Family Law Agreements

A family law 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.

DRAFT UNEDITED

Introduction

Spouses who enter into a family law agreement when they marry or plan to marry are entering into a marriage agreement, also known as a pre-nuptial agreement. Unmarried couples who enter into 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 set the rules on what will happen if the relationship breaks down, although they can also talk about how things will be handled during the relationship. The odd thing about marriage agreements and cohabitation agreements that although they mostly talk about what will happen when a relationship ends, that may happen in a year, in five years or in twenty years, or it may never happen, and it can be very difficult if not impossible to figure out what the family's personal and financial circumstances might be like at some unknown point in the future when the relationship ends.

Married and unmarried people who enter into an agreement after their relationship has broken down are entering into a separation agreement. A separation agreement is a settlement of the legal issues that crop up when a relationship has ended.

All of these different kinds of agreement are legal contracts which set out 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.

It is important to know that despite the intentions of the parties when an agreement is signed, 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 make an order that is different than what the parties agreed to in their agreement. (The court's authority to poke into private agreements comes from the fact that the court always has the jurisdiction to make orders under the Family Relations Act or the Divorce Act, no matter what arrangement the parties have made between themselves.)

Marriage agreements and cohabitation agreements can be changed by the court on the breakdown of the relationship, if the court considers the agreement to be unfair in light of such things as:

1. the length of the relationship;
2. the current economic needs of the parties;
3. which party contributed what to the relationship;
4. the fundamental fairness or unfairness of the agreement;
5. a party failed to make full disclosure of his or her financial circumstances at the time the agreement was being negotiated; or,
6. the circumstances in which the parties entered into the agreement were unfair.

Separation agreements can be changed by the court if, for example:

1. the circumstances of a party or the children changed significantly since the agreement was executed;
2. the agreement is or becomes unfair;
3. a party failed to make full disclosure of his or her financial circumstances at the time the agreement was being negotiated; or,
4. the circumstances in which the parties entered into the agreement were unfair.

Neither of these lists are exhaustive. There are all sorts of other reasons why a court might meddle with an agreement; whether the court will or won't depends entirely on the particular circumstances of the parties, the nature and terms of their agreement, and the nature of the complaints either party has with the agreement.

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 which could come up, and might be the subject of a legal dispute.

It is almost always preferable 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 the parties the best possible chance of maintaining a halfway decent relationship with each other into the future. Family law agreements also give the parties an incredibly flexible way of resolving their dispute, since they can be tailored to suit the particular circumstances and needs of each party and can make use of creative terms that cannot be had through a court order.

Marriage and Cohabitation Agreements

Marriage agreements and cohabitation agreements usually set out what will happen if the parties' relationship breaks down, although they can sometimes specify how certain issues will be dealt with during the relationship. These sorts of agreements are normally executed 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 the agreement very much, there is no legal obligation to enter into such an agreement. With or without a family law agreement, remedies are almost always available under the common law, the Divorce Act or the Family Relations 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 arise when a couple separates.

Marriage agreements and cohabitation agreements aren't always appropriate. Most people entering 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 signficant debts, or expect to receive significant assets during the marriage. A young couple who have no assets and no children don't necessarily have any particular need to execute 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 blue shirts on Thursdays, to doing the housework. 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 proportionate 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 parties' income during the relationship be handled? What will happen if someone gets an unexpected windfall, like a lottery win or an inheritance?

Some agreements are silent on 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 certainly deal with custody of children and access, the payment or non-payment of spousal support, and the payment of child support. Typically, however, these sorts of agreements just try to preserve a party's interest in an asset after the relationship has ended. It can be hard to plan ahead of time what ought to happen if there are kids and whether spousal support will need to be paid. In the time between the execution of an agreement and the time a relationship finally breaks down, the parties' individual circumstances may change in entirely unforeseen ways. It is virtually impossible to predict what a couple's financial, emotional and family situation might be on the date that their relationship breaks down, if that in fact happens at all. Even the Amazing Kreskin would have a tough time with this one.

As a result of this uncertainty, marriage agreements and cohabitation agreements are more likely to be varied by the court than separation agreements, particularly when the couple's circumstances have changed in ways not predicted by their agreement or expected by the parties.

Marriage and cohabitation agreements that deal with property have one hidden problem that sometimes makes them inappropriate:

Under s. 68 of the Family Relations Act, the court is authorized to vary a marriage agreement under s. 65 of the act, if the terms of the agreement about property are unfair. Under s. 120.1, the court can assess a cohabitation agreement for fairness and vary it under s. 65, using the standard of fairness that applies to married couples. Without a cohabitation agreement, the Family Relations Act wouldn't apply to property disputes between unmarried people. In other words, sometimes the act of making an agreement dealing with property can invoke the jurisdiction of the court, even though that may be precisely what the parties meant to avoid. More information about the division of property between married and unmarried couples can be found in the Family Assets > Dividing Assets chapter.

