Using a Separation Agreement Template
In more complex separations where children, pensions, RRSPs and other investments are involved templates fall short of being adequate.
The Courts have made Separation Agreements created from templates and kits invalid.
Full financial disclosure is a vital pillar of your separation agreement.
For an agreement to be legally durable, it’s vital that all decisions are informed decisions formulated from a complete set of facts.
Before signing your separation agreement, the independent legal advice requirement is misunderstood.
Why you need a separation agreement?
So let’s first understand divorce in Ontario. In simple terms, a divorce application is a ‘dissolution of marriage.’ It is the documentation that legally ends a marriage. The central purpose of an agreement, on the other hand, is to create clarity and certainty around your financial and parenting issues. Your separation does not end your marriage legally.
There are two ways to be legally separated and only one way to end a marriage. You can be separated either by court order or by a separation agreement. However, neither legally ends your marriage.
To dissolve a marriage in Ontario, you must make a divorce application to the courts to legally end your marriage. Conversely, a divorce order offers no protection to your assets, nor does it shield you from your spouse’s debts or establish terms around spousal and child support.
Is it necessary to get a separation agreement in Ontario? No. In Ontario, you do not need a separation agreement to separate and divorce. If you can show that you have been living apart for at least a year, the marriage has broken down and you are eligible for divorce.
You may be asking why I may need a separation agreement? Separation agreements are agreements between spouses who are legally separating but not yet or intending to divorce. To get a divorce, you will need to apply to the courts, but you can agree on when and how to get a divorce in your separation agreement.
There are plenty of good reasons why separating couples choose to formalize their parting in the form of a documented agreement:
- It’s usually faster, cheaper and less stressful than going to court
- It puts both spouses in control of deciding what works best for their family, instead of letting the court decide
- It will enable others who are involved in your children’s care know what’s been decided upon
- With a written separation agreement, it’s easier to prove what you and your partner have agreed on, compared to a verbal agreement
- You can call on the Family Responsibility Office if there’s a problem getting child or spousal support.
For both personal and financial reasons, couples may seek a legal separation. If you’re not sure if you want to dissolve your marriage, a formal separation might offer you time to think things through while also protecting your finances.
Separation Agreements are created any time after you decide to separate, but there are time limits placed on when you can ask your partner for certain things. For example, when it comes to dividing property, you have 5 years to sort it from your separation, but only 2 years after you get divorced.
What should be included in your agreement?
You will need two homes going forward. If you complete your separation agreement before entering the real estate market or buying your spouse out of the matrimonial home, you will avoid many costly and stressful pitfalls. Sadly, I see too many separated spouses, feeling the pressure of our tumultuous real estate market, walk right into some very expensive traps.
A signed separation agreement will smooth out the path to buying or selling the matrimonial home or a new home.
Couples that rush past a separation agreement can remain financially entangled far past their separation. You may be separated but to the bank, you jointly signed the mortgage so you are both responsible for this debt. This can extend to your lines of credit, credit cards, and car loans. These responsibilities and other joint debts will affect your individual creditworthiness. The financial terms of the separation agreement will clear up your connecting credits and explain to the bank your obligations for equalization, child and spousal support.
Upon closing the sale of your matrimonial home, a formal separation agreement is required to instruct your real estate lawyer on how to disperse your proceeds from the sale, otherwise, your equity will stay in your real estate lawyer’s trust account until a separation agreement is provided.
The Federal Child Support Guidelines are published to assist separating couples in arriving at a determination on the appropriate amount of child support. Parents jointly maintain the responsibility of financially supporting their children.
Each of your incomes and the number of children are factors that influence the child support amount. The guidelines also assist in determining when child support will end. Commonly, it is when the child turns 18 years old or until they have completed their post-secondary education, however other factors must be considered and that age may differ depending on each case.
Soft Landing Settlement Method separation agreement will help you apply Child Support Guidelines to arrive at an appropriate child support amount. It also addresses the other components of child support, such as the special (extraordinary) and extra-curricular child expenses.
For more about Child Support and options in mediation click here
A parenting plan is the written legal document that outlines how you and your spouse, as co-parents, will raise your children after your separation or divorce.
The term parenting plan may sound like a less hostile phrase for a custody agreement, but parenting plans offer much more information and much more flexibility than traditional custody agreements.
These plans, which are mediated between the parents, address various aspects of child custody. You and your ex-spouse can incorporate as much or as little information into a parenting plan as you deem necessary, and you can change your plan if you find it’s no longer working for your family’s needs. The nice thing about a parenting plan is that you have complete control. You’re not stuck signing a document you don’t agree with or waiting for a judge to render a custody decision. Some families only address custody and visitation in their parenting plans, while others get into much more detail.
When you’re working on a parenting plan, and for the many years ahead you will spend dealing with your ex, keep the following in mind:
- Each of you has something valuable to offer your child.
- Each of you needs and deserves time with the child.
- Disagreements do not mean either of you is a bad parent.
- Work to constructively resolve disagreements with practical solutions rather than escalating a dispute.
- Ask your ex-spouse what he or she needs, and express your needs clearly in a language that is neither confrontational nor blaming.
