Here is a common conversation in my office when a client comes for their first family law consultation:
Client: “I just separated from my spouse and I want a separation agreement. Can you write one up for me?”
Me (lawyer): “OK, have you and your spouse discussed what the terms of the settlement will be?”
Client: “Oh no. He (or she) is totally unreasonable and won’t talk to me about it.”
Me (lawyer) “well . . . . .”
Can you see the problem here? Lawyers have no powers to “decide” what a separation agreement is going to be. I cannot write up an agreement and force anyone to sign it, nor do I have any power to impose on anyone the terms of settlement that my client asks for. Of course you want a separation agreement – but its not something I can we can do all by ourselves.
Let me explain what a separation agreement actually is, and how you get one that will actually do what it is supposed to do.
A separation agreement is nothing more than just a legal written contract between two people. That’s it – it’s a contract.
Like any other kind of contract, a separation agreement needs to be negotiated between two people and then put to paper in a manner that is acceptable to both parties.
However, separation agreements are also different than other kinds of contracts. Because of the intimate and deeply personal nature of a separation agreement, the law and the Courts do not treat Separation Agreements the same way as other kinds of contracts. For example, your rental agreement, your car purchase agreement, or a contract with your lawn care professional.
Commercial contracts tend to operate in an environment where both parties are on equal footing, and with similar bargaining power. That’s not the case with family law contracts.
When a couple parts ways, there is nearly always a level of distrust, anger, hurt, and frequently, an inequality of bargaining power between the two parties. It is common for at least one of the two parties to be depressed, anxious or worried about living life without the support of their spouse. There might be a level of panic and uncertainty about their housing, children or how to pay bills without the assistance of the other spouse. And, more often than not both parties are buried in an incredible cloud of misinformation about their rights and obligations in the family law and divorce context. Most of the time I spend in the first meeting with new family law clients is nothing else but correcting all of their wrong assumptions about how divorces go, and what the person can actually expect to happen.
The Supreme Court of Canada explains the unique nature of separation agreements this way:
“There is no doubt that separation agreements are negotiated between spouses on the fault line of one of the most emotionally charged junctures of their relationship — when it unravels. . . . . because of the uniqueness of this negotiating environment, bargains entered into between spouses on marriage breakdown are not, and should not be seen to be, subject to the same rules as those applicable to commercial contracts negotiated between two parties of equal strength”
Rick v. Brandsema, 2009 SCC 10 at paragraph 40
For this reason, family law lawyers have to take care to make sure that separation agreements are negotiated on a fair playing field, with the benefit of full factual information and legal advice.
In my view, separation agreements in family law cases need three main things in order to be worth the paper they are written on:
- Agreements need to be based on full disclosure of information;
- Agreements need to be created in a fairness environment; and
- Agreements need to be created with the benefit of legal advice for both parties.
Disclosure
Simply put, this means that both sides need to show their cards – all of the relevant financial information each spouse has, needs to be shared with the other. In family law, this means that both parties must be informed about the complete financial holdings of the other parties, and they must also, share the complete financial details about themselves. At a bare minimum, this means sharing tax returns, providing a complete picture of investments, understanding the value of pensions, properties and all of the relevant tax issues as well as debts. If any one party is hiding accounts or income – then the separation agreement will be based on nothing but lies and misinformation.
No full financial disclosure = a worthless separation agreement. If an agreement is based on a lie, the misinformed spouse will have no trouble convincing a judge to set the agreement aside (meaning, tossing it out).
A problem at the start of many family law cases, is that one spouse might not have all of the information needed to make an informed decision about if the proposed ‘deal’. Disclosure takes time to be given and received by both spouses. Without this important step being completed – your agreement will be vulnerable to attack, and could be rendered useless.
Fair Environment
What this means, is that both parties need to be in a reasonable state of mind when they are negotiating and signing a separation agreement. It means that no one is too mentally unwell to be entering into such a contract. It means that no one should be signing an agreement out of fear or force.
One extreme example I have had in my practice was a case in which my client had signed an agreement under circumstances where the husband had prepared a grossly unfair separation agreement (he received 98% of the net total family assets including four properties and his pension) and asked my client to sign the “bad deal”. Under this “deal” all the wife got to keep was her old car, her student loan and custody of her young daughter (her main priority). The husband told my client that he intended to “blow his head off” if she didn’t sign the agreement. Not surprisingly, she signed it. You can read the court decision here: G.C.G. v. M.J.T., 2016 BCSC 1277.
The judge in that case had no difficulty finding the agreement was unfair, and threw out the agreement, because it had been signed under duress.
Now, that’s an extreme case of an “unfair environment” but you can see how such a situation can make a separation agreement open to attack. The lawyers job is to make sure that your separation agreement is not created in such an environment.
Legal Advice
The third component of a durable separation agreement is legal advice. A sturdy separation agreement will be one in which both parties signing it know and understand the rights and obligations they have under the law, before signing such an agreement.
A good separation agreement complies with the law. For example, lets briefly talk about child support. The law is strict on this requirement and is precise on the expectations of the parties to pay child support according to the Child Support Guidelines. Parents ought to be aware that they have legal obligations to their children, that they, as parents, cannot contract out of it in their agreement. If I am asked to prepare a separation agreement that doesn’t comply with the minimum legal requirements for something like child support – I won’t do it, because I know its not enforceable. I want your agreement to be enforceable, and not be so easily open to attack.
A well-informed capable adult CAN choose to waive their own legal rights under the law to a share in property, or spousal support for example. But, if the individual was misinformed about or misunderstood their legal rights, it could be grounds to set aside an agreement.
The best and most solid agreements are those where both parties have had their legal rights explained to them first. If you choose to NOT get legal advice, you certainly can still sign an agreement, but then it becomes a question about if you at least had the opportunity to get legal advice, and whether you made the conscious choice to decline that advice, or not.
Conclusion
A separation agreement is probably the most important document you will sign in your whole life. The financial security of yourself, and your children depend on what is provided for in the agreement. Don’t scrimp on this. Make sure it’s done correctly, and in a way that makes your agreement as solid, durable and predictable as possible.
Separation agreements that stand the test of time are those that are negotiated with full disclosure, in a fair environment, and with the benefit of legal advice. This is not something that you should ever do on your own. Any agreement you sign that is missing one of the three key components of a durable settlement agreement will be subject to attack.
Don’t leave the most important contract of your life to a Google search. Hire a lawyer who knows how to make sure you only have to sign one separation agreement for your divorce.
By: Rachel Lammers