Difference between revisions of "Dividing Property and Debt in Family Law Matters"

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{{JP Boyd on Family Law TOC|expanded = assets}}{{JPBOFL Editor Badge
{{JP Boyd on Family Law TOC|expanded = assets}}{{JPBOFL Editor Badge
|ChapterEditors = [[Irene Peters]] and [[Manjit Grewal]]
|ChapterEditors = [[Helen Chiu]] and [[Matthew Ostrow]]
}}{{LSSbadge
}}{{LSSbadge
| resourcetype = a fact sheet on
| resourcetype = a fact sheet on
| link = [http://www.clicklaw.bc.ca/resource/1639 How to divide property and debts]
| link = [http://www.clicklaw.bc.ca/resource/1639 How to divide property and debts]
}}If a couple are able to agree on how their property and debts will be divided, they can make a separation agreement summarizing the terms of their settlement. However, if they can't agree, court proceedings will likely start and the court will make an order dividing their property and debt for them.
}}If a couple are able to agree on how their property and debts will be divided, they can make a separation agreement summarizing the terms of their settlement. However, if they can't agree, one or either of them will likely start court proceedings and the court will make an order dividing their property and debt for them.


This section talks about how property and debt are divided between spouses by the court through court orders made under the ''[[Family Law Act]]'', and by spouses through separation agreements. It also discusses when excluded property can be shared between spouses, when family property can be divided unequally, and when the court can make orders about property located outside British Columbia.
This section talks about how property and debt are divided between spouses by the court through court orders made under the ''[[Family Law Act]]'', and by spouses through separation agreements. It also discusses when excluded property can be shared between spouses, when family property can be divided unequally, and when the court can make orders about property located outside British Columbia.
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==Introduction==
==Introduction==


Whether you're able to settle how property and debt are going to be shared by agreement or if you're going to need a court order, it's important to understand how the ''[[Family Law Act]]'' works. If you're going to start a court proceeding, the court will be required to divide property using the rules set out in the act; if you're going to be able to settle your property issues, the act will be used to measure the fairness of your agreement if either of you ever tries to get out of the agreement in the future.
Whether you're able to settle how property and debt are going to be shared by agreement, or if you're going to need a court order, it's important to understand how the ''[[Family Law Act]]'' works. If you're going to start a court proceeding, the court will be required to divide property using the rules set out in the Act; if you're going to be able to settle your property issues, the Act will be used to measure the fairness of your agreement if either of you ever tries to get out of the agreement in the future.


===How the ''Family Law Act'' divides property and debt===
===How the ''Family Law Act'' divides property and debt===
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<blockquote>To divide property and debt under the ''Family Law Act'', you first have to figure out whether you're a "spouse" as defined by s. 3(1)(a) or 3(1)(b)(i). You must either be married or have lived with your partner in a marriage-like relationship for at least two years.</blockquote>
<blockquote>To divide property and debt under the ''Family Law Act'', you first have to figure out whether you're a "spouse" as defined by s. 3(1)(a) or 3(1)(b)(i). You must either be married or have lived with your partner in a marriage-like relationship for at least two years.</blockquote>


If you're not a spouse, ''stop'' and read the discussion in the introductory section of this chapter, [[Property & Debt in Family Law Matters#Property claims and people who aren't spouses|Property & Debt]], about the property rights of people who aren't spouses. People who don't qualify as spouses are entitled to share in property that they both own and may have an interest in property only one of them owns under the common law relating to trusts and equity.
If you're not a spouse, ''stop'' and read the discussion in the introductory section of this chapter, [[Property & Debt in Family Law Matters#Property claims and people who aren't spouses|Property & Debt]], about the property rights of people who aren't spouses. People who don't qualify as spouses are entitled to share in property that they both own, and may have an interest in property only one of them owns under the common law relating to trusts and equity.


