Separation Agreements: The 9 Most Important Things You Need to Know About Them

Separation Agreements: The 9 Most Important Things



This blog is brought to you by LawyerSelect.ca


There is no question that a separation agreement is an eminently practical way for you and your spouse, or common-law partner, to save bundles of money and time. Typically, estranged couples use separation agreements to settle disputes over spousal support, child support, division of property, and even parenting arrangements. The beauty of a separation agreement is there’s no need to delve into the court system, which I’m sure you know, can get quite costly in a hurry. If you’re looking for a family lawyer to help you draft a separation agreement, we’d be more than happy to assist you at LawyerSelect.ca – where we personalize every lawyer referral we make, ensuring the client’s specifications with respect to experience, cost, gender, location and language are met.

1. So… What Exactly is a Separation Agreement?

Simply put, a separation agreement is a written contract between two individuals who are in the process of separating, or who have already separated, which typically deals with matters like:
  • Division of property – this can include items like the family home, cars, furniture, RRSPs, and even a valuable book collection.
  • Various support obligations – this typically includes both child support as well as spousal support. Alimony is another term for spousal support, but is used mostly in the United States.
  • Parenting decision rights – this can include decision about the children’s lives, from where they live, to what school they attend, to what sport they play.
  • Custody and access rights of each parent – this usually includes a schedule whereby the children’s time is divided between both parents.
  • As well as any other matter which is the domain of family law.


2. Cardinal Rule: Always Make Full and Frank Financial Disclosure

Before an estranged couple can enter into a separation agreement, each side will need to provide the other with full financial disclosure. This has the effect of protecting each spouse by ensuring that they have the financial disclosure they need to make an informed choice about the terms of the separation agreement. Without full and frank financial disclosure, it’ll be impossible to assess how much spousal support is payable, how much child support is payable, as well as other important financially-related matters. In fact, if a separation agreement was made without the exchange of full financial disclosure, than the court will refuse to enforce the terms of the separation agreement, as serious inequities may arise otherwise. The documents that are usually exchanged in the financial disclosure stage include:
  • Bank account statements
  • RRSP account statements
  • Information on any privately held business enterprise
  • The debts and liabilities of each party
  • A formal pension valuation conducted by a qualified accountant or valuation expert
  • The value of all personal property owned by each spouse
  • All other pertinent financial documentation, like overseas trusts or life insurance plans


The sheer volume of documentation that each party receives during this process is immense. In addition, much of the documentation is hard to understand because of its complicated nature. As such, your best bet is to hire a Toronto Divorce Lawyer who can help you through this challenging period.

3. The Issue of Spousal Support in a Separation Agreement

For the most part, when a couple separates in Ontario, the spouse who earns more income and has more assets will usually pay spousal support, also known as alimony, to the other spouse. When including the issue of spousal support in a separation agreement, you should make sure to state exactly how much support the receiving spouse requires in order to meet their needs, versus how much the paying spouse can afford to pay. It is important to note that if spousal support is being waived by the entitled spouse, then we highly recommend that you have a skilled Toronto Divorce Lawyer draft the separation agreement so as to ensure that the spouse’s waiver of the support remains enforceable in law, and will be upheld by a reviewing court. Often times, when the separation agreement tends to favour on party over the other, the courts will view said agreement with a fair degree of caution. The court will want to ensure that there is no significant power imbalance between the parties, so that one party is not taken advantage of by the other.

4. The Issue of Child Support in a Separation Agreement

It is highly recommended that an agreement with respect to child support payments be included as part of the separation agreement. Typically, most child support payments are based off the Child Support Guidelines’ table amount. However, the parties will need to decide how the children’s extraordinary expenses will be dived up. As a general rule, the extraordinary expense paid by each spouse is based off that spouse’s income. Activities that would fall under the extraordinary expense heading include (1) organized team sports, (2) child daycare, (3) university or college tuition. It is important to note here that if the parties deviate from the Guideline amounts in the separation agreement, then they should have said agreement reviewed by a Toronto Divorce Lawyer to ensure that the terms of the agreement are enforceable.

5. Parenting Agreements

If there are minor children involved during the separation, then it makes good sense for the parties to include a written plan on how they intend to co-parent the children, now and in the future. The parenting agreement should plan for topics like:
  • How will decisions that impact the children be made by the parties?
  • How will the parties communicate information about the children to one another?
  • Where will the children primarily reside?
  • What sort of access or custody will the other parent have, and how often will the children visit that parent, and when?
  • How will the issue of holidays be handled? Where will the children spend specific holidays?
  • As well as any other parenting-related issue that properly comes within the scope of a parenting agreement.


6. The Fate of the Matrimonial Home

A separation agreement should always cover the issue of the matrimonial home. What will happen to it? Will it be sold, or if not, who will take ownership of it? Make sure to already have a separation agreement in place before changing or attempting to change, any aspect of the home’s ownership.

7. Always Include an ADR Clause in the Separation Agreement

A well-drafted separation agreement should always contain a clause that deals with dispute resolution. Specifically, the clause should articulate how future disagreements between the parties will be addressed. The clause can be as simple as requiring the parties to attend mandatory mediation or arbitration to settle the dispute. Whatever dispute resolution format the parties agree to, it will almost certainly save them both time and money, which would have been spent on costly litigation.

8. Each Party Should Seek Independent Legal Advice on the Separation Agreement

People usually assume that the weaker party is the one in need of independent legal advice (ILA) so that they aren’t taken advantage of by the stronger party. That’s not always true, however. In fact, it is in the interests of both parties that each receives independent legal advice on the terms of the separation agreement. By ensuring that each party receives ILA, you significantly reduce the chances of one party seeking to set aside the separation agreement on the basis that they did not understood the terms of said agreement. Each spouse needs to retain their own Toronto Divorce Lawyer for the ILA.


9. The Division of Property

A good separation agreement will also include an outline on how the net family property is to be divided, and whether there will be an equalization payment from one spouse to the other. If one spouse agrees to give the other a bigger share of the family property in exchange for another benefit, than the agreement should be specific in outlining all such benefits, and which party they stand to benefit. For example, if one spouse waives their right to spousal support in exchange for a larger share of a very valuable book collection, then that should be clearly documented in the separation agreement.

If you’re looking for a family lawyer to help you draft a separation agreement, we’d be more than happy to assist you at LawyerSelect.ca – where we personalize every lawyer referral we make, ensuring the client’s specifications with respect to experience, cost, gender, location and language are met.


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