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 executed; in fact, when a couple is married it's usually best to deal with the separation agreement before applying for a divorce just in case an agreement can't be reached.

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 arising from the breakdown of a relationship in a manner 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 parties' assets be divided? How will the parties' debts be paid? Should they be allocated between the parties? Separation agreements can cover everything that is an issue for a couple, even things that the court would not ordinarily deal with or be capable of dealing with.

Separation agreements are valid and binding from the moment they are executed by both parties. They operate from the time of execution 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 continues to be legally binding between them.

The Elements of a Family Law Agreement

The point of a family law agreement is that it is a legal contract that both parties intend to be bound by. In order to be legally binding and enforceable, agreements must be negotiated, drafted and executed in a specific way and include specific terms.

Entering into an Agreement

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. In addition, the people entering into the agreement must be able to understand the agreement, be capable of entering into it and enter into it voluntarily. The legal formalities common to all family agreements are these:

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 must be over the age of majority, and cannot be under any other form of legal disability such as insanity. The parties must both enter into the agreement of their own free will, without any duress or coercion by the other party. 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 properly executed, preferably in the presence of witnesses. As a general rule, each party who enters into a family law agreement should get independent legal advice about:

what the agreement means; what rights and obligations the agreement gives each party; how the agreement does or does not limit the other legal remedies each party may have outside the agreement; how the agreement may affect each party over the short- and long-term; and, the options and remedies that would have been available had the parties chosen to litigate the issues settled in the agreement. Each party should find their own separate lawyer and meet with the lawyer to review the draft agreement. This process 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 on him or her.

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 does not mean that an agreement using different wording will not be valid 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, 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.

The following are the typical elements of a family agreement, using the example of John and Jane Doe, a fictitious married couple 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

Also known as the exordium, this portion of an agreement 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 January, 2011.

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 set out the facts on which the agreement is based, and include the basic facts of the relationship, the names and birth dates of any children, as well as the assets each party owns and their respective incomes, among other things.

The recitals are the foundation on which the agreement is built. They should be sufficient to tell a stranger why the parties entered not just into an agreement but this particular agreement. As a result, the recitals are also promises of a sort, in the sense that the parties promise that the facts are true.

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, this section typically looks like this:

WHEREAS:

A. Jane and John were married on August 1st, 1993 at Anytown, British Columbia.

B. There are two children of the marriage, namely

i) Sally Doe, born on March 5th, 1995, and ii) Randy Doe, born on April 11th, 1997 (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, 2010 (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 access to 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 which is relevant to the agreement should be put into the recitals to the agreement.

The Operative Clauses

These paragraphs set out the meat of the matter; they form the essential terms of the agreement and set out what each party's rights and obligations are. In the case of a separation agreement, this section might look like this:

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

1. Jane and John shall live separate and apart and be free from the control of each other.

2. Neither party shall 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 shall 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 shall share the permanent joint custody and joint guardianship of the Children, and John shall have the Children's primary residence.

5. Jane shall have access to the children every Wednesday night, from the end of school until 8:00pm, and on every other weekend from the end of school until the following Sunday at 8:00pm.

6. Jane shall have additional access to 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

7. Jane shall pay child support to John in the amount of $492 on the first day of each and every month, continuing for so long as the Children remain "children of the marriage" as defined by the Divorce Act.

...and so forth. Other terms might deal with specific assets, like a car or the family home, the sharing of the children's expenses, who will pay what bills, whether and for how long spousal support will be paid, who will pay for the divorce, 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 infomation, 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 1st day of January, 2011.

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.

Note that the witnesses are not parties to the agreement and the agreement cannot be enforced against the witnesses. The signature of the witness simply says that he or she saw the particular party sign the agreement in case a party ever denies signing the agreement.

Negotiating Considerations

For many couples, negotiations begin and end over a cup of coffee at the local Tim Horton's. This is fine, providing everyone is relatively friendly and the parties are approaching their negotiations from a 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.

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 with exactly the same standards that are applied to ordinariy 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:

exploiting a party's emotional or psychological vulnerability; influence over a party through dominance and oppression; control over the family finances; influence over the children's allegiances; or, 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 execute 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 jewellry appraisals and so on. Never lie: Intentionally misleading someone about a value, a debt, past and future income expectations or any other relevant factor will always undermine the strength of an agreement. Be scruplously honest and transparent at all times. Know the law: The Divorce Act and the Family Relations 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 couples, the Family Relations Act talks about how assets should be divided. Know how the law treats these different subjects and ensure the agreement roughly reflects the law.

Drafting Considerations

First of all, it is always best to have a qualified professional prepare any sort of agreement. 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:

income tax consequences; the transfer of property; or, liabilities to third-parties and creditors. This segment discusses a few things you might want to keep in mind for those times when hiring a lawyer is not practical or possible.

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 things 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.