'''Step Two'''
'''Step Two'''
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<blockquote>Next you need to look at any ''cohabitation agreement'' or ''marriage agreement'' that you may have signed earlier in your relationship to see whether it talks about property or debt.</blockquote>
<blockquote>Next you need to look at any ''cohabitation agreement'' or ''marriage agreement'' that you may have signed earlier in your relationship to see whether it talks about property or debt.</blockquote>


If you have an agreement about property, ''stop''. Section 94(2) says that you cannot apply for a division of property if there's a written agreement about property or debt until that agreement is set aside.
If you have an agreement about property, ''stop''. Section 94(2) says that you cannot apply for a division of property if there's a written agreement about property or debt until that agreement is set aside.  Accordingly, if you have an agreement about property that you want to vary or set aside, you must seek an order for the court.


'''Step Three'''
'''Step Three'''
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::*you and your spouse lived somewhere else for a long time,
::*you and your spouse lived somewhere else for a long time,
::*there is a court action commenced in another jurisdiction seeking the same or similar relief,
::*you have property outside of the province, or
::*you have property outside of the province, or
::*you have a cohabitation agreement or a marriage agreement that requires the laws and courts of another place to be used,
::*you have a cohabitation agreement or a marriage agreement that requires the laws and courts of another place to be used,
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<blockquote>Now you have to start sorting what you have into ''family property'' and ''family debt'', and ''excluded property'' and ''personal debt''. Start from the assumption that everything you have is family property and family debt and then work backwards.</blockquote>
<blockquote>Now you have to start sorting what you have into ''family property'' and ''family debt'', and ''excluded property'' and ''personal debt''. Start from the assumption that everything you have is family property and family debt and then work backwards.</blockquote>


<blockquote>Property and debt that you got ''after you separated'' is generally the separate property of each spouse, with two main exceptions:</blockquote>
<blockquote>Property and debt that you got ''after you separated'' is generally the separate property or separate obligation of each spouse, with two main exceptions:</blockquote>


::*property bought after separation with family property is also family property, and
::*property bought after separation with family property is also family property (i.e. if the source of the funds used to buy the property can be traced back to family property) , and
::*debt incurred after separation to maintain family property is family debt.
::*debt incurred after separation to maintain family property is family debt.


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::*inheritances,  
::*inheritances,  
::*gifts,
::*gifts from a third party, unless they are gifts to both spouses,
::*certain court awards, and
::*certain court awards,  
::*certain insurance payments.
::*certain insurance payments,
::*certain trust property, and
::*excluded property which is then gifted by one spouse to the other.


<blockquote>Property and debt that you got ''before your relationship'' is generally excluded property that only you will keep and personal debt that only you will be responsible for.</blockquote>
<blockquote>Property that you got ''before your relationship'' is generally excluded property that only you will keep, unless you have gifted it to your spouse. The increase in the value of the property you brought into the relationship is ''family property'' even where the original amount remains excluded. You will likely remain responsible for debt you brought into the relationship.</blockquote>


'''Step Six'''
'''Step Six'''
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<blockquote>For ''excluded property'' and ''personal debt'', what you need to know is:</blockquote>
<blockquote>For ''excluded property'' and ''personal debt'', what you need to know is:</blockquote>


::*What was the value of each asset on the date you began to live together or got married, whichever came first?
::*What was the value of each asset on the date immediately before you began to live together or got married, whichever came first?
::*For property acquired during the relationship, when did you acquire each asset and what was it worth when you received it?
::*For property acquired during the relationship, when did you acquire each asset and what was it worth when you received it?
::*Was it a gift to you or you and your spouse together?
::*What did you do with your property during your relationship? Is it still around? Did you sell it and buy something else?
::*What did you do with your property during your relationship? Is it still around? Did you sell it and buy something else?
::*Did you gift it to your spouse?
::*Do you still have any debts from before your relationship started? If so, how much did you owe on the date you began to live together or got married, whichever was first?
::*Do you still have any debts from before your relationship started? If so, how much did you owe on the date you began to live together or got married, whichever was first?
::*Have you incurred any new debt after the date of your separation? Did you add to any debts incurred during your relationship after separation? If so, how much new debt have you racked up?
::*Have you incurred any new debt after the date of your separation? Did you add to any debts incurred during your relationship after separation? If so, how much new debt have you racked up?
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'''Step Seven'''
'''Step Seven'''


