The Separation Agreement That Wasn't Quite Complete

The situation

Thao and Taras were together for about six years and had one child, but they never married. When they separated, Thao was building a career as an investment advisor and Taras was several years into a senior role at a technology company, with a compensation package that included salary plus a meaningful chunk of employer stock that vested over time. They worked out a separation agreement without much conflict: a shared parenting schedule, child support based on Taras's income, and a lump-sum payment from Taras to Thao meant to reflect the gap between what each of them had built during the relationship.

Because they had never married, there was no automatic right to an equal division of property the way there is for married spouses under the Family Law Act. Instead, their lawyers at the time negotiated a settlement modelled on what an equalization might have looked like if they had been married, based on financial disclosure each side exchanged — bank statements, an RRSP summary, a car loan, and a list of investment accounts. Taras signed a financial statement. Thao signed one too. On paper, both sides knew what they were dividing.

The agreement closed the file. Thao received a lump sum of about $380,000, kept her RRSP and her car, and the two of them settled into a parenting routine that, by all accounts, worked. Neither expected to think about the agreement again.

What the review found

Four years later, Thao was preparing to buy a home with a new partner and pulled together her financial records for a mortgage application. In the process, a mutual friend mentioned — in passing, not maliciously — that Taras had done very well the year they separated, cashing out a large batch of vested stock not long after the agreement was signed. Thao had never seen that asset on his disclosure statement. The financial statement he had signed listed his unvested stock options at a value of essentially nothing, on the basis that they hadn't vested yet and might never pay out.

She came to Treadstone Law with the agreement, the financial statements from both sides, and the fragment of information from her friend. Our first step was not to assume wrongdoing — vesting schedules are complicated, and it's entirely possible for a spouse to under-disclose by mistake rather than by design. We requested the underlying documents: Taras's employer stock plan summary, his vesting schedule as of the date the financial statements were sworn, and his brokerage statements from the months around the separation.

What came back told a clearer story. A significant tranche of Taras's stock had vested only weeks after the financial statement was signed, and it was already scheduled to vest on that date — not a speculative future event, but a known, near-certain payout. He had sold most of it within the year, netting roughly $650,000 after tax. None of that appeared anywhere in the disclosure Thao had relied on when she agreed to accept $380,000 as her share.

Under the Family Law Act, a domestic contract like a separation agreement can be set aside if a party failed to disclose significant assets, debts, or other liabilities existing when the agreement was made. The question for Thao wasn't whether she had a case — she likely did — but what she actually stood to gain by pursuing it, and at what cost.

What we did

1. Modelled what full disclosure would have changed. Before recommending any course of action, we worked out what a corrected settlement would likely have looked like if the vesting stock had been disclosed at the time. Based on the same approach the original agreement used, the gap came to somewhere in the range of $150,000 to $190,000 — not the full value of the stock, since Thao's original share was never meant to be a straight fifty-fifty split of every asset.
2. Weighed reopening the whole agreement against a targeted claim. An application to set aside the entire agreement was available, but it carried real risk. Once an agreement is reopened, a court can revisit terms beyond the one in dispute, including parenting arrangements and support that had been working well for both households. Litigation over the value of unvested stock four years after the fact would also mean expert valuation evidence, disclosure motions, and a timeline measured in months if not longer — with no certainty of an outcome better than a negotiated one.
3. Sent a detailed disclosure demand rather than an application. We wrote to Taras's lawyer laying out the specific gap between what was disclosed and what the records showed, along with our calculation of the shortfall. This put the issue squarely in front of him without immediately escalating to court, while making clear that a formal application under the Family Law Act was the alternative if the matter wasn't addressed directly.
4. Kept the negotiation narrow. We were explicit, from the first letter onward, that Thao was not seeking to unwind the parenting schedule or child support — only to correct the property settlement based on the missing disclosure. Narrowing the ask made it easier for Taras's side to engage without feeling the whole arrangement was under threat, which in our experience speeds up a resolution considerably.
5. Negotiated a top-up payment and a new release. After two rounds of exchanges, Taras's lawyer proposed a lump-sum top-up rather than litigating the disclosure question. We negotiated the number upward from the initial offer and prepared a short amending agreement, supported by updated financial disclosure from both sides this time, that closed the property issue permanently.

The outcome

Taras agreed to pay Thao an additional $165,000, spread over two payments across roughly four months to avoid forcing a disruptive liquidation on his end. He did not admit that the earlier omission was deliberate, and the amending agreement was worded to reflect a negotiated resolution rather than a finding of wrongdoing — a common and often necessary compromise when the goal is closure rather than a court's ruling on intent.

The number fell short of the $190,000 top end of what a full recalculation might have supported, and Thao had to accept that the process took several months of back-and-forth rather than a single decisive event. But she avoided the cost, delay, and uncertainty of litigating a stock valuation dispute years after the fact, and the parenting arrangement and child support that were already working stayed untouched. Both sides signed updated financial disclosure as part of the new agreement, closing off the kind of gap that had caused the problem in the first place.

This is what a partial outcome looks like in family law practice: not a clean win where one side gets everything they might theoretically have been owed, but a resolution that reflects the real gap in disclosure while accounting for the cost and risk of proving it in court. For Thao, the top-up meaningfully changed her financial position going into a new home purchase, and she came away with a settlement that was, this time, backed by disclosure she could actually verify.

What you can learn from this