COLUMN: A cautionary tale about separation agreements

One question people often ask me is whether they should go to the trouble and expense of concluding a separation agreement ...

  • Apr. 9, 2016 5:00 a.m.

Legal-Ease by Karen McNeilly

One question people often ask me is, “Should I really go to the trouble and expense of concluding a separation agreement, if my ex-spouse and I are fine with the informal arrangements we have?”

A separation agreement is a written agreement between separating spouses which settles in a final way the division of assets and debts, and if there are children, can include arrangements for them, and their support.

The benefit of a separation agreement is that you and your ex-spouse can move forward with your separate lives knowing that assets and debts have been divided appropriately, the property you have will remain yours, and your former spouse won’t come to you in the future for a share of that property.

Consider the true story of David and Sharon.

David and Sharon were married in 1965, and bought a house in Vancouver together in 1968 for $37,000.  It was registered to both of them as tenants in common. They lived together there until 1971, when they separated and David moved out.

A few years later, Sharon met Ezra, who moved in, and they had a son, Philip.

Sharon and David never divorced, and title to the home remained in both their names.  David contributed to the mortgage payments until separation, but paid nothing after that time. The mortgage was paid off by Sharon in 1974.

The parties had a few discussions about the property, but a separation agreement was never signed. It appears that Sharon was concerned that David would want payment for his half of the house, and David was concerned that Sharon would want spousal support.

Sharon continued to live in the house until her death in 2009. Upon her death, her half of the house passed to her son Philip.  As owner of the other half of the home, David commenced a court action to have the house sold, so that he could receive payment for his half.

The court agreed, and ordered the home sold and the sale proceeds, estimated to be $1.2 million at the time of trial in 2014, be split equally between Philip and David.

Sharon could have saved Philip the time and expense of a trial, and having to split the house with David, if she had finalized a separation agreement with David back in the 1970s.

Even if you think you and your former spouse have a good relationship and have things worked out between yourselves, have those arrangements written into a separation agreement.

We don’t know what the future holds, and while it may seem easier at the time to avoid the hard discussions and work out a settlement of all of the issues, there can be far more problems and expenses later if it is not done properly at the time of separation.

Karen is an associate lawyer with RDM Lawyers LLP Abbotsford. She practises in the area of family law.  Comments or questions about this article can be sent to legalease@abbynews.com.