<blockquote>Now that you've got the numbers worked out, you may want to think about whether an ''equal division'' of family property and family debt would be "significantly unfair," bearing in mind the factors listed in s. 95(2). If it wouldn't be significantly unfair, then split the family property and family debt equally and go on with your life. If it would be significantly unfair, then you've got to figure out what a fair split looks like and I wish you the best of luck sorting this out in a speedy manner.</blockquote>
<blockquote>Now that you've got the numbers worked out, you may want to think about whether an ''equal division'' of family property and family debt would be "significantly unfair," bearing in mind the factors listed in s. 95(2), which includes but is not limited to the duration of relationship and whether a spouse, after the date of separation, caused a significant decrease or increase in the value of the family property or family debt beyond market forces. If it wouldn't be significantly unfair, then split the family property and family debt equally and go on with your life. If it would be significantly unfair, then you've got to figure out what a fair split looks like and I wish you the best of luck sorting this out in a speedy manner.</blockquote>


<blockquote>Finally, you may also want to think about whether there's a reason to share in some or all of the ''excluded property''. Excluded property can be divided if there's property outside of British Columbia that ought to be family property but can't easily be divided, or if it would be "significantly unfair" not to share excluded property, bearing in mind the factors listed in s. 96(b). If there's no reason to share excluded property, carry on. If it there is a reason to share that property, then you've got to figure out what a fair division looks like.</blockquote>
<blockquote>Finally, you may also want to think about whether there's a reason to share in some or all of the ''excluded property''. Excluded property can be divided if there's property outside of British Columbia that ought to be family property but can't easily be divided, or if it would be "significantly unfair" not to share excluded property, bearing in mind the factors listed in s. 96(b). If there's no reason to share excluded property, carry on. If it there is a reason to share that property, then you've got to figure out what a fair division looks like.</blockquote>
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#the property is here,  
#the property is here,  
#the spouses last lived together here, or
#the spouses last lived together here, or
#the court proceeding includes a claim under the ''[[Divorce Act]]'' (the reason for this factor is that the ''Divorce Act'' requires a spouse to have lived in the province where he or she makes a claim under the act for at least one year before the court proceeding is started).
#the court proceeding includes a claim under the ''[[Divorce Act]]'' (the reason for this factor is that the ''Divorce Act'' requires a spouse to have lived in the province where they make a claim under the act for at least one year before the court proceeding is started).


As if this wasn't complicated enough, even if the court can make an order because one of the s. 106(2) conditions are met, under s. 106(4) the court can refuse to make orders for the division of property and debt. Section 106(5) says what the court must take into <span class="noglossary">account</span> in deciding to refuse to make orders:
As if this wasn't complicated enough, even if the court can make an order because one of the s. 106(2) conditions are met, under s. 106(4) the court can refuse to make orders for the division of property and debt. Section 106(5) says what the court must take into <span class="noglossary">account</span> in deciding to refuse to make orders:


<blockquote><tt>(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following:</tt></blockquote>
<blockquote><tt>(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following:</tt></blockquote>
<blockquote><blockquote><tt>(a) the interests of the spouses;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(b) the relative convenience and expense for the spouses and their witnesses;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(b) the relative convenience and expense for the spouses and their witnesses;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(c) if section 108 [choice of law rules] applies, the law to be applied to issues in the proceeding;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(c) if section 108 [choice of law rules] applies, the law to be applied to issues in the proceeding;</tt></blockquote></blockquote>
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=====Paying for dispute resolution processes=====
=====Paying for dispute resolution processes=====


Under s. 89, the court can make an order for the interim distribution of some of the family property to pay for:
Under s. 89, the court can make an order for the interim distribution of some of the family property to a party to pay for:


#the cost of the court proceeding,
#the cost (i.e. legal fees) of the court proceeding,
#the cost of another dispute resolution process, like mediation, arbitration, and collaborative settlement processes, and
#the cost of another dispute resolution process, like mediation, arbitration, and collaborative settlement processes, and
#the cost of expert's reports, like needs of the child assessments under s. 211, property assessments, or business valuation.
#the cost of expert's reports, like needs of the child assessments under s. 211, property appraisals, or business valuation.
 
