The Pension Clause a DIY Separation Agreement Left Out

The situation

Dov and Ari had been common-law partners for nine years, sharing a mortgaged home in Grimsby that they bought together three years into the relationship. Both worked as millwrights, Dov at a manufacturing plant and Ari doing contract maintenance work, with a combined household income in the range of $110,000 a year. Neither wanted a court fight. The relationship had ended on reasonably good terms, and both agreed on the broad strokes: sell the house, split the proceeds, and go their separate ways without lawyers arguing on their behalf.

To save money, they had done what a growing number of separating couples try first — they found a separation agreement template online, filled in their names, the address of the house, and a rough plan for dividing the furniture and a shared vehicle. They brought the finished draft to Treadstone Law not to start a negotiation, but to have it reviewed before they signed it, on the theory that a quick read-through was a cheap way to catch anything obvious.

It was a reasonable instinct. It also turned out to be the right call, because the draft they had built had two gaps that would not have mattered until years later — and by then, fixing them would have meant exactly the court process they were trying to avoid.

What the review found

The first issue was about what counts as property between common-law partners in Ontario. Married spouses are covered by the equalization of net family property under the Family Law Act, a formula that generally treats most property accumulated during the marriage as shared, regardless of whose name is on it. Common-law partners are not covered by that formula at all. For Dov and Ari, property division depended entirely on legal ownership, and on their ability to agree — there was no statutory backstop dividing everything down the middle if they couldn't.

That made their negotiated agreement more important, not less, because it was doing work that the law would not do for them automatically. And the draft they'd written only addressed the house and the vehicle. It said nothing about either partner's workplace pension.

Both Dov and Ari had been enrolled in employer pension plans for the full nine years they lived together. Because they were common-law and not married, those pensions were not subject to the kind of mandatory disclosure and valuation rules that apply on a divorce. If the agreement stayed silent on pensions, each partner would simply keep whatever they had accumulated in their own plan — which sounded fair on its face, until the numbers were compared. Dov's plan, through a longer-tenured position, had accumulated meaningfully more value over the same nine years than Ari's. Left unaddressed, the silent default would have quietly favoured one partner over the other, and neither of them had done that math before bringing in the draft.

The second issue was procedural. The template had no financial disclosure schedule attached — no statement of what each partner owned, owed, earned, or held in savings and pensions at the time of signing. Separation agreements can be challenged and set aside later if a party can show they didn't have a full picture of the other's finances when they signed. A court asked to enforce an agreement years later will look at whether both sides knew what they were agreeing to give up. Without disclosure attached, Dov and Ari's agreement — however fair it felt to both of them in the moment — was vulnerable to exactly that kind of challenge if either one's circumstances or feelings changed down the road.

What we did

1. Explained the property regime before touching the draft. We walked Dov through the difference between married and common-law property rights under the Family Law Act, so he understood why the pension gap mattered and why leaving it out wasn't neutral — it had a direction, and that direction favoured him.
2. Obtained pension statements for both plans. We asked Dov and Ari to each request a statement from their pension administrator showing the value accumulated during the relationship. This gave both of them the same numbers to work from instead of guesswork.
3. Drafted a pension division clause. Rather than splitting each pension in half — which can be administratively difficult and isn't always the right answer — we proposed an offsetting adjustment: Dov would allocate a larger share of the house proceeds to Ari to account for the pension gap, so the overall settlement balanced out without either partner having to touch the other's plan directly.
4. Built a full financial disclosure schedule. Both partners provided a sworn statement of income, assets, and debts, attached to the final agreement as a schedule. This is what makes an agreement hard to unwind later — each side can point to exactly what the other disclosed at the time.
5. Insisted Ari get independent legal advice. We could not advise both partners; that would have been a conflict of interest. We recommended Ari review the near-final draft with their own independent lawyer before signing, both so Ari's interests were properly represented and so the agreement would hold up if ever challenged — a court is far less sympathetic to an argument that someone didn't understand what they signed when they had their own legal advice on it.
6. Finalized and formally executed the agreement. Once both sides had reviewed the pension clause and disclosure schedules, the agreement was signed by both partners and witnessed by Ari's sister Shirin, with the house listing and sale handled separately by a real estate lawyer once the terms were settled.

The outcome

The finished agreement addressed the house sale, the vehicle, and — critically — the pension gap, all without either partner setting foot in a courtroom. The house sold a few months later for a price both had agreed to in advance, and the proceeds were divided according to the adjusted split the agreement set out, with Ari receiving roughly $22,000 more of the sale proceeds than a straight fifty-fifty split would have given, to offset the pension difference Dov had accumulated over the relationship.

Because the agreement included full financial disclosure and independent legal advice for Ari, it was built to withstand a challenge if one ever came. Neither partner has needed to test that, and that is the point of doing it properly the first time: the risk they avoided was never visible to them as a crisis, because it was caught and closed before it had the chance to become one. Had the original draft gone unreviewed, the more likely outcome was years down the line — a falling-out over the fairness of the split, a claim that one partner never knew about the other's pension, and a court application to unwind an agreement that had already been relied on for years.

Dov and Ari's total legal costs stayed modest because the negotiation itself was never adversarial — both had already agreed on the outcome they wanted. The work was in making that agreement complete and durable, not in fighting over it.

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