Understanding Ontario’s Separation Agreements: An Ultimate Guide

What is a Separation Agreement?

A separation agreement is a legally binding document that outlines the terms agreed upon by a married or common-law couple when they decide to live apart but do not want to yet divorce or are unable to do so. Technically, it is not a legally binding document in its own right but is instead governed by other laws. However, ever since the Ontario’s Family Law Act made them an "express exception" to the law prohibiting family arbitration, the courts have upheld these agreements in their own right as they contain the kind of detail and specificity the courts can rely upon.
The purpose of the separation agreement is to set out the terms of the relationship during the period of separation – which may be several years – and to preferably anticipate and agree upon what changes may need to be made in the future so they can be implemented easily without having to go through litigation or other forms of legal disputes .
A properly drafted agreement is one that has had its terms negotiated between the parties, and it only works if both parties are able to freely give their consent to enter it, meaning they fully understand what they are agreeing to, and understand, on some level, how everything could unfold in the future. It can provide very specific details for matters such as:
The agreement can also cover a wide range of issues including psychological and physical abuse, property settlement, living expenses, insurance coverage, retirement accounts, real estate, liability for debt, and pension plans.

Key Elements of a Separation Agreement in Ontario

A comprehensive understanding of what a separation agreement entails is essential for those going through the separation process in Ontario, and for those whose partners are doing the same. To begin with, you have to understand what the document does, why you need it, and what to include when creating one. We’ll provide the answers to all of those questions in this blog. Separations are never pleasant, but they can be made easier through a solid separation agreement. The CBC explains that "a separation agreement is a legally binding contract between two people who were formerly in a relationship." It’s similar to a prenuptial agreement, but assumes that the couple in question has already been married or living together. While you might not feel as if this document is necessary when a separation seems amicable, it’s a smart idea to include it in this stage of the proceedings. You don’t want to revisit the issue once the legal dust has settled. Even when children are not involved, the terms of a separation agreement are extremely useful for addressing issues when they occur. A separation agreement should be handled by an experienced family lawyer who can help draft and solidify the details of your separation. Exactly what you’ll need to include in your separation agreement depends on your circumstances. However, every solid agreement will cover property division, spousal support, and child custody arrangements.
Property Division
Property division is one of the strongest pulling elements of a separation agreement. Most people are unhappy with the idea of walking away with less than their fair share, particularly when their partner has so much more than they do. In many cases, your possessions and income are tied up in a variety of complex ways. In a fair separation agreement, debts, property, pensions, and RRSPs should all be considered. In an agreement that is potentially lacking, the terms may not be broken down as they should be, or the split may not be even. Your family lawyer can work with you to divide everything fairly.
Spousal Support
Every relationship is different, so alimony or spousal support will vary as well. In the spirit of fairness, Ontario laws dictate that married or common-law couples who decide to separate must continue to care for one another financially where that care is required. This is especially true where there have been children involved, or where one former partner has earned significantly more over the course of the relationship. The thought is that the person who has earned more enjoyed a number of lifestyle benefits and should therefore smooth the transition by providing the other person with support for a period of time. Court rules dictate how much and how long this financial support should last. Again, a family lawyer should be consulted to ensure that the terms of agreement are fair for both parties.
Child Custody Arrangements
While there is certainly the potential for one or both partners to already have children from previous relationships, in most cases, child custody arrangements will only apply to children borne during the union. Again, the law seeks to maintain balance. In the event two parents are equally capable of providing for and rearing their offspring, there’s no reason to prevent either from sharing this responsibility. However, in some cases, it may be safer for your child to live with just one parent, or in close proximity to one parent. Enforcing a supervised visitation schedule can be tricky, as can determining the primary residence for children. Your family lawyer can help ensure that your children are taken care of and that they follow the plan outlined by the separation agreement.

