Family Law Agreements

A family law agreement — usually a cohabitiation agreement, a marriage agreement or a separation agreement — is a contract, just like the contract someone might have with an employer or a landlord: each party promises to do something in exchange for something the other party promises to do, and both expect parties that they'll be held responsible for fulfilling their promises. In family law, contracts like these are used to settle the issues that arise when a relationship ends, although they can also be used to settle how a relationship will be managed.

This chapter provides a brief introduction to family law agreements, and discusses the role they play during relationships and when relationships end. It will also review the typical elements of a family agreement and discuss some of the things you might wish to keep in mind when negotiating and drafting an agreement yourself.

Introduction

People who sign a family law agreement when they marry or plan to marry are entering into a marriage agreement, also known as a pre-nuptial agreement. People who sign an agreement when they start living together or plan on living together are entering into a cohabitation agreement, also called a living-together agreement.

The usual point of agreements like these is to say what will happen if the relationship breaks down, although they can also talk about how things will be handled during the relationship. The weird thing about marriage agreements and cohabitation agreements is that although they mostly talk about what will happen when a relationship ends, that may not happen for five years or twenty years, or it may never happen. It can be very difficult to make plans based on what the family's circumstances might be like at some unknown point in the future when the relationship ends.

Married spouses and unmarried couples who enter into an agreement after their relationship has broken down are entering into a separation agreement. A separation agreement is a contract that describes how some or all of the legal issues arising from the end of the relationship have been resolved.

All of these different kinds of agreement are legal contracts that describe the parties' rights and obligations towards one another. They can deal with everything from who gets to keep the Kenny G boxed CD set, to where the children will live, to how the parties will deal with their mutual friends, to who gets to keep the Ford Pinto. While these agreements are usually all-inclusive, they don't have to be; some issues can be left aside for the courts to deal with. A couple might sign a property agreement dealing with just property issues, or a parenting agreement just dealing with the care of the children when their relationship has ended.

Despite the intentions of the parties when they signed an agreement, the contents of their agreement may still wind up being evaluated by the court, and possibly changed, if one of the parties later has a problem with the agreement. While the court will pay a great deal of respect to any written agreement, if an agreement is unfair or becomes unfair the court will generally be willing to look into things and perhaps set aside the agreement and make an order on different terms.

The Family Law Act encourages people to make agreements resolving their disputes rather than going to court. Section 6 of the act says this:

(1) Subject to this Act, 2 or more persons may make an agreement

(a) to resolve a family law dispute, or

(b) respecting

(i) a matter that may be the subject of a family law dispute in the future,

(ii) the means of resolving a family law dispute or a matter that may be the subject of a family law dispute in the future, including the type of family dispute resolution to be used, or

(iii) the implementation of an agreement or order.

(2) A single agreement may be made respecting one or more matters.

(3) Subject to this Act, an agreement respecting a family law dispute is binding on the parties.

Under s. 214, the court may:

1. set aside part of an agreement, without changing the rest of the agreement,
2. incorporate all or part of an agreement into an order, or,
3. make an order replacing all or part of an agreement.

The test the court must apply in deciding whether to set aside an agreement changes depending on the subject matter of the part of the agreement which is under attack. Some tests, like the test to make a child support order in place of an agreement on child support, are really easy; others, like the test to set aside an agreement on property division, are really hard. If you're asking the court to set aside an agreement, you must read the parts of the Family Law Act that deal with your application.

The Role of Family Law Agreements

The fundamental purpose of all family law agreements is to settle an issue that has come up, or one that could come up, and might be the subject of a legal dispute.

It is almost always better to settle a dispute rather than have the courts resolve your problem for you. It is usually cheaper to settle a dispute rather than take it to court, and negotiated settlements usually give you the best possible chance of maintaining a halfway decent relationship with each other in the future. Family law agreements also give you an incredibly flexible way of resolving your dispute. Your agreement can be tailored to suit your particular circumstances and needs, and can be far more creative in resolving a problem than a court order ever could be.

