A separating couple has but three options to resolve the legal issues between them:

1. settle the matters between them out of court through negotiation or mediation;
2. have a judge determine the issues following expensive litigation; or,
3. give up and just walk away from the mess.

It almost always better to negotiate and settle a dispute than to litigate. While a settlement usually gives neither party all of what they wished for, it gives them as much of what they asked for as possible. Litigation is stressful and expensive, offers no guarantees that you'll get what you want, and can be extraordinarily acrimonious. A negotiated settlement is less stressful, much cheaper, and gives the parties the best chance of not hating each other at the end of the process.

A couple can reach a settlement at any time, even after a law suit has started. Typically a settlement reached before litigation has begun is put into the form of a separation agreement. Settlements reached after the start of litigation can also be put into a separation agreement, but more typically the terms of such settlements are put into the form of a "consent order," an order that both parties agree the judge should make.

Separation agreements can deal with almost any issue a couple faces, from who will keep the cats, to how the mortgage is paid out, to how the children's post-secondary education will be handled. They can also offer a lot more flexibility than court orders, as some terms of an agreement can't be put into the form of a court order. Most importantly, separation agreements can be tailored to meet the specific needs and circumstances of each couple.

Of course, separation agreements aren't for everyone. There must be a certain basic amount of mutual trust and good faith, and each party must have a certain amount of flexibility and willingness to accommodate the other side. A separation agreement will not be appropriate where a couple is so filled with anger, jealousy or stubbornness that even a basic level of mutual respect and dialogue is not possible.

Alternatives to Separation Agreements

Settlements can be reached in a number of different ways if litigation has not started: through arbitration, mediation and lawyer-to-lawyer negotiation; or, through the collaborative law process. These forms of settlement are almost always put into the form of a separation agreement.

Once litigation has started, separation agreements are the exception rather than the rule when a settlement has been reached before trial. The two most common ways settlements are recorded after litigation has started are minutes of settlement and consent orders.

Minutes of Settlement

"Minutes of settlement" are a written record of a settlement of legal proceedings. They are reached after a law suit has begun and are usually used as a record of the terms of a future "consent order," an order that both parties agreee the court should make. Both lawyers and each of the parties will sign the minutes of settlement; only the lawyers will sign the final consent order.

Minutes of settlement sometimes have a rough-and-ready feel to them, as they are usually used to record a rather hasty settlement of the issues, a settlement which is sometimes reached on the morning the trial is set to start. As a result, minutes of settlement are typically less all-inclusive than separation agreements. Even though they lack the fine tuning and extra detail, minutes of settlement will be binding upon the parties in just the same way as they would be bound by a formal separation agreement.

Minutes of settlement should:

1. be signed by both lawyer and by both parties, although the signatures of the parties isn't strictly necessary;
2. deal with each significant issue in a final manner; and,
3. be attached to the draft consent order submitted to the court for its approval.

Consent Orders

A "consent order" is an order that both parties agree a judge should make. Consent orders are only appropriate if litigation has started. It is not necessary to have minutes of settlement done before a consent order is agreed to.

When a judge pronounces an order by consent, the order has just the same effect as a final order reached after a trial and is just as binding on each of the parties as a final order would be.

Comparing Minutes of Settlement and Consent Orders

The advantage of minutes of settlement is that the minutes can stand alone as evidence of the written agreement of the parties, while the form of a draft consent order stands for nothing until a court approves the terms of the order. While an agreement may have been reached, if the terms of a consent order are contested, there may not be any evidence of the agreement — as is provided by minutes of settlement — on which a court can decide the matter.

Consent orders have a unique advantage of their own, in that it is usually extremely difficult to vary an order pronounced by consent, and such orders are almost impossible to appeal.

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One party can suggest to the other that a separation agreement should be drawn up at any time after a marriage or common-law relationship has broken down. A separation agreement can be drawn up after a court action has been started or before one has even been considered. Such agreements are usually drafted before a court action has started, but there is nothing which prevents a couple from entering into such an agreement afterwards.