In practice, the court will usually make an order for an interim distribution for legal fees if the court feels it is necessary to "level the playing field" between spouses.  By making such an order, the court tries to ensure that the spouse who has all the money and can afford a lawyer does not have an advantage over the spouse who does not have as much money and may not be able to afford to pay for a lawyer without an interim distribution for legal fees.


=====Use of property=====
=====Use of property=====


Under s. 90, the court can make an interim order that one spouse have the exclusive right to live in the family home and use the property kept at the family home. The court will make these orders if it's no longer possible for the spouses to share the home and if the convenience to the spouse who's staying in the home outweighs the inconvenience to the spouse who's being made to leave.
Under s. 90, the court can make an interim order that one spouse have the exclusive right to live in the family home and use the property (i.e. household contents and furnishings) kept at the family home. The court will make these orders if it's no longer possible for the spouses to share the home and if the convenience to the spouse who's staying in the home outweighs the inconvenience to the spouse who's being made to leave.  Usually, if there are children (especially young children), the spouse who has primary care of the children will be the spouse who remains in the family home because the children require stability and security of remaining in the family home.


Under s. 91(2)(a), the court can make other interim orders "for the possession, delivery, safekeeping and preservation of property." This might include orders that a spouse must return personal property to the other spouse or that a spouse will have the sole use of personal property, like a car that's necessary to go to work or take the kids to school.
Under s. 91(2)(a), the court can make other interim orders "for the possession, delivery, safekeeping and preservation of property." This might include orders that a spouse must return personal property to the other spouse or that a spouse will have the sole use of personal property, like a car that's necessary to go to work or take the kids to school.
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A couple of important points about this section deserve mention:
A couple of important points about this section deserve mention:


*the order ''must'' be made when a spouse asks for it, unless the other spouse can show that there are sufficient assets so that the claim to the property won't be frustrated if he or she happens to sell some of the assets,
*the order ''must'' be made when a spouse asks for it, unless the other spouse can show that there are sufficient assets so that the claim to the property won't be frustrated if they happen to sell some of the assets,
*the order can be made without giving the other spouse notice of the application, and
*the order can be made without giving the other spouse notice of the application, and
*the order includes not just "family property" but all property in dispute, including property that might be excluded property.
*the order includes not just "family property" but all property in dispute, including property that might be excluded property.
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<blockquote><tt>(1) Subject to section 85 [excluded property], family property is all real property and personal property as follows:</tt></blockquote>
<blockquote><tt>(1) Subject to section 85 [excluded property], family property is all real property and personal property as follows:</tt></blockquote>
<blockquote><blockquote><tt>(a) on the date the spouses separate, property</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(a) on the date the spouses separate, </tt></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(i) that is owned by at least one spouse, or</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(i) property that is owned by at least one spouse, or</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(ii) in which at least one spouse has a beneficial interest;</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(ii) a beneficial interest of at least one spouse in property;</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><tt>(b) after separation, property</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(b) after separation,</tt></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(i) acquired by at least one spouse, or</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(i) property acquired by at least one spouse if the property is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either, or</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(ii) in which at least one spouse acquires a beneficial interest,</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><blockquote><tt>(ii) a beneficial interest acquired by at least one spouse in property if the beneficial interest is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either.</tt></blockquote></blockquote></blockquote>
<blockquote><blockquote><tt>that is derived from the property referred to in paragraph (a) or from the disposition of that property.</tt></blockquote></blockquote>
<blockquote><tt>(2) Without limiting subsection (1), family property includes the following:</tt></blockquote>
<blockquote><tt>(2) Without limiting subsection (1), family property includes the following:</tt></blockquote>
<blockquote><blockquote><tt>(a) a share or an interest in a corporation;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(a) a share or an interest in a corporation;</tt></blockquote></blockquote>
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====Dividing property and debt unequally====
====Dividing property and debt unequally====


