Family & Separation Agreements
A domestic contract is an agreement between two people who are in, or intend on entering into, a relationship of interdependence. Usually, such agreements are in writing, and both people obtain legal advice. These may include contracts ranging from Prenuptial Agreements to Separation Agreements.
Domestic contracts are subject to the same rules are other contracts. For example, people entering into a domestic contract must:
- Be of sound mind.
- Understand the terms of the agreement.
- Enter into the contract voluntarily.
On top of this, domestic contracts that deal with family property must meet extra criteria. For example, a domestic contract dealing with family or matrimonial property will not be enforceable unless both of the parties have had independent legal advice and the contract follows the format prescribed in the Family Property Act.
Although the courts often defer to the parties’ private agreements, the court retains ultimate jurisdiction over parenting and child support.
There are a few main kinds of domestic contracts.
1. Prenuptial Agreements (Prenups)
Given the high divorce rate, it is common—and often a good idea—to consider a Prenuptial Agreement before getting married. A Prenuptial Agreement is a contract signed by both prospective spouses before marriage, and it determines what rights each spouse has should the marriage break down. For example, it will typically determine “who gets what”. A Prenup can help you protect your property, your income, and save you time and money if the marriage breaks down.
Prenuptial Agreements typically deal with the following issues:
1 – Parenting – Often when spouses have children from prior relationships, they will want to “fix” their parenting rights and responsibilities for those children, should their new marriage break down. This can be a way of providing stability for the children of the parent’s previous relationship. Occasionally, would-be spouses will also try to negotiate parenting arrangements for the children which they have together.It is important to remember that no matter what a prenuptial agreement may say about parenting, the court has the final say, and will consider only the children’s best interests in making its decision. Therefore, parenting clauses in a prenup may not always be enforceable. Generally, parenting clauses respecting children from prior relationships are more likely to be enforced than those dealing with the shared children. Agreements reflecting future children are not enforceable.
2 – Child Support – Spouses may include clauses which attempt to “fix” the amount of child support that the parents would have to pay after separation. Such child support clauses may be enforceable provided that they adequately provide for the children of the marriage.
3 – Spousal Support – Spousal support is usually included in Prenuptial Agreements. Spouses can either waive their rights to spousal support, or agree to the amount/duration of spousal support in advance. This provides them with certainty should the marriage end. Courts have typically upheld spousal support agreements.
4 – Family Property – Couples typically decide how they will divide the family property in a Prenuptial Agreement. Often, couples will follow the broad-strokes of the Family Law Act, however, they will add additional protections in place respecting their property. For example, a spouse may want to protect the increase in value of their stocks, or they may want to preserve their interest in their corporation. Courts have typically upheld family property agreements, provided they follow the legislation’s guidelines.
Although no Prenuptial Agreement is “bulletproof”, spouses can make their agreements stronger by obtaining independent legal advice from a lawyer, and exchanging comprehensive financial information, before signing the Prenup.
Cohabitation Agreements (Common Law Partner Agreements)
Cohabitation Agreements deal with the same issues as do Prenups, however, in this case the parties are Adult Interdependent Partners, also known as “common law” spouses. These types of agreements are increasingly common because young people are foregoing or delaying marriage—many people want to “test drive” the living situation before committing for the long haul.
Living together without an agreement in place can be dangerous. Most people do not know that “common law” spouses are now entitled to a share of the family property—just like married couples—provided they meet the criteria under the Family Law Act.
If you are living together in relationship of economic interdependence, you would do well to contact a family lawyer who will be able to explain your legal rights and responsibilities. If nothing else, a Cohabitation Agreement will give the cohabitants peace of mind should they separate. Oftentimes, Cohabitation Agreements end up forming the basis for a Prenuptial Agreement.
2. Postnuptial Agreements (Marriage Contracts)
The difference between a Postnuptial Agreement and Prenuptial Agreement is when it is signed. A Postnuptial Agreement is entered into after the spouses are married. This type of contract deals with the same issues as a Prenup, and is typically signed when the spouses are going through a “rough patch” in the relationship, or their financial circumstances have changed dramatically. For example, spouses may enter into a Postnuptial Agreement to offer extra protection to the value of an inheritance or a business venture.