The Basic Process

Regardless of whether an action has been started, the process is fairly simple. The parties discuss the issues resulting from the breakdown of the relationship amongst themselves (and, hopefully, in consultation with their lawyers as well), and attempt to arrive at a resolution of each issue which is as satisfactory to both parties as possible. It is a good idea to take notes and record how each issue is resolved, as these notes may wind up forming the basis for the text of any agreement which might be reached.

The settlement process is a process of negotiation: each party has a pretty good idea of how they would like to see things settled, and then, following the exchange of these ideas, a compromise is reached which represents a blending of the two goals with which both parties are as happy as possible.

Once an agreement is reached, one of the parties will draw up an agreement which is presented to the other party. This draft is carefully reviewed to ensure that it reflects the actual agreement which was reached, and to see whether anything was left out or if there's something else which ought to be included.

(Drafting a separation agreement is something which requires a great deal of skill and an intimate knowledge of family law and contract law. While kits are available that can guide you in drafting an agreement, where the content of the agreement is anything less than completely straightforward, it is highly recommended that you hire a lawyer to deal with the matter. Drafting issues are briefly dealt with in the first chapter of this section, "Family Agreements.")

Once both parties are content with the text of the agreement, they must each separately take the agreement to their respective lawyers — or to any lawyer, for that matter — for advice as to how the agreement affects their legal rights and the options they may have open to them if they do not execute the agreement. This is called getting "independent legal advice." This stage is critical for three reasons:

1. if you are entering into an agreement which will resolve a legal problem, you must know how that agreement affects the rights you would have had if you had pressed on with a law suit;
2. you must understand the obligations and rights you have under the agreement; and,
3. it stops either party from claiming, later on, that the party didn't know what the agreement meant or that the party was at a disadvantage because the other party's lawyer drafted the agreement.

After independent legal advice has been had, and, if each party remains willing to enter into the agreeement, the agreement is then executed in the presence of a witness. Normally, each party executes the agreement before the lawyer who provided the independent legal advice, but anyone can witness a party's signature, as long as the witness isn't under the age of 19 and doesn't stand to benefit from the agreement. The witness will watch as the party signs the agreement, and the witness will then sign the agreement him- or herself.

Note that someone who witnesses an agreement does not become a party to that agreement, or isn't responsible for seeing that the agreement is followed. A witness' signature on an agreement merely says "I saw the Mr. Smith sign the agreement."

If the parties had legal advice, the lawyer who gave the advice will usually sign a form confirming that the party received advice as to how the agreement affects his or her legal interests, the party understands the agreement, and the party wasn't forced into making the agreement.

Normally, four separate original copies of a separation agreement are executed. This is so the parties and their lawyers can each have an original copy of the agreement. Sometimes, an extra original copy is executed in case the agreement must be filed in court.

If you are Negotiating an Agreement and have a Lawyer

Even if you have a lawyer it can be extremely tempting to work something out with your ex "on the side." If you feel even remotely tempted to do so, call your lawyer! Make sure your lawyer knows that you're trying to work something out, and make sure you understand what to say and what not to say.

Nothing is quite as frustrating as finding out that a client has negotiated an inadequate or prejudicial agreement without his or her lawyer's input. While you, the client, are free to do as you will and arrive at any agreement you wish, be warned that you may find yourself settling for extremely poor terms, compared to what your lawyer might have been able to negotiate for you or to what results you might have obtained at trial. Remember that you will be held to any agreement that you freely enter into, regardless of whether it's a good agreement or a bad one.

Call your lawyer first. This is what you're paying for.

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A separation agreement is a contract, in just the same way you have a contract with your employer, landlord, or the company from which you lease your car. On the other hand, it is a special kind of arrangement, different from commercial contracts, because it concerns how human beings will deal with one another, their children and their property both now and into the indefinite future. As a result, the law dealing with separation agreements is a blend of statute law, the common law relating to family agreements, and certain parts of the law dealing with traditional commercial contracts.

