Financial Disclosure Before Signing a Separation Agreement in Ontario

If you are about to sign a separation agreement and you suspect your spouse has not shown you everything, you are right to slow down. The numbers in an agreement are only as good as the information behind them, and agreements are hard to undo once signed.

This article explains what financial disclosure means in Ontario, who is expected to provide it, what can happen if it was incomplete, and what you can do before you sign. It is general information, not advice on your situation.

What financial disclosure means

In Ontario family court, financial disclosure means giving the other party and the court information and documents about your income, expenses, assets and debts. In court, Form 13 (Financial Statement (Support Claims)) is used for support-only cases, and Form 13.1 (Financial Statement (Property and Support Claims)) is used where property or debts are in issue.

Some court cases do not need a Financial Statement, such as certain child support cases where only the table amount is claimed. If you are negotiating privately, no court is asking for those forms, but the same categories make a sensible checklist.

• Income: what each person earns and from what sources.
• Expenses: what it costs each person to live.
• Assets: bank accounts, investments, real estate, business interests and pensions.
• Debts: loans, lines of credit, credit cards and other liabilities.

Who has to disclose, and why it matters

The Court of Appeal for Ontario has said financial disclosure is a paramount consideration under Ontario's regime, and that the spouse who holds the assets is responsible for disclosing and valuing them. In practice, that means you should not have to prove what your spouse owns before they show you.

For married spouses, the figures drive the property division. Each spouse adds up what they owned on the separation date, minus debts and excluded property, and subtracts what they owned on the date of marriage; the spouse with the larger net family property pays the other an equalization payment. Excluded property can include inheritances, gifts from someone other than a spouse and personal injury damages. The matrimonial home is treated differently, because spouses share its full value even if one owned it before the marriage.

Pensions deserve special attention. Ontario guidance says to ask the pension administrator for information about a pension's value. Unmarried couples are not covered by equalization, and a partner who contributed to property the other owns may have a claim that is settled in the separation agreement.

When incomplete disclosure can undo an agreement

A court may set aside a domestic contract, or a provision in it, where a party failed to disclose significant assets, or significant debts or other liabilities, that existed when the contract was made. The other grounds are that a party did not understand the nature or consequences of the contract, or any other reason under the law of contract.

The Court of Appeal for Ontario uses a two-stage test. First, one of those circumstances must be engaged. That alone is not enough, because the court then decides whether to use its discretion to set the agreement or a provision aside, and fairness is relevant at that stage. Ontario guidance also warns that it can be difficult to get a court to set aside a separation agreement.

Some terms get extra scrutiny. A court may disregard a child support provision that is unreasonable under the child support guidelines, and may set aside a spousal support waiver that results in unconscionable circumstances. On the other hand, a spousal support waiver was upheld in one Court of Appeal case where there was no finding that the parties failed to understand or intend it.

Steps to take before you sign

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. Each spouse should have their own lawyer review it, since an agreement cannot easily be changed later.

• Ask in writing for income, expense, asset and debt information, and for supporting documents.
• Compare what you receive with what you already know: tax returns, statements, property records and the lifestyle you lived.
• Ask the pension administrator about the value of any pension.
• Be sure you understand every term and are not being pressured to sign.
• Confirm the agreement is in writing, signed by both parties and witnessed, or it cannot be enforced.
• Have your own lawyer review it before you sign.

What to do next

If disclosure is still missing, do not sign to avoid conflict. Raise the gaps in writing and keep copies. If you have already signed, speak to a lawyer promptly about whether any ground applies.

Time limits matter. An equalization claim must generally be made within six years from the day of separation, or two years from the day the divorce is final, whichever comes first. The court keeps a residual discretion to extend time limits under the Family Law Act. A lawyer can tell you how these rules apply to your dates.

Frequently asked questions