The Legal Must-Haves in Ontario

In order for the separation agreement to be legally valid in Ontario, the parties must have the legal capacity to contract as defined by statutory law and common law rules. Before entering a separation agreement, individuals should be certain that they are both exercising sound judgment and have a clear understanding of the consequences of their arrangements.
Consent
For a separation agreement to be valid in Ontario, both parties must be of sound mind and able to reach an agreement voluntarily. If one party is of unsound mind or under duress, they may be able to rescind the contract.
Independent Legal Advice
At the outset of considering a separation agreement, it is advisable for each party to obtain independent legal advice. If the parties choose not to obtain independent legal advice, the lack of independent legal advice can be one of the reasons which allows the court to set the separation agreement aside. Agreements signed without independent legal advice may be enforceable. However, if the agreement provides for equalization payments (i.e., division of property) but no spousal support, there is a much greater likelihood that the court will enforce the agreement if independent legal advice can be demonstrated. For anyone who did enter a separation agreement without independent legal advice, obtaining independent legal advice after the fact can help against enforcement risks.

Examples and Resources

For those interested in reviewing sample templates of separation agreements online, there are several resources available. The Government of Ontario, for instance, provides example forms that can be used by individuals who wish to create a separation agreement for their own personal use. Such forms include detailed outlines on the necessary clauses and components for creating a basic separation agreement.
While sample separation agreements and templates are readily available online and can be useful as reference materials, they do not address your unique situation and needs. As such, it is advisable that you consult with a legal professional before you finalize a separation agreement.

Common Pitfalls to Avoid

Couples must be quite diligent when preparing separation agreements in order for them to be enforceable in the future. Most separation agreements in Ontario can be challenged by a judge if one or both parties did not disclose complete and accurate information to one another and if the agreement fails to anticipate issues that were not considered.
A common mistake people make when drafting a separation agreement is not fully disclosing all of their assets and debts to the other spouse or common law partner. The parties to a separation agreement are expected to be completely honest when making declarations about their assets and debts. While full disclosure is required, the Ontario Family Court encourages spouses and common law partners to take the position that full and frank financial disclosure should be the starting point and not the end. In the case of Sutherland v. Sutherland (2001) 54 O.R. (3d) 1, the Ontario Court of Appeal upheld the wife’s agreement but refused to enforce it based on the husband’s failure to act in utmost good faith in the exchange of financial information. A spouse or common law partner must make full and frank disclosure about their financial circumstances or there is a serious risk that the separation agreement will not be enforced.
In order for a separation agreement to be enforceable, the document must be comprehensive. For example , a separation agreement that provides a simple percentage split of the family property under the "equalization" payment provisions may not anticipate contingencies such as what happens with respect to the loss of a job or the death of a spouse. A separation agreement must be comprehensive enough that both spouses are essentially "rewarded" for the bargain they struck as part of the agreement.
A frequent pitfall that couples engage in is creating a separation agreement that tries to address every single future possibility. This can lead to a separation agreement written in too much detail and that is completely unworkable going forward. A respectful separation is generally much more beneficial in meeting the future needs of both spouses as it allows them to come to a business-like resolution together.
Unless your separation agreement is comprehensive enough in its scope, future negotiation and significant cost may be required to address an eventual change in circumstances. Parties who rely too heavily on the terms of an overly detailed separation agreement may find themselves focused on getting revenge or "getting even" with their former spouse or common law partner. It is critical that the terms and conditions of the separation agreement are negotiated in such a way that the parties are able to put the separation behind them and start fresh.
In addition to lack of disclosure, an enforceable separation agreement can be rendered unenforceable if one or both parties of the separation made negligent or fraudulent misrepresentations to each other when preparing the agreement. The parties are required to provide full, frank and honest disclosure, to the best of their ability, about their foreseeable future needs. A judge may set aside a separation agreement and decline to enforce its provisions if it is found that one or both of the parties to the separation failed to make decisions about their future needs without having all of the relevant facts.