Marriage and Cohabitation Agreements

Marriage agreements and cohabitation agreements usually talk about what will happen if the parties' relationship breaks down, although they can sometimes address how things will be handled during the relationship. These sorts of agreements are normally made well before the parties marry or begin to live together.

It is important to know that you do not have to enter into a marriage or cohabitation agreement just because your partner wants you to, or just because you're about to marry or start living with someone. While your partner may want you to sign an agreement, you are under no legal obligation to do so. With or without a family law agreement, remedies are almost always available under the common law, the Divorce Act or the Family Law Act if problems crop up later on.

The rest of this website talks about the legal rights and duties involved when a couple lives together, marries, or has a baby, and the entitlements and obligations that couples have when they separate.

Marriage agreements and cohabitation agreements aren't always appropriate. Most people who enter into these agreements have been married before (once bitten, twice shy!), are coming into the relationship with children, are coming into the relationship with significant assets or significant debts, or expect to receive significant assets during the relationship. A young couple who have no significant assets and no children don't necessarily have any particular need to sign a marriage agreement or a cohabitation agreement.

During the Relationship

The sort of terms people want to apply during their relationships are most often financial. That being said, family law agreements are incredibly flexible and can require the parties to do anything imaginable, from caring for the children during the work week, to having a certain number of holidays abroad each year, to always wearing purple shirts on Thursdays, to doing the household chores. Typically, however, people want to address issues like these:

• How will a joint bank account be managed? Will the parties contribute a fixed monthly amount to the joint account?
• How will common household expenses be shared? Will specific bills be paid by a specific party or will they be shared proportionately to the parties' incomes?
• How will unexpected expenses be paid for?
• How will savings, RESP and retirement funds be set up? Will each party be required to contribute a fixed monthly amount?
• How will each party's income during the relationship be handled? What will happen if someone gets an unexpected windfall, like a lottery win or an inheritance?

Some agreements do not deal with these issues, and some paint only a vague picture of the parties' respective financial responsibilities. Other agreements are mind-bogglingly detailed and cover even the tiniest details. In my view, unless someone is spectacularly anal retentive, the less said in a marriage agreement or cohabitation agreement, the better. You wouldn't want every aspect of your relationship governed by a legal contract - that's exactly the sort of thing that encourages relationship breakdown.

After the Relationship

The most common reason why people enter into a marriage agreement or a cohabitation agreement is to specify how property will be dealt with if the relationship comes to an end, although agreements like these can also deal with the payment or non-payment of spousal support. Typically, however, these sorts of agreements just try to preserve a party's interest in an asset after the relationship has ended.

Agreements about the care of children or the payment of child support are only binding if they are made after separation or when the parties are about to separate.

Separation Agreements

Separation agreements are entered into after a relationship has broken down. There is no need for the parties to have moved out or gotten a divorce when the agreement is made; in fact, when a couple is married it's usually best to deal with the separation agreement before you apply for a divorce, just in case you can't reach an agreement.

Separation agreements are always the product of negotiations between the parties and, hopefully, their lawyers. The goal of a separation agreement is to deal with all or some of the issues related to the separation in a way that both parties are as happy with as possible. Separation agreements usually deal with the following issues:

• How will the children be cared for?
• If the children will be living mostly with one parent, how much time with the children will the other parent have?
• How much child support be paid, and which of the children's expenses will be shared between the parents?
• Should a party receive spousal support? If so, how much support should be paid and for how long?
• How will the family property be divided? Should the parties' excluded property be divided?
• How will the family debt be divided?

Separation agreements can cover everything that is a problem for a couple, even things that the court would not ordinarily deal with or be able to deal with.

Separation agreements are binding from the moment they are signed by both parties. They operate from the time they are made and, where children, child support or spousal support are issues, they continue to operate indefinitely into the future. Theoretically, a separation agreement will be binding on the parties until they die. In practice, however, most people stop relying on the agreement once the children have grown up, left home and become independent, even though the agreement may continue to be legally binding on them.

The Elements of a Family Law Agreement

The point of a family law agreement is to make a legal contract that both parties intend to be bound by and that the court can and will enforce if a party doesn't live up to his or her obligations. In order to be legally binding and enforceable, agreements must be negotiated, drafted and signed in a certain way and include certain terms.