3. Separation Agreements (Minutes of Settlement)
Also known as a Minutes of Settlement or Settlement Agreement, a Separation Agreement is a legal agreement between separated or divorcing spouses. It resolves the legal matters between them, and affixes their rights. Basically, it determines “who gets what”.
Both common law separating and divorcing spouses may enter into Separation Agreements.
A Separation Agreement deals with the same issues as a Prenuptial Agreement, including:
1 – Parenting – If the separating spouses have children, then the Separation Agreement should include provisions reflecting the parenting plan agreed to between the spouses. Spouses will need to agree on decision-making rights, and when they will each exercise parenting time with the children. The parenting terms of a Separation Agreement are often enforceable in court—unlike the parenting terms in a Prenuptial Agreement.
2 – Child Support – If there are children, then the Separation Agreement should also speak to the amount of child support payable. Typically, this will be the amount listed in the Child Support Guidelines.
3 – Spousal Support – Separation Agreements will either note the quantum (amount) and duration (time payable) of spousal support, or they will contain clauses waiving spousal support. The spousal support terms of a Minutes of Settlement are usually binding on the spouses.
4 – Family Property – Under the Family Property Act, spouses may enter into a Minutes of Settlement respecting the division of family property. Spouses may agree to divide their property equally or unequally, but in either case, they must obtain independent legal advice from a lawyer. If the agreement is unfair, it is unlikely that a lawyer will sign off on it.
Generally speaking, Separation Agreements are more likely to be enforced than are Prenuptial Agreements. This is because both of the spouses will have a better understanding of their legal rights and obligations at the end of their relationship than they did at the beginning.
How Do I Get a Separation Agreement?
Although many websites are happy to sell you template separation agreements, these are usually worthless.
This is because the law is complicated, and its application depends on the facts of your specific case. That is, what applies to one family may not apply to your family. As such, we recommend that a lawyer draft the separation agreement.
These are the general steps in preparing a separation agreement:
1 – Exchange financial disclosure. Both you and your spouse must provide one another—and the lawyers—your financial documents.
2 – The lawyer will review the disclosure, and prepare you a legal opinion.
3 – The spouses, or their lawyers, will negotiate a fair and reasonable settlement.
4 – The lawyers will draft the Minutes of Settlement, or Separation Agreement, for the spouses to review.
5 – If there are no changes to make, the parties will execute (sign) the Agreement in the quadruplicate (they will make four original copies).
6 – The spouses must follow-through on their obligations under the Agreement.
Do I Need a Lawyer for a Separation Agreement in Alberta?
We recommend that you speak with a lawyer before signing a Separation Agreement in Alberta.
This is because in Alberta, a contract dealing with the division of family property is not enforceable unless both spouses have had independent legal advice from a lawyer. A lawyer must sign a certificate indicating that they have done this. As such, it is very important to talk to a lawyer before signing an Agreement—whether it be a Prenup, Postnup, or Separation Agreement.
A family lawyer will be able to explain your rights and responsibilities under the agreement, as well as the legal risks involved. A lawyer will also be able to provide you with an objective legal opinion, which can make all the difference during an emotionally-charged breakup.
Ask a Lawyer about Separation Agreements
We hope you found this legal information helpful. Feel free to call us at Morrison LLP at 587-758-1099 if you have any questions about your prenuptial or separation agreement—the first 30 minutes are free.
Although we are based in Edmonton, our family & divorce lawyers—and practicing mediators—are proud to serve much of northern Alberta, including the following communities:
- Edmonton & Area – Sherwood Park, Beaumont, Leduc, Fort Saskatchewan, St. Albert, Spruce Grove, Stony Plain.
- North – Athabasca, Morinville, Westlock, Gibbons, Barrhead, Redwater, Peace River, High Level, Fort McMurray.
- West – Drayton Valley, Edson, Hinton, Whitecourt, Devon.
- South – Camrose, Wetaskiwin, Millet, Calmar.
- East – Vegreville, St. Paul, Cold Lake, Bonnyville, Vermillion, Wainwright, Tofield.