The whole point of a separation agreement is that the agreement, just like a commercial contract, is expected to bind the parties and govern how they relate to each from the moment the agreement is executed. As such, the agreement must be "enforceable," that is, it must be drafted in such a way and contain reasonably fair terms such that a court will uphold it if it is challenged. A separation agreement must therefore conform to certain basic rules, including the following:

• A separation agreement must be set out in writing.
• The agreement must (usually) be signed by each party in the presence of a witness.
• The parties cannot be under the age of majority or suffer from any other legal disability.
• The agreement must clearly identify the parties and the nature of their rights and obligations to one another.

Certain principles of contract law will also apply to separation agreements, including the following:

• The parties must each enter into the agreement of their own free will, without coercion or duress by the other party, or by anyone else.
• The parties cannot make an illegal bargain, that is, they can't form an agreement which obliges them to do something illegal or otherwise against the law.
• Where an agreement is prepared by a spouse's lawyer and the other party doesn't have a lawyer, any parts that are vague may be interpreted in favour of the party who didn't hire the lawyer.
• The court will attempt to give effect to a contract wherever possible, that is, they will attempt to give meaning to the terms of a contract rather than declare it void.

Family law agreements are also subject to other principles, princples that don't necessarily apply to commercial contracts:

• If one term of a separation agreement is void, the remainder of the agreement will still stand as a valid agreement.
• A separation agreement will not be considered to be invalid and without force because one party doesn't comply with a term of the agreement, that is, you can't say the whole agreement is invalid because the other party didn't do something he or she was supposed to do.
• While the parties can agree to do something different than what the agreement says about a particular issue, the remainder of the agreement dealing with the other issues will remain in force.

Note that the courts will rarely — if ever — uphold an agreement which attempts to "contract out" of a statutory obligation. Child support, for example, is a positive, almost absolute obligation a parent has to his or her children. The court will not be bound by or consider the parties bound by an agreement which provides that a party will never have to pay child support in exchange for giving up access rights.

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The potential subjects of a separation agreement are limited only by common sense and what the law will allow. That being said, it is always best to be as realistic as possible when drafting a separation agreement. Is a schedule of payments unrealistically difficult for one party? Will the children be able to adapt to a shared parenting arrangement? Are the parties' obligations to one another too complex? Are they too optimistic? Are they affordable? While it is best that all of the issues between the parties be dealt with in a separation agreement, the simpler an agreement is, the better it will usually work in real life.

Children

Custody

There are two basic types of custody available, sole custody and joint custody. Sole custody is fairly rare, and is usually only appropriate where the parties are constantly at each other's throats, where or one party expects to be absent from the child's life. Joint custody is far more common than sole custody. In this situation, both parents are custodians of the children.

Joint custody has little to do with how much time the child spends with each parent. The child's time can be shared equally or almost equally, or the child can see a parent only on weekends, and the parents can still have joint custody.

See the chapter "Children > Custody" for more information about custody.

Guardianship

Like custody, guardianship can be held solely by one parent or held jointly by both. A parent who has sole guardianship of a child is entitled to make all sorts of decisions affecting the child's life without the necessity of seeking input from or getting the agreement of the other parent.

Where the parties share joint guardianship of the child, they each have responsibility for managing the child's life, from the choice of the child's school, to the manner of the child's religious education, to selecting the child's medical treatment in case of illness. As a result, the parties must be able to communicate with one another and they must be willing to put the child's best interests ahead of their own.

Joint guardianship is the most common form of guardianship. Sole guardianship is usually only appropriate where:

1. a parent expects to be absent from a child's life;
2. a parent has absolutely no interest in raising his or her child or being a part of the child's life; or,
3. the parents simply can't get along well enough to talk civilly about the child.

When guardianship is shared, it is a good idea to spell out exactly how the parties will share their responsibilities in a little more detail than simply saying "Jane and John will share joint guardianship." The Joyce model of joint guardianship is the most common way these responsibilities are described:

Note that if nothing is spelled out in the agreement with respect to guardianship, the parent who has custody of the child is assumed to be have guardianship of the child.

See the chapter "Children > Guardianship" for more information.