Negotiating the Terms of an Agreement

Family law agreements are about really important things like where the children will live, who will pay support to whom and how the parties will divide their property. As a result, the terms of the agreement are almost always the result of lots of talking and negotiating. It is critical that:

1. each person has all of the information that is necessary to figure out what's a good deal and what's a bad deal,
2. each person understands their legal rights and obligations to know what's a good deal and what's bad deal,
3. each person is able express his or her views and contribute to shaping the agreement, and,
4. there is no pressure to reach an agreement beyond the importance of reaching a reasonable agreement and saving money on legal fees and court costs.

Properly negotiating and entering into a family law agreement isn't simply a matter of putting the important parts on paper and signing the document. There must be fairness in the way an agreement is negotiated, fairness in the way it is drafted and fairness in the way it is signed. The people negotiating the agreement must be able to understand the agreement, be capable of agreeing to it and agree to it voluntarily. This is what s. 93(3) of the Family Law Act says about agreements for the division of property and debt:

(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement ... only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;

(b) a spouse took improper advantage of the other spouse's vulnerability, including the other spouse's ignorance, need or distress;

(c) a spouse did not understand the nature or consequences of the agreement;

(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.

This is fairly straightforward:

1. you have to make full disclosure of your income, your expenses, your assets and your debts, and any other information that is important to the agreement,
2. you can't exploit the other party's weaknesses to get a good deal for yourself,
3. you have to make sure that the other party understands exactly what the agreement means and how it will affect his or her life, both now and in the future, and,
4. you can't force or pressure someone to sign the agreement, you can't cheat someone into signing the agreement and the agreement must be reasonable.

Although s. 93 is about property, s. 164(3) says the same thing about agreements for spousal support and I think that this is a pretty reasonable standard to set for all other family law agreements. If you don't want the court to throw out your agreement, you've got to take the time to do it right, and you've got to be fair and not take advantage of the other party.

The legal formalities common to all family law agreements are these:

• The parties to the agreement must provide full financial disclosure to each other and must be completely honest in describing their circumstances.
• The agreement must be in writing. (While oral agreements have been upheld by the courts, it can be very difficult to establish the terms of the agreement, and oral agreements cannot be enforced until a court has determined what the terms of the agreement are.)
• The parties can't be under any sort of legal disability such as insanity.
• The parties must both sign the agreement of their own free will, without any pressure by the other party.
• The agreement must be properly executed, preferably signed by the parties in the presence of at least one witness.

As a general rule, each party who enters into a family law agreement should get independent legal advice, advice from their own lawyer, about:

1. what the agreement means,
2. what rights and obligations the agreement gives each party,
3. how the agreement does or doesn't limit the other legal remedies that might be available,
4. how the agreement may affect each party over the short- and long-term, and,
5. the options and remedies that would have been available if everyone had decided to go to court instead of settling things with an agreement.

Each party should find their own separate lawyer and meet with the lawyer to review the agreement before it is signed. Independent legal advice is important for two reasons: it ensures that the parties to the agreement know exactly what their rights and obligations are; and, it makes the agreement stronger by preventing a party from claiming later on that he or she didn't fully understand what the agreement meant or how it would impact him or her. If you really want to make sure that your agreement will stand the test of time, you've got to make sure that you and the other party have both seen a lawyer about the agreement!

Drafting an Agreement

Lawyers often write family law agreements in a standard format using standard terms, tailored, of course, to the specific needs and circumstances of the parties. Just because family law agreements are often written using standard terms and standard language doesn't mean that an agreement using different wording will be set aside because it expresses things in a different way. As long as it is clear what the intentions of the parties are and as long as the agreement is fair and continues to be fair, the courts will usually uphold the agreement.

A British Columbia company called Self-Counsel Press publishes a variety of do-it-yourself agreement kits along with instructions for completing and executing them, or you might try LawDepot.com, an American company which says that it has family law agreement kits suitable for British Columbia.

