Agreements are used in family law in a number of different ways and are essential and relatively inexpensive tools for resolving potential or ongoing disputes outside of the courtrooms.
The most common types of family law agreements are:
- marriage (or prenuptial) agreements – prepared at the beginning of the marriage or in anticipation of a marriage;
- cohabitation agreements – prepared for an unmarried couple who are living or preparing to live together;
- separation agreements – prepared upon the breakdown of a marriage or a common law relationship; and
- parenting agreements – prepared for the parties whose only legal relationship is parenthood or who wish to deal with the issue of parenting, only.
The greatest advantage of entering into an agreement is that it gives control to the parties to determine their own outcome, and can be adapted to suit the parties’ specific circumstances and needs. This is true whether the agreement is in anticipation of marriage, or comes into play upon marriage breakdown. Although the provisions of each agreement are unique, most deal with child and spousal support, child custody and guardianship, parenting arrangements, parenting time, and the division or management of property and debt. In a cohabitation/marriage agreement the most common issues are property and debt division upon relationship breakdown or one spouse’s death, spousal support, and a step-parent’s obligations to his or her stepchildren.
The agreements also often include a dispute resolution provision.
To put in greater detail, in family law agreements people typically want to address questions such as the following:
- How will the children be cared for? How will important parenting decisions about the children be made? How much time with the children will the other parent have?
- How much child support will 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 each party’s income during the relationship be handled and 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 the family property and debt be divided? Should the parties’ excluded property (property not considered family property) be divided?
- How will savings, RESPs, RRSPs, and retirement funds be managed? Will each party be required to contribute a fixed monthly amount?
While contracts, in general, do not have to be in writing to be binding, all family law agreements should be recorded in writing because a written agreement is:
- proof of the terms of the agreement between the parties;
- can be used to establish key facts that will be relevant when the agreement is to operate;
- avoids “statute of fraud” difficulties which require certain transactions, notably those concerning land, to be in writing; and
- includes specific provisions necessary to achieve desired income tax consequences.
Although family law agreements are subject to the court’s review, the Family Law Act provides significant deference to agreements when the process used to negotiate the agreement follows common sense rules of fairness in bargaining. Having said that, the Family Law Act provides for setting aside all or part of an agreement if the agreement is unfairly constituted or the terms are significantly unfair.
In order for the agreement to be considered fair, the parties to the agreement must provide full financial disclosure to each other and must be completely honest in describing their circumstances before entering into the agreement. For this reason, it is vital that the parties collect and exchange all relevant information and documentation concerning their assets, liabilities, income, expenses, and wishes regarding any children. Failure to disclose is a basis for setting aside an agreement on property division or spousal support, which creates extra stress and financial burden in the future.
All agreements should be reviewed from time to time and changed if circumstances warrant.
In any event, it is crucial to speak to a family lawyer to make sure everyone has independent legal advice about the meaning and consequences of the agreement from their own lawyer.
If you have questions, or would like more information, please contact us.
NOT LEGAL ADVICE. Information made available on the Connect Family Law website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. One of our lawyers would be pleased to discuss any specific legal concerns you may have.