Do I really need to consult a lawyer if I am separating from my spouse amicably and we have already agreed on how to share parenting, how much support is to be paid and how to divide matrimonial property?
Many couples who are in the process of separating or have recently separated ask themselves these questions. Over the years, as family law lawyers, we have seen many clients who made the decision to settle the terms of their separation themselves and sign separation agreements purportedly setting out the terms of custody and access of minor children, child support, spousal support and division of property without the benefit of one or both parties consulting a lawyer. One or both spouses consult the myriad of resources available online and find a precedent separation agreement online. This may become more prevalent in the current troubled economy when spouses are trying to cut costs as much as they can, particularly in circumstances when they are separating and having to fund multiple households. These clients come to us after the fact, sometimes many years after they have separated, when issues or disputes arise. Some clients come to us because they never obtained a divorce after separating and now want to remarry years later.
Signed separation agreement without independent legal advice
Clients who have negotiated and signed a separation agreement without a lawyer providing independent legal advice may be shocked to discover that their separation agreement is not entirely enforceable, which is most disconcerting as parties have usually rebuilt their new separate lives based on the support and property division terms set out in their agreement.
If the separating couple is married, the Matrimonial Property Act of Alberta (the “MPA”) governs the division of their property. Separating spouses can enter into agreements to divide their property in a way that does not strictly follow the division rules in the MPA but those agreements are only enforceable if each spouse has acknowledged, in writing, before a lawyer (other than the lawyer acting for the other spouse) that the spouse is aware of the nature and effect of the agreement, is aware of the possible future claims to property the spouse may have under the MPA and intends to give up those claims to the extent necessary to give effect to the agreement, and is executing the agreement freely and voluntarily without any compulsion (i.e. coercion, undue influence, duress) on the part of the other spouse. When this acknowledgment is done, the lawyer signs a certificate of acknowledgement that is usually attached to the separation agreement.
If the aforementioned acknowledgement is not made in writing before a lawyer, then the agreement as to division of matrimonial property may be unenforceable. If the couple did not obtain a divorce, one or both spouses have the ability to revisit the division of matrimonial property even if many years have passed. If one spouse later takes a property dispute to court, the terms of the separation agreement can still be taken into consideration but the Judge would also have to take into consideration many other factors, which are set out in the MPA, to determine what is a just and equitable distribution.
A Judge would first have to determine what matrimonial property (and matrimonial debt) exists today. In Alberta, matrimonial property is valued as at the date of trial or an agreed upon current date. Property is not valued as at the date of separation.
A determination would then have to be made on what property may be exempt from the matrimonial property division, such as assets that were acquired prior to marriage, inheritances or gifts to one spouse, or personal injury awards. There is a presumption that matrimonial property acquired during the marriage be divided equally between the spouses. However, in any determination of how matrimonial property should be divided, a Judge has the discretion to weigh the various factors set out in the MPA in deciding what is just and equitable.
In order to determine what factors need to be considered and what would be a just and equitable division of property, financial disclosure would have to be exchanged and valuations of property completed. This may have to be done as of the current date, as of the date of separation and for the period between separation and the current date. Examples of factors that may be considered are: whether property was acquired when the spouses were living separate and apart, whether a spouse dissipated property, and the financial circumstances of each spouse at the time of marriage and at the time of trial. Many other factors may be relevant. The result is that the more time that passes following separation, the more disclosure that will have to be made and the more complex the factors that may be taken into consideration in dividing matrimonial property at trial or mediation/arbitration.
It is simpler and more cost effective to consult a lawyer at the time of separation to help you determine what may be exempt and non-exempt matrimonial property and what factors the Court may take into consideration in your specific circumstances in determining how property should be divided under the MPA. The lawyer can help you negotiate the division of matrimonial property and sign a separation agreement with the required acknowledgements so that your agreement is enforceable. You can move on with your life without the fear of later having to exchange extensive financial disclosure years after separation and potentially handing over more property to your former spouse, or taking on responsibility for matrimonial debt that may have been incurred by your spouse post-separation.
This blog focused on the implications of signing a separation agreement without independent legal advice on the division of matrimonial property. Parenting and child and spousal support provisions in such an agreement require separate considerations which can be discussed with your family law lawyer.