There are still other resources available for free which might help, and your library may have a copy of the Self-Counsel Press materials available for loan. Guides to drafting family law agreements will also be available at your local courthouse law library; one of the very best is the Family Law Agreements Manual published by the Continuing Legal Education Society of British Columbia.

The following are the typical elements of a family agreement, using the example of John and Jane Doe, married spouses who are entering into a separation agreement. Note that the examples given are not complete and are provided only to illustrate a point; they should not be used to draft your own agreement!

The Introduction

The introduction to an agreement, also known as the exordium (isn't that a great word?), is the portion of an agreement that identifies the parties to the agreement, provides a title for the agreement, and sets out the date on which the agreement is made. This section typically looks like this:

THIS SEPARATION AGREEMENT is made on this the 1st day of March, 2013.

BETWEEN:

Jane Doe

of 123 King Street, Anytown, British Columbia

("Jane")

AND:

John Doe

of 456 Queen Street, Anytown, British Columbia

("John")

The Recitals

These are paragraphs that describe the parties' circumstances when the agreement is made. They include the basic facts of their relationship, give the names and birth dates of any children, describe the property and debts that the agreement deals with, and give the parties' incomes, among other things.

The recitals are the foundation on which the agreement is built. They should be sufficient to tell a complete stranger why the parties entered not just into any agreement but this particular agreement.

It is important that the recitals be as complete as possible because if anyone tries to challenge the agreement in the future, the recitals will set out the facts that were important to the parties at the time the agreement was made.

In the case of a separation agreement, the recitals often look something like this:

WHEREAS:

A. Jane and John were married on August 1st, 1996 at Anytown, British Columbia.

B. There are two children of the marriage:

i) Buckminster Elliot Doe, born on March 5th, 1998, and
ii) Randall Eustace Doe, born on April 11th, 2000

(together, "the Children").

C. Jane is presently employed part-time as a mason by ABC Construction Ltd. and has an annual income of approximately $34,000.

D. John is presently employed full-time as a chef by DEF Resorts Inc. and has an annual income of approximately $45,000.

E. Jane and John have lived separately and apart since December 25th, 2012 (the "Date of Separation"), when Jane left the family home.

F. Since the Date of Separation, the Children have remained living with John in the family home, and Jane has had parenting time with the Children every other weekend from Friday after school until Sunday at 7:00pm.

...and so forth. Other paragraphs might describe the make, model and value of each party's car, the location and value of the family home, the credits cards owned by the parties and the amounts owing on them.

Essentially, every fact that is relevant to the agreement should be put into the recitals to the agreement.

The Operative Clauses

The operative clauses of an agreement are the nuts and bolts of the settlement. They are the essential terms of the agreement and describe what each party's rights and obligations are. In the case of a separation agreement, the operative clauses might look like this:

IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:

1. Jane and John will live separate and apart.

2. Neither party will directly or indirectly molest, annoy or harass the other or his or her friends, relatives and associates.

3. Except as is specifically provided in this Agreement, Jane and John will each keep all property presently in their possession and control as their own, free and clear of any and all claim by the other.

THE CHILDREN

4. Jane and John will continue to be the guardians of the Children, and John shall have the Children's primary residence.

5. Jane and John will exercise all parental responsibilities with respect to the Children in consultation with each other. Jane and John will make every effort to agree on decisions that need to be made concerning the Children, and will make their decisions in the best interests of the Children. However, in the event that Jane and John cannot agree on a particular decision, John will have the right to make that decision.

6. Jane will have parenting time with the Children every Wednesday night, from the end of school or 4:00pm until 8:00pm, and on every other weekend from the end of school or 4:00pm on Friday until the following Sunday at 8:00pm.

7. Jane will have additional parenting time with the Children the children for one-half of the Children's winter school holiday, the whole of the Children's spring school holiday, and for two two-week periods during the Children's summer school holiday.

CHILD SUPPORT

8. Jane will pay child support to John in the amount of $525 on the first day of each and every month, continuing for so long as the Children remain "children" as defined by the Family Law Act.

