What is a Separation Agreement & Why Do You Need One?

Understanding what a separation agreement is and why you need one is one of the first steps in navigating your separation.

Many family lawyers are embracing flat rate billing with the rise of AI and automation.

What is a Separation Agreement?

A separation agreement is a legally binding document that outlines your parenting arrangement, child support and spousal support agreements, as well as property distribution and equalization payments. This document is what you will file to the courts along with your divorce application when you file for divorce.

Why You Need a Separation Agreement

When people first start out, they often don't realize they need a separation agreement before moving on to the divorce process. Obtaining a separation agreement is actually the main component of your separation.

If you and your former spouse have children and/or property together, you will need a separation agreement. It's a written record of the agreements you make and ensures that you both understand how you are dividing property and what your parenting arrangement is. This helps prevent a disagreement in the future and serves as a written record for any disputes that could arise.

If you have property or children you need a separation agreement before filing for divorce.

Other professionals will need your agreement to facilitate the various transactions outlined in your financial settlement. Your separation agreement serves as instructions for lawyers, financial advisors, and lenders. A bank will not extend funds or refinance unless there is a signed agreement showing a finalization of the financial matters between you. A financial manager will not split your RRSP funds if it is not outlined in your signed separation agreement.

What's Included in a Separation Agreement

Because it's hard to know exactly what a separation agreement looks like, we've outlined what's typically included in a separation agreement. While this is not an exhaustive list, it can help you wrap your mind around what a separation agreement is.

Recitals

The recitals are the clauses of the agreement that state facts, your property, and all of the assets you own. The rest of the agreement contains the sections that explain what is agreed upon for each of those items.

Parenting Arrangements

The parenting section will include all the decisions you made regarding your co-parenting agreement.

The following questions are typically addressed in this section:

• Will you have a joint parenting arrangement, or will one parent have sole guardianship?

• How will you keep each other informed? By text message, weekly email, or shared calendar?

• When do you consult each other about traveling with the children or introducing new romantic partners?

This section will include answers to these questions as well as your co-parenting schedule, which includes addressing holidays and birthdays.

Financial Support

Child & Spousal Support

Once you've calculated support and come to an agreement, this section will outline final decisions made around child and spousal support. Answers to the following questions are typically included in this section:

• How much will each party be paying?

• What day will support start, and will you review it each year?

• What types of special expenses do you need to factor in for the children?

Child and Spousal support are calculated based off of income and all the details about how much and when support is paid will be outlined in this section.

Medical Coverage

This section will address whether either of you will continue to cover each other or your children under your extended medical plan.

Life Insurance

This section will outline whether either of you will maintain or obtain life insurance as security for spousal and/or child support.

Retirement and Investment Assets

Pensions & CPP

If either of you have pensions, this section will outline your decisions around keeping them individually or dividing them.

Financial Accounts and Assets

This section will address the accounts you own both jointly and separately, what will you do with them and how will they be divided.

It will also address if you will be keeping or dividing your RRSP's between both of you to equalize the amounts. If you have an RESP, it will address what you will you do with it upon separation and what will happen to the RESP if your child hasn't used the full amount by a certain age.

Property and Debts

Family Residence

If you own property this section will outline decisions around the residences or rental properties you own. It will talk about whether you will be transferring ownership to one party or selling the family home.

Vehicles

This section will outline decisions around your vehicles, and whether you will each keep the vehicles in

your name. It will also address if there any vehicles in both names that need to be transferred to one name.

Debts & Liabilities

This section will address what you will do with your debts and liabilities and whether you will each pay off your own or divide the balances between you.

Excluded Property

If either of you have property that would be excluded such as an inheritance or anything owned before you began cohabitating, it will be listed here.

Conclusion

It can certainly be overwhelming to look at all of these questions at once. But you don't have to have answers to all of them right away. Knowing what a separation agreement is and what it typically includes will help you be less overwhelmed when it comes time to discuss the terms of your agreement and review your final draft.

All content on Divii is meant to serve as educational and informative. This is not a substitution for or considered legal advice. It's always highly recommended to seek independent legal advice from a lawyer during your separation.

Divii can help walk you through

the separation process.

Choose the plan that's right for you and

start the process.

Start the Process