Access

Access refers to the time each party has with their child. Usually, "access" is used to describe the time that the parent who has the least amount of time with the child has with the child. The terms of a parent's access can be very specific or, where the parties get along exceptionally well with one another, the terms can be as vague as "Jane will have liberal and generous access to the child."

If there has been a history of difficulty exercising access or there is even a smidgen of conflict between the parties, it can be terribly important to spell out access to avoid future arguments. The terms of access usually spell out when the parent will see the child on a week-to-week basis, such as "John will have the child from Friday at the end of school to the following Sunday at 7:00pm, every other week, plus each Wednesday from the end of school until 7:00pm." They can also take into account:

1. access on the child's birthday;
2. access on mothers' and fathers' days;
3. access on the parents' birthdays;
4. access during school and religious holidays;
5. extending weekend access when there is a civic holiday or a professional development day at school;
6. telephone and email access, including instant messaging;
7. dividing the responsibility for picking up and dropping off the child; and,
8. access for special school events.

See the chapter "Children > Access" for more information.

Child Support

Child support is a monthly sum paid by the parent who has the child for the least amount of time to the parent who has the child for the most amount of time to defray the costs that parent bears as a result of having the child for most of the time. The amount of child support which is paid is usually dealt with by referring to the federal Child Support Guidelines, which sets out the amount of a parent's child support obligation in table format according to the number of children support is being paid for and the payor's income.

A good separation agreement will:

1. state the income of each parent at the time the agreement is made;
2. state the monthly child support to be paid;
3. set up a system which requires the parties to exchange copies of their tax returns and Canada Revenue Agency notices of assessment each year or every other year; and,
4. provide for the automatic recalculation of child support if the payor's income rises or falls.

The Guidelines is an extremely convenient way to calculate a party's child support obligations up to the point where the spouse paying support, the "payor," has access to the child for 39% or less of the time. Once the payor has 40% or more of the child's time, the Guidelines goes out the window, and child support is assessed based on, among other things, the parties' separate family standards of living and the amount of expenses related to the child each party is paying. In the context of separation agreements, this allows for a little more flexibility in determining child support, but makes the annual exchange of financial information even more important.

See the section "Child Support" for more information. The first chapter of that section also offers a handy child support calculator.

Spousal Support

Spousal support is paid by one party to the other to help defray the recipient's day-to-day living expenses. A separation agreement which provides for the payment of spousal support should be negotiated bearing in mind all of the things the court would have considered in making an order for spousal support. Of course, when a separation agreement is being drawn up, the amount of spousal support payable, if any at all, is the product of the parties' negotiations.

Typically, a separation agreement which provides for spousal support will include some means of limiting the length of time for which support will be payable. Such terms might include:

1. a fixed length of time over which support will be paid, after which the payor has no more responsibility to pay;
2. an indefinite amount of time that support will be paid, with one or more dates set when the question of spousal support can be reviewed;
3. a series of graduated payments, so that the recipient receives a declining amount of support as he or she re-enters the work force;
4. the termination of support if the recipient remarries or otherwise becomes supported by someone else;
5. a fixed lump-sum payment of support; or,
6. a mutual waiver of any entitlement to receive spousal support.

In some situations, of course, permanent support may well be required, especially if the relationship was lengthy or if the recipient is unlikely ever to become self-sufficient.

Some agreements also provide that no spousal support will be payable. If you are the spouse who would ordinarily be entitled to receive support, you should be extremely wary of signing such an agreement as it may prove very difficult to obtain support later on if your personal circumstances change.

Calculating the amount of support to be paid depends largely on the recipient's reasonable monthly needs and the reasonable disposable income that they payor might have to meet those needs. In January 2005, the federal Department of Justice issued an academic paper that proposes using mathematical forumlae to calculate how much support should be paid and for how long. This paper, the draft proposed Spousal Support Advisory Guidelines, is being used more and more by lawyers and the courts to calculate spousal support, in both litigation and negotiation.

See the section "Spousal Support" for more information. The chapter "Spousal Support > The Advisory Guidelines" has a couple of rough spousal support calculators that use the Advisory Guidelines formulae.