...and so forth. Other terms might deal with specific property such as a car or the family home, the payment of debts, and the sharing of the children's expenses. The terms might also say who will pay what bills, whether and for how long spousal support will be paid, who will pay for the divorce if the couple are married, which laws will govern the interpretation of the agreement, and so on.

The Signatures

This is the final section of a family law agreement where the parties will each sign their names in the presence of a witness. The parties can sign the agreement at the same time or separately, at different times and in different locations. Either way, each party's signature must be witnessed, and the witness, after seeing the party sign the agreement, must sign his or her name to the agreement. The witness usually provides some other information, typically his or her full name, address and occupation.

IN WITNESS WHEREOF, Jane has hereto set her hand and seal at the City of Anytown in the Province of British Columbia, this the 20th day of March, 2013.

SIGNED, SEALED AND   )

DELIVERED by Jane    )
in the presence of:  )
                     )
___________________  )  ___________________
Signature            )  JANE DOE
___________________  )
Name                 )
___________________  )
Occupation           )
___________________  )
Address              )

___________________  )

...which would be repeated for John's signature and that of John's witness.

The witnesses to the parties' signatures do not become parties to the agreement and the agreement cannot be enforced against them. The signature of the witness simply says that he or she saw the particular party sign the agreement, in case someone ever denies signing the agreement.

Negotiating Considerations

For many couples, negotiations begin and end over a cup of coffee at the local Tim Hortons. This is fine, providing that everyone is relatively friendly and the parties are approaching their negotiations from a relatively level footing. The court will respect the agreements that negotiations like these produce, on the basis that people are free to make their own bargains and to contract to whatever they like.

The Views of the Court

Problems can arise when negotiations aren't completely fair. In a 2003 case from the Supreme Court of Canada, Miglin v. Miglin, the court held that family law agreements should not be considered under exactly the same standards that are applied to ordinary commercial contracts because family law agreements are usually negotiated at "a time of intense personal and emotional turmoil, in which one of both of the parties may be particularly vulnerable." Some of these vulnerabilities were described in a 2000 case from Ontario, Leopold v. Leopold:

"One party may have power and dominance financially, or may possess power through influence over children ... often both contracting parties are vulnerable emotionally, with their judgment and ability to plan diminished, without the other spouse preying upon or influencing the other. The complex marital relationship is full of potential power imbalance."

In a 2009 case, Rick v. Brandsema, the Supreme Court of Canada added another factor to this list, incomplete or misleading financial disclosure.

Potential unfairness, then, can come from:

1. exploiting a party's emotional or psychological vulnerability;
2. influence over a party through dominance and oppression;
3. control over the family finances;
4. influence over the children's allegiances; or,
5. access to or control over the release of financial information;

Where unfairness is found, the court will be more likely to set aside an agreement or to make an order on terms different than those set out in an agreement. As a result, people negotiating family law agreements must take special care to ensure that everyone is on a level playing field and are negotiating from positions of relative equality. Here are some things that can help:

• Independent legal advice: Make sure everyone has legal advice about the meaning and consequences of the agreement from their own lawyers. Have the same lawyers witness the parties' signatures on the agreement, and sign certificates of independent legal advice.
• Respect vulnerabilities: Stop negotiations when someone is too upset to continue or appears to be compromised in any way. If there is any doubt that a party is not in his or her right mind, down tools and come back to the table later. Consider the need for counselling or therapy before continuing.
• Make full disclosure: Always make full disclosure of all financial facts, whether disclosure has been requested or not. Have documentation available of current income, past income, bank and investment account balances, outstanding debts, property values, values of shares and options, art and jewelry appraisals and so on.
• Never lie: Intentionally misleading someone about the value of something, the amount of a debt, past income and future income expectations or any other relevant fact will always undermine the strength of an agreement. Be scrupulously honest and transparent at all times.
• Know the law: The Divorce Act and the Family Law Act say when and why spousal support and child support should be paid. The Divorce Act talks about how much time children should have with their parents. For married spouses and unmarried spouses, the Family Law Act talks about how property and debt should be divided. Know how the law treats these different subjects and ensure the agreement roughly reflects the law.