Under s. 95(1) of the ''[[Family Law Act]]'', the court may divide family property or family debt unequally, but only if an equal division would be "significantly unfair." It's hard to say what "significantly unfair" means, because the ''[[Divorce Act]]'' doesn't use this phrase and the old ''Family Relations Act'' only talked about things that are just ''unfair'' and things that are ''grossly unfair''. It seems reasonable to assume that under the new ''[[Family Law Act]]'', something that is "significantly unfair" is ''more unfair'' than something which is just "unfair" yet is ''less unfair'' than something that is "grossly unfair."
Under s. 95(1) of the ''[[Family Law Act]]'', the court may divide family property or family debt unequally, but only if equal division would be "significantly unfair"in the context of the factors mentioned in s. 95(2). Recent court decisions explain that the unfairness must be "weighty, meaningful or compelling." A  judge can only order an unequal division of family property where the result of equal division would be so unfair as to be unjust or unreasonable. It is highly unlikely that a court would find the circumstances to be "significantly unfair" merely because one spouse worked during the marriage and the other spouse did not. <!-- Note that significant unfairness in this context requires much more than differing financial contributions in a relationship. -->


Section 95(2) provides a list of factors that the court may take into <span class="noglossary">account</span> in deciding whether an equal division of property and debt would be significantly unfair:
Section 95(2) provides a list of factors considered when deciding if equal division of property and debt is significantly unfair:


<blockquote><tt>(2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following:</tt></blockquote>
<blockquote><tt>(2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following:</tt></blockquote>
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<blockquote><blockquote><tt>(h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.</tt></blockquote></blockquote>
<blockquote><blockquote><tt>(i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.</tt></blockquote></blockquote>
In some cases judges find that the ''unequal contribution'' of one person, along with other factors, warrants unequal division. In other cases, ''unequal contribution'' is not enough to establish "significant unfairness."


Under s. 95(3), the court can also take into <span class="noglossary">account</span> issues relating to spousal support in deciding whether to divide family property and family debt unequally:
Under s. 95(3), the court can also take into <span class="noglossary">account</span> issues relating to spousal support in deciding whether to divide family property and family debt unequally:
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A separation agreement is a contract that records a settlement of the issues that arise when a relationship ends. Separation agreements can be an effective and inexpensive way of settling things. However, the terms of the agreement must be reasonable, and the parties must be able to get along well enough to negotiate the deal and then put it into action it when it's done.
A separation agreement is a contract that records a settlement of the issues that arise when a relationship ends. Separation agreements can be an effective and inexpensive way of settling things. However, the terms of the agreement must be reasonable, and the parties must be able to get along well enough to negotiate the deal and then put it into action it when it's done.


The ways that a separation agreement can deal with the division of family property and family debt are virtually unlimited. Under the ''[[Family Law Act]]'', each spouse is presumed to keep the property he or she brought into the relationship and share in the property bought during the relationship. Although spouses are presumed to be each half responsible for any debt incurred during the relationship, you can make whatever other arrangements you want, as long as both spouses agree to those arrangements and they're reasonably fair. In fact, s. 92 says this:
The ways that a separation agreement can deal with the division of family property and family debt are virtually unlimited. Under the ''[[Family Law Act]]'', each spouse is presumed to keep the property they brought into the relationship and share in the property bought during the relationship as well as the increase in the value of any property brought in. Although spouses are presumed to be each half responsible for any debt incurred during the relationship, you can make whatever other arrangements you want, as long as both spouses agree to those arrangements and they're reasonably fair. In fact, s. 92 says this:


<blockquote><tt>Despite any provision of this Part but subject to section 93 [setting aside agreements respecting property division], spouses may make agreements respecting the division of property and debt, including agreements to do one or more the following:</tt></blockquote>
<blockquote><tt>Despite any provision of this Part but subject to section 93 [setting aside agreements respecting property division], spouses may make agreements respecting the division of property and debt, including agreements to do one or more the following:</tt></blockquote>
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===The effect of a valid agreement===
===The effect of a valid agreement===


When spouses have an agreement about the division of property and debt, s. 94(2) of the ''[[Family Law Act]]'' says that the court cannot make an order about the division of family property, excluded property, or family debt, unless the parts of the agreement that deal with property and debt are set aside by a court order. This gives agreements on the division of property and debt a lot more protection against later court challenges than was provided to agreements under the old ''[[Family Relations Act]]''.
When spouses have written, signed and witnessed an agreement about the division of property and debt, s. 94(2) of the ''[[Family Law Act]]'' says that the court cannot make an order about the division of family property, excluded property, or family debt, unless the parts of the agreement that deal with property and debt are set aside by a court order. This gives agreements on the division of property and debt a lot more protection against later court challenges than was provided to agreements under the old ''[[Family Relations Act]]''.


