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Estate planning for Separated Couples – reasons to get your will done or re-done

In Ontario, simply being separated from your spouse and not obtaining legal divorce may put your estate plan in jeopardy. Section 17(2) of the Succession Law Reform Act (“SLRA”) provides that for parties that have obtained legal divorce, any reference to a former spouse in an individual’s will is revoked and the will is construed as if the former spouse had predeceased the testator (party preparing the will). This is helpful due to the simple fact that after divorce, there is clearly a shift in interests and priorities and the law protects you in this regard. However, unlike the provision protecting those who obtain a divorce, there is no similar provision in a situation where spouses are just separated. That being said, it is a common misconception to believe that if you are separated, your ex-spouse will not inherit anything.

In fact, where spouses are separated (assuming no update to the will) and one party passes away, the surviving spouse maintains his or her entitlement under the will. The result is not much different if there was no will to begin with – the separated spouse may still qualify under the definition of a “spouse” under the intestacy rules.

A simple example may serve to bring the point home: if you have separated from your spouse (and not obtained a divorce) and own property jointly, the property may pass to the former spouse automatically. A visit to the lawyer’s office can prevent this from happening so that your portion of the property passes on to whom you intend. This may be to provide for your children, your siblings or even your new common law partner.

Along with preparing or revising an existing will, upon separation, one must ensure they update their insurance policies, registered plans, and any pensions. Further, unless you want your separated spouse to be able to make your property and personal care decisions, you must attend to preparation of your power of attorney documents as well.

Since separation can drag on for some time, individuals need to ensure they take a close look at their assets and related estate documents to avoid unintended consequences.

The above serves as general information only and is not to be relied on as legal advice. Please contact your lawyer for your specific circumstances.

Separation and Divorce

Clients often contact our office inquiring whether we can assist with their divorce. In these cases, one of the first questions I always ask is how long they have been separated for.  If they tell me they’ve only been separated for a few months I inform them that they can’t get divorced unless one of the following things occurs:

The Divorce Act (“DA”) requires that there be a “breakdown of the marriage” under s. 8(2).

This means that:

  1. You live separate and apart for one year;
  2. The other spouse has committed adultery; or
  3. One spouse has treated the other with physical or mental cruelty.

If you meet one of the criteria above then you can get a divorce. If you are separated, you can start an application for divorce at any time, but the court will not grant you the divorce until you have been separated for one full year.  The DA even has a section on how to determine that period of separation under s. 8(3) The basic requirements are that the spouses have an intention to separate and that they do not try to reconcile their relationship for more than 90 days.

Keep in mind that divorce only applies to married spouses; if you are common law then you only need to be separated in order to effectively terminate the relationship. See our previous blog post covering the difference between common law and married spouses.

Even if you start the divorce application, the divorce does not actually take effect until 31 days after a Judge provides a judgment granting the Divorce (see s. 12(1) of the DA).  Furthermore, s. 11(1)(b) of the DA states that a divorce will not be granted until the court is satisfied that reasonable arrangements have been made to support the children of the marriage.

A divorce or annulment is the only way to end a marriage.

You won’t NEED any formal documentation to show that you are separated, however it is HIGHLY recommended that you get a separation agreement drafted to protect your interests. http://www.rabideaulaw.ca/separation-agreements-an-overview/

Adultery and Abuse

The “separated for a year” rule does not apply if there is a breakdown of the marriage resulting from adultery or abuse. If a person is relying on adultery or abuse as a reason for the breakdown of marriage, s. 11(1) of the DA makes it clear that there can be no collusion, condonation, or connivance on the part of the spouse bringing the application.

This means that the spouse bringing the application for divorce cannot accept the behaviour or conspire to orchestrate the adultery or abuse. Also, the spouse committing the adultery cannot use it as a reason for the breakdown of the marriage.  However, the court will grant the divorce if it is their opinion that the public interest would be better served by granting the divorce.

The DA also provides a definition for collusion.  Here, collusion means an action taken directly or indirectly by a spouse applying for divorce to subvert the administration of justice.  This includes an agreement or conspiracy to fabricate, or suppress evidence to deceive the court (see s. 11(4) of the DA).

The Separation – Living Separate and Apart

In order to be separated, courts need to see that you are living “separate and apart”.

But what does this mean exactly?

There are a few factors that courts will consider regarding whether or not two persons are actually separated. Simply saying you’re separated may not be enough.