The Tests Under the Family Law Act

Unfairness is a key element of the tests under the Family Law Act to set aside the parts of agreements about the division of property and debt and about spousal support as we saw under s. 93(3), reproduced above.

Under s. 44(4) of the act, the court can set aside the parts of agreements about parenting arrangements if the parenting arrangements are not in the best interests of the child:

On application by a party, the court must set aside or replace with an order made under this Division all or part of an agreement respecting parenting arrangements if satisfied that the agreement is not in the best interests of the child.

The same test is used to set aside the parts of agreements about contact. Under s. 148(3), the court can set aside the parts of agreements about child support if it would make a different order:

On application by a party, the court may set aside or replace with an order made under this Division all or part of an agreement respecting child support if the court would make a different order on consideration of the matters set out in section 150.

Section 150 is the part of the Family Law Act dealing with how child support is calculated.

Drafting Considerations

First of all, it is always best to have a lawyer prepare any sort of contract, including family law agreements. While the Self-Counsel Press forms will likely be considered to be legally binding, a family law lawyer will be best able to advise you of the duties and obligations involved in the contract, the rights you will be giving up by entering into the contract, as well as other unexpected but critical issues the agreement might involve, such as:

1. income tax consequences;
2. the transfer of property;
3. dividing property located outside of British Columbia; or,
4. liabilities to third parties and creditors.

If you can't hire a lawyer, here are a few things you will want to keep in mind.

Don't Use "Legalese"

Some people are tempted to use words that sound particularly legal, like using the word "issue" to refer to children. Avoid this at all costs, and try to use plain language to express the content of your agreement. Words like "issue" have a particular legal meaning — in this case first-generation, directly-descended heirs — that are often at odds with what people think the term means. As a result, if you use legalese there is a risk that your contract won't wind up meaning quite what you think it means.

Be as Clear as Possible

Ask yourself these questions:

• What would a complete stranger think of your agreement?
• Would the stranger be able to understand what you mean?
• Are any parts of the agreement vague or capable of more than one meaning?
• Do you understand what the agreement means?

If a term of your agreement has more than one possible interpretation, it may lead to future conflict between yourself and the other party. If there are two cars, make sure each car is identified separately and distinctly, like "Jerry's Ford Pinto" and "Mary's Pontiac Sunfire," and always refer to those cars in that way, and never just as "the car." If a term might mean more than one thing, change it to be more precise and more specific!

Also, remember that while you and your partner may know exactly what "the old spoons" might mean, a court may not, especially if there are a lot of different sets of spoons involved. It's best to be specific, like "the Teaspoons of the World silver spoon collection Jerry inherited from his grandmother Mabel."

Avoid Agreeing to Agree

An agreement that requires a further, future agreement — "the household furniture will be divided as Mary and Jerry will agree" — is open to further, future conflict. Whenever possible, try to limit an agreement to all that can be agreed upon at the moment and try to agree on as much as possible.

Remember the Loose Ends

It is always best to tie up any loose ends. This may require some thought as it isn't always obvious what else needs to be included. If a house has to be sold, for example, who will list it and hire the realtor? Who will live in it until the sale? How will the proceeds be dealt with? These things should all be specified, where at all possible.

Be Realistic

You've got to live with the agreement; make sure it is something you can live with, not just now but in three or five years. Make sure that the obligations you must fulfill under the agreement are obligations that you can reasonably fulfill. Promising to pay off a credit card within a year, for example, isn't always the easiest thing to do and it isn't always practical.

Sometimes people who have separated are desperate to have done with it, to have a deal signed and finished. If you feel rushed into an agreement, step back and take two (or twenty-two) deep breaths. The world will not end if you take a moment or a week to think about something. It is critical that whatever you wind up agreeing to is something that you will still be okay with next month, next year and in ten more years. Be patient and take your time.

Use Sample Clauses with Caution

Before copying a term from a someone else's agreement into your own agreement, make sure you fully understand what that term means. A clause that suits one couple in one situation may be entirely inappropriate for another couple. It is all too easy to adopt a term that sounds good or appropriate, without fully considering what that term means. Be cautious, be prudent, be careful.

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