===Making a valid agreement===
===Making a valid agreement===


Under s. 93 of the ''[[Family Law Act]]'', an agreement about the division of property and debt must be:
Under the ''[[Family Law Act]]'', an agreement about the division of property and debt may be oral or written.  However, it is highly recommended that the agreement be in writing so that there is less chance of a dispute over the terms of the agreement. 
 
There are requirements about the validity of agreements that are part of the common law of contracts. These are discussed in a little more detail further on in this section, but for a more thorough discussion you should look at the [[Family Law Agreements]] chapter.


#in writing, and
It is also highly recommended that each spouse obtain independent legal advice (i.e. hiring a lawyer (separate lawyers) to explain and give advice about the terms of the agreement) before signing the agreement to ensure that each spouse understands the nature, circumstances, terms and the effect of the agreement, especially if one spouse has a limited understanding of the English language or has limited education.
#signed by each spouse in the presence of someone else as a witness.


There are other requirements about the validity of agreements that are part of the common law of contracts. These are discussed in a little more detail further on in this section, but for a more thorough discussion you should look at the [[Family Law Agreements]] chapter.
It is also important to ensure that each spouse has properly and fully disclosed all assets and debts in the spouse's name in the agreement. An agreement that says "mine is mine and yours is yours" without proper disclosure may not be upheld by the court if one spouse seeks to set it aside or vary it.


===Asking the court to set aside an agreement===
===Asking the court to set aside an agreement===


Section 94(2) says that the court cannot make an order dividing property or debt in the face of an agreement on property and debt until it has set aside those parts of the agreement. As a result, if a spouse is unhappy with the terms of a separation agreement on property or debt, the spouse must first ask the court to set aside the agreement and second ask for an order about the division of property and debt.
Section 94(2) says that the court cannot make an order dividing property or debt in the face of a written and witnessed agreement on property and debt until it has set aside those parts of the agreement. As a result, if a spouse is unhappy with the terms of a separation agreement on property or debt, the spouse must first ask the court to set aside the agreement and second ask for an order about the division of property and debt.


====Family law agreements and contract law====
====Family law agreements and contract law====
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The ''[[Family Law Act]]'' provides two tests to help the court decide when an agreement on property and debt should be set aside. Under the first test, at s. 93(3), the court must look at the situation of the parties when they were negotiating and executing the agreement. The court is required to consider whether these circumstances existed when the parties were making their agreement:
The ''[[Family Law Act]]'' provides two tests to help the court decide when an agreement on property and debt should be set aside. Under the first test, at s. 93(3), the court must look at the situation of the parties when they were negotiating and executing the agreement. The court is required to consider whether these circumstances existed when the parties were making their agreement:


<blockquote><tt>(a) a spouse failed to disclose income, significant property or debts, or other information relevant to the negotiation of the agreement;</tt></blockquote>
<blockquote><tt>(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;</tt></blockquote>
<blockquote><tt>(b) a spouse took improper advantage of the other spouse's vulnerability, including the other party's ignorance, need or distress;</tt></blockquote>
<blockquote><tt>(b) a spouse took improper advantage of the other spouse's vulnerability, including the other party's ignorance, need or distress;</tt></blockquote>
<blockquote><tt>(c) a spouse did not understand the nature or consequences of the agreement;</tt></blockquote>
<blockquote><tt>(c) a spouse did not understand the nature or consequences of the agreement;</tt></blockquote>
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{{REVIEWED | reviewer = [[JP Boyd]], March 24, 2013}}
{{REVIEWED | reviewer = [[Helen Chiu]], May 14, 2019}}


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