Factors courts will consider to determine if you are separated include the following (see paragraphs 37-47 of T.R. v A. K, 2015 ONSC 6272)

  • Is there a physical separation, (Note that this doesn’t have to mean spouses live in separate houses)
  • An intent of ending the marriage/relationship
  • Absence of sexual relations
  • Level of communication between the spouses
  • Are there joint social activities
  • Meal patterns
  • What chores are being performed between them
  • How do others view their relationship

Keep in mind that this is not an exhaustive list as courts can consider other factors.  Also, you don’t need to meet all of these factors in order to be considered separated.  What needs to occur is that courts see a physical separation and that you both are seeking to pull out of the marriage (or common law relationship). What is important is the INTENTION to separate.

Does the date of separation matter?

The actual separation date or valuation date as defined in s. 4(1) of the Family Law Act is an essential part of the separation process.  The valuation date is the date from which all values related to property and support are calculated from.  As an example, a valuation date in the winter versus one in the spring or summer could affect the value of the matrimonial home and how much is to be distributed between the parties.  This is why it is crucial to seek out a family lawyer to advise you of your rights and responsibilities to ensure that you and your family are properly protected.

Keep an eye out for future blog posts discussing issues related to property.

The Process of Getting a Separation Agreement Done

The Process of Getting a Separation Agreement Done

What follows below will be a general overview of the process for completing a separation agreement.  It begins by contacting our office and concludes with the completed separation agreement that is provided to the client.

Please note that this is not a precise account of how the process works, but merely a general guideline.  Each situation is unique. Furthermore, different types of agreements and different types of retainers with our firm necessitate varying approaches to this process.  Keep in mind that this process is not limited to just separation agreements, but can be applied to any kind of domestic contracts such as a cohabitation agreement or a marriage contract (and/or a prenup).

Step 1 – Initial Contact: A potential client contacts our firm by phone, email or in person, and we arrange an in office meeting with one of our lawyers for a consultation (click here if you would like to book a consultation, hyperlink to relevant part of website).

Step 2 – The Consultation: The potential client brings any relevant documents to the consultation so that we can determine what may be the best legal solution to their legal problem.  This consultation is an information session, and we are not hired at this stage to represent the potential client.

Step 3 – The Retainer (aka the Contract): If the potential client wishes to draft a separation agreement, we will draft a formal retainer (i.e. contract between you and the lawyer) that must be signed by the client and our firm before we begin any work. This document covers the type of legal services that the firm would provide to you.

Step 4 – Gathering Info: Once the retainer is signed by the potential client and our firm, that potential client is now our client.  We provide the client with a questionnaire that asks them to provide as much information as possible including things such as their finances, children, employment, assets and debts.

Step 5 – Drafting the Agreement: After the questionnaire is complete, the client provides it to our firm and we use that information to draft a separation agreement.   This can also include drafting financial statements.  We take this time to include the details from your questionnaire into the agreement, and include any specific terms or conditions that may have been discussed.  During this stage we may ask you for more information in order to effectively include all necessary items.

Step 6 – Reviewing the First Draft: Once the first draft is completed, we contact the client to review the agreement with them to see if any other provisions need to be included or removed.  This is to ensure that the agreement matches the client’s intentions and wishes.

Step 7 – Opposing Party Review and Negotiation: Once the first draft is approved by the client, we send a copy of the draft to the other spouse’s lawyer for them to review.  If any terms need to be adjusted, we contact the other lawyer to negotiate until all parties agree to the terms and conditions of the separation agreement.

Step 8 – Final Review and Execution: Once everyone is in agreement, we create a final draft copy of the agreement for your review.  We arrange a meeting where you attend our office and we review the final draft of the agreement in detail.  Should everything be in order, we execute the agreement by having you sign the agreement with a witness and date your signature.  This is done on multiple copies of the agreement, usually one for each party and one for each lawyer totalling 4 copies.  Once executed, the lawyer at our firm will sign an Independent Legal Advice Certificate (“ILA Certificate”).

Step 9 – Completion: We then provide all signed copies to the opposing party for them to sign, witness and date, and for their lawyer to also provide an ILA Certificate.  Once that is done, they mail two completed copies back to us and we provide the client with one completed separation agreement completing the process.

Typically this process takes about 2-3 weeks to complete.  This timeline is dependent on how much negotiation needs to take place in order to resolve all outstanding issues.  However, negotiating the details of your separation outside of court is a faster, simpler, and more cost-effective means of dealing with issues.

Should your spouse provide you with an agreement, we can discuss providing Independent Legal Advice services for you.  This would essentially reverse the roles of the parties in the process outlined above.

If you are looking to get a domestic contract drafted, feel free to contact our firm to see what legal services may be best suited to your particular needs.

Separation Agreements: An Overview

Separation Agreements: An Overview

What is a separation agreement?

Separation agreements are contracts between two persons in a romantic relationship regarding their familial rights and obligations towards each other.  These types of agreements allow people to negotiate issues such as how children will be taken care of, what kind of support will be paid between the spouses, and how to distribute assets such as the home.  Once the issues are identified and agreed upon, the separation agreement can provide certainty and peace of mind for both parties as they move on from the relationship.

