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

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 to those arrangements and they're reasonably fair. In fact, s. 92 says this:

<blockquote><blockquote><tt>(d) value family property or family debt differently than it would be valued under section 87 [valuing family property and family debt].</tt></blockquote></blockquote>

In other words, in making an agreement about the division of property and debt, spouses can divide unequally the things they're supposed to divide equally, divide things they're not supposed to divide and not divide things that are supposed to be divided. As long as you both agree, you can do pretty much whatever you want in a separation agreement.

===The Effect of a Valid Agreement===

 

When spouses have an agreement about the division of property and debt, s. 94(2) 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.

===Asking the Court to Set Aside an Agreement===

Family law agreements are private contracts reached between two people. While family law agreements can be attacked and enforced on the principles of contract law, the court will usually give considerable weight to family law agreements. Without proof of some serious problem like duress or coercion, or some other issue, the court will treat the agreement as representing the honest and informed intentions of the parties to settle their dispute.

 

 

 

====Agreements on Property and Debt and the ''Family Law Act''====

 

The ''Family Law Act'' provides some important rules about agreements dealing with property and debt. First, under s. 94(2), the court cannot make an order dividing property and debt if there is an agreement about property and debt until the agreement is set aside. Second, under s. 93, two tests are set out to help the court decide when an agreement on property and debt should be set.

 

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>

 

Now, even if there are problems with an agreement under s. 93(3), the court can still decide not to set aside the agreement if "it would not replace the agreement with an order that is substantially different from the terms set out in the agreement" under s. 93(4). In other words, if the court wouldn't make a different order than the arrangements the parties agreed to, it might just leave the agreement alone.

If there are no problems under s. 93(3), the second test, at s. 93(5), allows the court to set aside agreements that are "signficantly unfair" taking into account:

<blockquote><tt>(a) the length of time that has passed since the agreement was made;</tt></blockquote>

<blockquote><tt>(b) the intention of the spouses, in making the agreement, to achieve certainty;</tt></blockquote>

If the court sets aside an agreement under s. 93(3) or (5), the court wil then make an order dividing property and debt between the spouses.