A Separation Agreement is a legally binding contract between two people living together (common law or married) or having children together, and they have decided to separate. An accurately drafted Separation Agreement is equivalent to a Court Order and equally enforceable. 

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The Agreement will deal with the property division, including a matrimonial home, the equalization of assets, Child and Spousal Support, decision-making authority, parenting time, and all necessary estate and property releases. Full financial disclosure is exchanged between the parties to ensure that the Agreement is fair and accurate. The Agreement should focus on protecting your rights.

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The Family Law Act sets out the rules that make a Separation Agreement binding. In basic terms, the rules are:

1. The Agreement must be in writing and witnessed.

2. The parties must understand the Agreement.

3. There must be an exchange of complete financial disclosure.

 

An Agreement can be set aside if these conditions are not met or if one of the parties claims that he/she was oppressed or was acting under duress when signing the Agreement. 

 

Part II - Cohabitation Agreements/ Marriage Contracts: 

Cohabitation Agreements and Marriage Contracts are binding Agreements that essentially protect your assets in the unfortunate event of a separation from your partner in the future or in the event of death. It allows you to retain certain property and/or investments brought into the marriage or cohabitation.

 

These agreements also allow the parties to determine in advance how their assets will be divided upon separation. A matrimonial home is an exception here. Section 4(1) of the Family Law Act removes the value of a matrimonial home as a date of marriage deduction. In other words, if you bring a home into the marriage, upon separation, you will have to divide the total equity of that home without deducting the date of marriage equity. These Agreements must include complete financial disclosure to ensure that the Agreement will not be set aside if contested at Court. Cohabitation/ Marriage contracts can be very complex depending on the clients' assets and income circumstances. 

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The Court can set aside these Agreements if demonstrated that there were problems surrounding the negotiation of same. For example, if one or both parties did not have legal advice or one of the parties claimed oppression and/or duress, the Court can set the Agreement aside. If the negotiations were rushed and did not adequately allow one or both parties to understand what they were signing again, a Court could set the Agreement aside.

 

We strongly recommend that people hire a lawyer to draft these Agreements, whether for separation or marriage. A lawyer will give you legal advice and ensure all the necessary financial disclosure is exchanged to maintain the validity of the Agreement. A family law attorney will be familiar with all the required releases in the Agreements to protect your future assets and/or estate in the event of a separation.