 

Do I need a separation agreement to get divorced or get separated?

If you are married, (if you aren’t married skip on to the next paragraph) you don’t actually NEED a separation agreement in order to get divorced or to separate from your spouse.  The Divorce Act requires that there be a “breakdown of the marriage”.  This means that:

  1. you live separate and apart for one year;
  2. the other spouse has committed adultery; or
  3. one spouse has treated the other with physical or mental cruelty.

If you aren’t married, all that is required is that you live separate and apart.  However, what that means can be complicated depending on your circumstances.

Regardless of how you and your spouse (partner, husband, wife, boyfriend, girlfriend etc) broke up, getting a separation agreement can help both parties negotiate and finalize matters between them without involving costly and lengthy court proceedings.

 

We’re working well together, why bother with an agreement?

Although you and your spouse are cooperating well at this point, there is no telling how well you two will work together in the future.  If something happens in the future where the other person suddenly refuses to work with you, and the both of you do not have an agreement in place, there could be severe consequences regarding your ability to see your children, how support payments will be made, or how assets should be redistributed.  The best thing to do is to ensure that both of you are on the same page by drafting an agreement outlining your rights and responsibilities so you won’t be faced with any unpleasant surprises in the future.

 

Why can’t I just download an existing agreement and draft it myself?

You can.  Nothing prevents you from drafting a separation agreement that both you and your spouse sign together.  However, this is an agreement that will bind the both of you into the foreseeable future.  You want to make sure that all angles are covered and that you did not omit something or improperly word something that could have serious repercussions for you in the future.  There is no guarantee that the online agreements out there are up to date or that they have the appropriate clauses to protect you especially if your ex tries to challenge or have it set aside in court.  Having a lawyer draft the agreement for you is the best way to ensure that all important issues are covered, that everything is current to today’s laws in your jurisdiction, that the law surrounding those issues regarding your rights and obligations are explained to you, and that the agreement is executed properly.

 

Can I only get an agreement at separation?

No.  There are multiple types of “Domestic Contracts” under the Family Law Act.  Other types of agreements include:

  1. a cohabitation agreement if you are cohabiting (living) with another person and are not married;
  2. a marriage contract if you are getting married (colloquially known as a pre-nup); or
  3. a marriage contract after you get married (colloquially known as a post-nup).

Be mindful that there are certain issues (eg. Access to children) that cannot be addressed in these other types of agreements.  Feel free to contact our firm to see what agreement may be best for you.

 

What are the best reasons for hiring a lawyer to draft an agreement?

One of the biggest concerns for separating spouses is how the children will be taken care of.  The agreement can help both parties create a stable and effective parenting plan for how decisions will be made for the children such as residence, school, health care, religion and education.  The agreement can also help set out a visitation and/or time sharing schedule for the parents to follow.

Another major concern for spouses at separation is the family home.  Usually, this is the largest asset that both parties have during the relationship, and a separation agreement can go a long way to outlining who is getting the home, or how the home is to be sold and distributed between the two of you.  Also, if one of you is looking to purchase a new property after separation, mortgage companies will usually ask for an agreement between the two of you before they are willing to provide a mortgage for the new property.

Other assets that can be dealt with in agreements can include: joint bank accounts, debts, pensions, RRSP’s (Registered Retirement Savings Plans), pets, cars, and life insurance.

 

How do I make sure the agreement is enforceable?

Ensure that it is signed, written, and witnessed.

Ensure that you are well educated on:  what the law is, the legal meaning and consequences of the agreement terms and the assets and debts of both parties.  Hiring a lawyer to draft the Agreement and/or provide you with independent legal advice (“ILA”) provides this assurance.

ILA is provided when one party has their own lawyer review and explain the agreement to them.  This helps to ensure that the party understands the rights and obligations they are agreeing to.  The lawyer then signs an “ILA Certificate” stating that they reviewed the agreement with their client, that their client has not been forced into the agreement, and that they believe their client understands it.

Another common addition to agreements is a sworn financial statement.  Sworn financial statements outline things such as the parties’ income, their monthly spending, and their assets and debts.  Having this financial picture helps clearly identify the financial situation of both parties so that there is no confusion regarding either party’s assets.

Having both ILA and sworn financial statements in your agreement goes a long way to ensuring that the agreement won’t be overturned by a Court in the future  (if it ever ends up that) and that you have a strong shield to protect you should anything be challenged.

Finally, you can look at separation agreements as a ”living document” meaning that it should grow and change as your financial and/or family situation changes.  It’s a good idea to review it every few years to ensure that the terms of the agreement still say what you want them to say.

The Process of Executing a Separation agreement