When you make financial, custody, and other divorce decisions, the well-being of your children should be the first thing on your mind. More than half of those children whose parents get embroiled in custody battles develop depression, but a parenting plan can help save them from such troubles down the road. Your child can rest easy, with complete security that she’ll have substantive time with both parents.
The benefits of a parenting plan:
Less stress
More than anything, children crave security and consistency. A parenting plan gives them both.
Your child will always know with which parent she will be, and can plan birthdays, outings, visits with friends, and projects accordingly. She also won’t be stuck wondering when she’ll see her other parent next or if her parents will ever resolve their conflicts.
Improved well-being
The shared parenting involved in a parenting plan is much better than fighting endlessly or trying to take all custody away from your ex.
Stronger relationships
Perhaps the most important benefit of a parenting plan is that it improves your child’s relationship with both parents. She’ll have guaranteed time with each of the people she loves most, and the open communication fostered by a parenting plan helps your child know that she’s not betraying you by loving her other parent.
Additionally, relationships don’t begin and end with parents. Your child may have grandparents, half siblings, aunts, uncles, cousins, godparents, and friends he only sees when he is with one parent.
Your parenting plan keeps these relationships – which are often vital for helping kids get through the stress of divorce – strong and intact.
Your parenting plan will minimize conflict by clearly setting out parenting guidelines and expectations; providing for your children’s needs and child support. Here are a few things that can be established in a parenting plan.
- Decision making
- Sharing information between parents
- Where the children live and scheduling on duty and off duty parenting
- Access to grandparents and other relatives
- Scheduling holidays and special occasions
- How and when new partners will be introduced to the children
- How other parenting issues may be addressed.
For more about Parenting Plans and options in mediation click here
In the applicable legislation, marriage is viewed as a financial partnership. When that partnership comes to an end neither spouse should be negatively affected more so than the other. Spousal support is one mechanism to equalize the financial circumstances resulting from the break-up of that partnership.
Spousal support terms such as how much, when, and for how long are detailed in the separation agreement.
The Spousal Support Advisory Guidelines are now a required tool for lawyers, mediators and judges across Canada. The ‘final version’ of the guidelines was released in July 2008. The guidelines require the inputting of several variables when calculating the range of spousal support and the support duration to be considered, in effect balancing how much support the receiving spouse requires to meet their needs, and how much the payer spouse can afford to pay.
The guidelines look at the length of the marriage as an indicator of the duration of the spousal support, however, there are other factors considered. As a general rule, with shorter-term marriages, spousal support is more about helping the receiver spouse to become financially self-sufficient. With longer-term marriages, it could be more about compensating the receiver spousal for the financial inequities created by the separation.
Here are three important provisions that every separation agreement should have with regard to spousal support:
- A clear spousal support review provision clarifying how the support is adjusted, terminated or changed.
- A spousal support release provision is required either way. Whether a spousal support claim is waived or not, a release provision must be included in the separation agreement. A release provision may be conditional on spousal support obligations being met in full prior to the activation of the release.
- Double dip avoidance provision. A double dip is when a spouse must pay support on income from an asset already shared with their former spouse.
For more about Spousal Support and options in mediation click here
A separation agreement arrived at by mutual consent and settled out of court is statistically known to be long lasting with a minimum of future conflict.
To create a durable settlement, your separation agreement will include dispute resolution provisions, illustrating the settlement procedure to be followed to self-resolve any future disagreements.
Having mutually agreed upon dispute resolution options and pathways ensure resolution of future unexpected issues without engaging lawyers or going to court.
Your workplace pension could also be family property. This means that it is an asset that must be addressed in your settlement negotiations. It is an asset subject to division or equalization. How this asset ultimately gets settled it must be included in your separation agreement.
A common misunderstanding around pensions is their values. Most of us take our bank, investments or RRSP statements at face value. With this thinking, the numbers on the regular annual pension statement must be the value of the pension, right? No, the pension statement value is never the correct value. The reasons the statement values are not correct has filled many books about pension valuation, so I will not go into the reasons here. My advice, however, is this: never make financial decisions directly from pension statements – you will be not just a little ‘out’ but very far off of being fair and equitable.
There are also far-reaching tax impacts connected to your pension. The good news is that, in 2012, Ontario introduced some new rules that made pension valuation a whole lot less complicated and much less expensive. Let us help you with this.
Have Any Questions?
Contact Information
Ken S, Maynard CDFA
1.855.731.3500
647.360.3200
Have Any Questions?
Contact Information
Ken S, Maynard CDFA
1.855.731.3500
647.360.3200
We help smart and successful separating couples create separation agreements with clarity and soft landings for secure futures in 4 meetings or less without all the lawyer created overwhelming conflicts, confusion and costs.
I help smart and successful couples, create separation agreements with clarity and soft landings for secure futures, in 4 meetings or less without all the lawyer created overwhelming conflicts, confusion and costs. You can work with me by video conference or with a DTSW associate at any of our 6 DTSW Greater Toronto mediation centers, including | Aurora | Barrie | North York | Vaughan | Mississauga | Scarborough.
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