The Division of Assets

The ways in which a separation agreement can deal with the division of family assets are virtually unlimited. Some spouses are willing to walk away from a relationship with only those assets held in their own names; in some circumstances, however, this would be grossly unfair and a division of some or all of the assets is required.

Where assets are an issue, it is a good idea to exchange Financial Statements. A Financial Statement is a form set out in the Supreme Court Rules of Court which requires each party to itemize their income and assets, expenses and debts. This form can be extremely useful for each spouse to get a clear idea of the exact financial situation of the other before any property-related negotiations start.

The ways that assets are divided in separation agreements are almost limitless, and depend entirely on the circumstances of each party and the length of the relationship. Some people take what they brought into the relationship and divide the things bought afterwards; some people sell everything and divide the proceeds; others allot certain assets to each spouse and equalize the value of what each is taking; some people divide their assets equally and others do not. Regardless of how the assets are divided, do not forget to take into account shared debts!

See the section "Family Assets" for more information.

Other Issues

Arrangements for the care and control of children, the payment of support and the division of family assets are the most common issues that come up in family law. There are a whole host of other issues which couples may have to deal with, including some that can only be dealt with in separation agreements.

The parties' future relationship with each other

Most separation agreements include a whole section devoted to describing how the parties will deal with each other once the agreement is executed. Typically, this portion of an agreement requires the parties, among other things, to:

1. not incur debts in the name of the other party;
2. not interfere with the personal life of the other party, including interfering with the other party's relationships with his or her parents, family, friends and future partners; and,
3. not molest, harass or annoy the other party.

Insurance

Where children are involved, it can be a good idea to provide that each party will maintain a life insurance policy until the children have all reached the age of majority. Each policy will name the other parent as the sole beneficiary of the policy in trust for the benefit of the children, in order to ensure that the kids will be looked after in the event that either party dies. Most agreements that deal with insurance allow the parties to change the beneficiaries of their policies once the youngest child turns 19.

It's only appropriate to include a term about insurance policies if the parents can afford to pay for those policies.

Undisclosed assets

If you have even the slightest doubt that the other party hasn't been entirely honest about the extent of his or her assets, a term governing undisclosed assets can be important. These sorts of terms usually provide that:

1. any property that wasn't disclosed when the agreement was executed will automatically be deemed to be owned equally by both parties;
2. the party that didn't disclose the asset will have to give the other party one-half of the asset's value; and,
3. the party that didn't disclose the asset will have to pay the costs the other party incurred in finding the asset, plus a financial penalty.

Family debts

A separation agreement should deal with how the parties' debts will be dealt with, including debts that are owed only by one party. Separating couples typically pay out shared debts by the sale of a shared asset, which is usually how the mortgage on the family home gets paid out, or they can allocate a different share of the family assets to compensate for a debt.

When a debt won't be paid out, it is essential to do two things: allocate responsibility for the debt; and, provide that the party keeping the debt will preserve the other party from any financial consequences of that debt.

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Normally, separation agreements do not contain special terms providing for the reconciliation of the parties and the resumption of married life. The problem here lies in determining the effect of reconciliation on a separation agreement. If the parties get back together, is the agreement still in force? If the parties separate again, what becomes of the old agreement?

The general rule here comes from the common law. Without a specific clause preserving some or all of the terms of a separation agreement, the agreement will be void if the parties reconcile and resumed married life. This rule was upheld in a 2003 decision of the Ontario Court of Appeal, in Sydor v. Sydor. In that case, the court held that unless a separation agreement contains a term to the effect that the agreement will survive reconciliation, the agreement will be void when the couple reconciles, notwithstanding a term of the agreement that it is a "full, final and conclusive settlement" of all issues arising from the marriage.

The upshot of all this is that if you are believe you and your partner might get back together at some point in the future and want your separation agreement to survive your reconciliation, you must put a term to that effect in your separation agreement. Without it, your agreement will be worthless if the relationship breaks down again at some point in the future.

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