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

A separation agreement is contract which records a settlement of the issues which 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 fair 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 to those arrangements and they're reasonably fair. In fact, s. 92 says this:

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.

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 resilience to later court challenges than was provided to agreements under the old ''[[Family Relations Act]]''.

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 page, but for a more thorough discussion you should look through the [[Family Law Agreements]] chapter.

Because of the importance the court will usually give to an agreement, it can sometimes be necessary to attack the agreement itself under the law that applies to contacts. An agreement might be found to be invalid for one or more of the following reasons:  

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.