The Importance of Mediation and Negotiation

Mediation and negotiation are crucial components of the separation process that can help you reach a balanced and fair agreement. Separation agreements are contracts that are the result of negotiations between the parties that address issues such as property division, spousal support and child support.
Ideally, the separation agreement will be drafted by or with the assistance of a lawyer or mediator so that the final product is comprehensive and addresses all of the relevant issues.
Negotiation is often used to come to an agreement regarding support obligations, parenting schedules, division of property and the like. The more you can work collaboratively with your spouse to come to an agreement, the greater the likelihood will be that you will each feel satisfied with the terms of that agreement.
Mediation is another effective tool to come to an agreement. Mediation is a structured process where a neutral third party (the mediator) helps you and your spouse communicate and reach an agreement. The mediator is trained to help you discuss your issues, listen to each other, and identify creative solutions that address your interests. A skilled mediator can help you:
Although the mediation process is not legally binding, the result of the negotiation may be put in writing and both parties can sign a separation agreement based on the agreement reached in mediation. Keep in mind that should you be unable to come to an agreement with your spouse prior to undergoing mediation, it is not too late to try to work things out. Mediation can be very effective even where a great deal of animosity exists or sophisticated skills may be needed to avoid pitfalls. If you are concerned about whether the content of your agreement is fair, you should always consult a lawyer before you sign.
Note that if there is a pattern of abuse in the relationship, a mediation may not be safe.

Amending and Enforcing a Separation Agreement

In certain circumstances, a separation agreement may require an update, either to reflect a change in the law or because of some change in personal circumstance. Typically, this occurs in respect of a change in income of a payor spouse, particularly where he or she is one who is "behind" on his or her obligations as set out in the agreement. This is often true in cases where the agreement involves the payment of table child support, whether pursuant to the Child Support Guidelines or the support amounts set out in the Divorce Act, which essentially direct that the amount of child support payable is based upon the payor’s income level. In such circumstances, the recipient spouse may make a request of the payor for disclosure of his or her income, and upon receiving same, if the payor is significantly behind on his or her child support obligations, the recipient spouse can make an application to the court and seek a direction that child support continue to be paid in accordance with the table amount, and not the lower amount that may have been agreed upon in the separation agreement.
If one or both of the parties fail to adhere to the terms of a separation agreement, the other party may seek the assistance of the court in enforcing the agreement. More specifically, if one spouse fails to make the payments as set out in the agreement, the other spouse may seek to have the agreement enforced by way of motion. A motion is a procedure whereby a party asks the court to do something, and unlike other forms of litigation, a motion only requires the moving party to prepare a factum, which includes evidence, and sworn affidavits that set out the evidence the moving party seeks to rely upon. Unlike most other litigation, the responding party need only prepare a responding affidavit that contains their evidence, and may or may not, depending on the procedural dynamics associated with the matter , be required to file a factum in response.
As the motion to enforce the agreement is instituted in the context of the client’s application to the court, there is no need to commence a new proceeding, and the motion will be heard together with the client’s original application, unless the court orders otherwise.
If the court orders that the separation agreement be enforced, the client will be able to obtain a judgment or order from the court that is enforceable in accordance with the Family Responsibility and Support Arrears Act. If the client does not bring a motion to enforce a separation agreement, they may be in a difficult position, as their only recourse to enforce the agreement is by way of an enforcement proceeding, which is a far more onerous process and takes much longer.
In addition to enforcement orders that are put in place where a party brings a motion to enforce a separation agreement, it is also possible for a party (or their lawyer) to register a separation agreement with the Family Responsibility Office ("FRO") in Ontario. FRO is charged with the responsibility to enforce child and spousal support orders made under the Divorce Act or the Family Law Act, and once a domestic contract (or separation agreement) is registered with FRO, FRO may perform the role of a collection agency to seek enforcement and collection of support payments. FRO will not enforce agreement in isolation, and will only do so as part of an enforcement proceeding, or a registration of a domestic contract.
The court will ordinarily not enforce a provision of a separation agreement that is contrary to law, or where the provision sought to be enforced is injurious to the interests of a child, such as where a party seeks to enforce the payment of a sum of money by a payor parent who is otherwise unable to pay the amount in question.