Do-It-Yourself Separation Agreement in Ontario: What Can Go Wrong

Lawyers cost money, and when you and your partner already agree, writing the agreement yourselves can look sensible. Ontario does not stop you from doing that.

The difficulty is that errors often stay hidden until years later, when one of you wants to rely on the agreement or get out of it. This article covers the common drafting mistakes and how courts approach agreements that were poorly made.

Is a do-it-yourself agreement allowed?

Yes. Ontario guidance says you do not need a lawyer to make a separation agreement, but legal advice before signing is a good idea because it can be difficult to get a court to set an agreement aside. That warning matters in both directions: a bad deal you signed may be hard to undo.

On property, spouses can divide it any way they agree, but each spouse should have their own lawyer review the agreement before signing, and it cannot easily be changed later.

Common drafting mistakes

• No proper signing: a domestic contract is unenforceable unless it is in writing, signed by the parties and witnessed.
• Incomplete financial disclosure: a court may set aside an agreement if a party failed to disclose significant assets or debts that existed when it was made. The spouse who holds the assets is responsible for disclosing and valuing them.
• Pressure or confusion: each person should understand the terms and not be pressured to sign, or the agreement can be challenged in court.
• Child support that ignores the guidelines: the Federal Child Support Guidelines, which apply under the Divorce Act, set the presumptive amount as the table amount plus any section 7 expenses. If you are not divorcing, which guidelines apply is worth confirming with a lawyer. A court may disregard an unreasonable child support provision.
• Unclear pension wording: a pension transfer needs a certified copy of the agreement stating the valuation date, the entitlement and the amount.
• Assuming CPP can be waived: only some spousal agreements can prevent a CPP credit split, and Ontario is not among the listed provinces.

How courts treat poorly made agreements

A court may set aside a domestic contract, or a provision in it, where a party failed to disclose significant assets or debts, did not understand the nature or consequences of the contract, or otherwise in accordance with the law of contract.

The Court of Appeal for Ontario applies a two-stage test. First, one of the listed circumstances must be engaged. That alone is not enough, because the court then decides whether it is appropriate to use its discretion to set the agreement, or a provision in it, aside, and fairness is a relevant consideration at that stage. In other words, a flaw does not guarantee the agreement will be cancelled.

The Court of Appeal has also said financial disclosure is a paramount consideration under Ontario's regime. Skipping it is one of the riskiest shortcuts.

Terms that stay open to review

Some parts of a home-made agreement can be reviewed no matter how carefully both of you signed. A court may disregard a provision about a child's education, moral training, decision-making responsibility or parenting time if doing so is in the child's best interests.

A court may set aside a spousal support provision or waiver where it results in unconscionable circumstances, where the person it benefits qualifies for support from public money, or where support payments under the contract are in default. On the other hand, the Court of Appeal has upheld a decision not to set aside a support waiver where there was no finding that the parties failed to understand or intend it. A waiver that both people understood is harder to challenge.

Lower-cost middle options and next steps

DIY and full legal drafting are not the only choices. In family mediation, a neutral mediator helps the parties negotiate their own agreement, but does not take sides or give legal advice. To make a mediated agreement legally binding, each party should get advice from a different lawyer before signing. Mediation fees can vary, and some court-connected mediation is offered on a sliding scale based on income and number of dependants.

Ontario guidance recommends that separating spouses each have their own lawyer, and a lawyer who is asked to act for both must explain that information cannot be kept confidential from the other.

• Swap financial statements and supporting documents before you negotiate.
• Write down every term, including who pays which debts and how any pension will be handled.
• Check child support against the guidelines.
• Have each of you get your own lawyer to review the agreement before you sign.
• Sign with a witness present and keep copies.

Frequently asked questions