made any contributions to the paying spouse’s education or career – If the spouse who is requiring support has made contributions to the other spouse’s career, or has suffered economic disadvantage because of a career compromise (i.e. raising children of the marriage), then that spouse can usually be expected to be compensated accordingly by the other spouse.

Are there any spousal maintenance guidelines that must be followed?

While there are no official guidelines on spousal maintenance, there is the “Spousal Support Guidelines: A Draft Proposal”. While these guidelines are not binding, courts across Canada have used the formula recommended in the guidelines. For more on these guidelines, you may wish to go to: http://justicecanada.ca/eng/dept-min/pub/ss-pae/proj/index.html

Am I legally entitled to spousal maintenance?

Spousal maintenance, unlike child support, is not necessarily guaranteed. It is usually dependent on the receiving spouse’s need and the paying spouse’s ability to pay. That being said, if your agreement provides for no spousal maintenance you should be extra careful before signing the agreement as it may be difficult to obtain later on should your circumstances change.



Property

How should we go about dividing our property?

You should sit down with your spouse and discuss how you wish to divide your assets. There are several ways to divide your assets which will depend entirely on your set of circumstances. Some couples may be content to leave the relationship with property that is held solely in their name. Other couples may see such a distribution scheme as unfair and they may want to want to equalize the value of what each spouse receives instead. The most important thing to remember is to be open and honest, disclosing all assets. Below are some suggestions to help you get started:

  • Come up with a list of all your assets – List all assets that you own jointly.
  • Appraise the value of your assets – Put a price on the assets you are distributing. For larger assets such as real estate (or anything else that may be difficult to value), you should seek an expert opinion.
  • Decide who will get what – Is there a logical owner to certain property? Go through your list of assets and choose who has a reason for receiving the item. You may want to consider exchanging one larger item for several smaller items to ensure an equal split.

What assets should be considered?

A list of assets can be found on our Property Division Checklist.

What are family assets?

Family assets are those assets that were used during the marriage for a family purpose. The family home, the contents of the family home (i.e. furniture) and the family car are all examples of family assets. Other assets such as RRSPs, annuities, savings accounts, pensions and contributions made to Canada Pension Plan will also be family assets if they were ordinarily used for a family purpose.

Does the law say anything about the division of family assets?

Generally, family assets and liabilities must be divided equally except when it would be unfair to do so. Parties can apply to the court if they feel that equal distribution would be unfair. Courts will generally look at a number of factors to determine whether equal distribution is unfair. These may include:

  • the length of the marriage;
  • the role each spouse played in the marriage;
  • how the property was acquired (e.g. property acquired by one spouse as a gift or inheritance may be divided unequally); and
  • the relationship each spouse has to the matrimonial home.

Can a business be a family asset?

A company that is owned by one of the spouses will be a family asset if the other spouse has contributed monies to the company. However, it’s also possible for a spouse’s business to be considered a family asset even if that business doesn’t have any obvious connection with assets used by the family. The law recognizes that spouses who assume all or most of the child-rearing and homemaking duties have indirectly contributed to the business owned by the other, by allowing the other spouse the time to pursue and build up the business.

What are extraordinary expenses?

For the purposes of this agreement, extraordinary expenses may include:

  • child-care or day care expenses;
  • the child's health-care needs over and above that covered by insurance (for example, orthodontics, counseling, medication, eye care and other items);
  • the child's expenses for extracurricular activities;
  • the child's expenses for primary and secondary education or other educational programs; and
  • the child's expenses for post-secondary education.

What is cost percentage?

Cost percentage refers to the percentage each parent will contribute to their child’s extraordinary expenses. Typically these costs are shared in proportion to each parent’s income. For example, if the mother earns $40,000 a year and the father earns $60,000 a year the father will bear 60% of the extraordinary expenses while the mother will bear 40% of the extraordinary expenses.

Do I have to disclose all my assets?

Yes. You MUST disclose all assets to your spouse. Your separation agreement may become invalid if you do not disclose all your assets.



Miscellaneous

How do I enforce my separation agreement?

Separation agreements are private contracts so they can be enforced according to contract law principles (i.e. taking the other party to court if the terms of the agreement are not complied with). Some jurisdictions also allow you to file a separation agreement with the court. Once filed, it may be possible to enforce the agreement as if it were a court order. You should consult with the court registry in your jurisdiction to determine whether your agreement can be filed.

Signing Details

Do I need to show this separation agreement to a lawyer before it is signed

While it is not absolutely necessary to have a lawyer review your separation agreement, it is a good idea. This is especially the case if you are confused or uncertain about any of the clauses. If you require a review, ensure that you have your agreement reviewed by your own lawyer (not your spouse’s) before you sign the agreement. Getting independent legal advice is also a good idea because it prevents parties from later saying they were at a disadvantage because they didn’t understand the agreement.

Who can I choose as a witness?

You must choose a competent adult as your witness.

How many copies of the separation agreement do we require?

You require at least two copies: one for yourself and one for your spouse. Ensure that you print copies of the agreement before you sign the agreement so that each copy will have an original signature.