By Douglas J. Manning, Partner, Certified Specialist in Family Law

Yes!  But why would you want to?

In a recent British Columbia court decision, one of the issues was whether the husband and the wife had entered into an oral marriage contract that excluded the sharing of the wife’s rental property from being shared in the parties division of property when they separated.

Both parties had come from previous marriage-like relationships. The wife owned 2 properties coming into this marriage.  The value of one of the properties increased by about $500,000 during the 3 year marriage.  The parties never occupied the property during the marriage and they never shared the rental income. The husband never paid any of the expenses associated with the property.

The wife’s evidence was that the parties had a verbal contract that the husband would not have any interest in the property, nor would the value of the property or any increase in the value be included in what the wife would have to account for in the sharing of the parties’ net worth.

The husband maintained that they had talked about putting his name on title to the property and therefore he would have been a joint owner and thus the intention was to share the asset and the increase in the value over the marriage should be included in the mix of the property to be shared.

The wife gave evidence that each party agreed to be responsible for their own expenses and pay their own debts and not look to the other for assistance.  The evidence showed that they more or less were responsible for their own individual expenses, never had a joint bank account and each was financially responsible for their own children from their prior relationships. However, the parties did share their living expenses together, including the costs of vacations, etc..

The issue was largely one of credibility. Who did the judge believe?  On balance the court preferred the wife’s evidence as it was more consistent with how the parties conducted themselves.  They had very little integration of their financial matters and this supported the wife’s contention that there was no mutual intention to share the value of her pre-marriage rental property or the increase in its value.

Of course all of this could have been avoided had the parties decided to have a written marriage contract that clearly set out their expectations, rights and obligations.  If you are going into a new relationship and have considerable assets or there is a significant difference in your incomes, it would be wise to consider the use of a cohabitation agreement or marriage contract.

Jodi Armstrong, Partner, Family Law

There are certainly some similarities between a mediation report and a separation agreement: both documents outline agreed upon terms and both, at least appear, to have an air of finality about them.  Why then, once parties have gone through the mediation process and have received a final report setting out their agreement, are they still being strongly advised to take the next step and enter into a separation agreement? 

The answer is simple: the mediation report is not a legally binding contract.

Many, but not all, mediators are also lawyers.  When a lawyer is acting as a family mediator, however, he or she does not provide legal advice to either party.  The lawyer/mediator can provide useful legal information but, while mediating a family dispute, he or she is acting as a neutral third party and is attempting to assist  separated spouses with reaching a meeting of the minds in relation to their various family law issues.  Once the parties have come to an agreement, the mediator will prepare a mediation report outlining the particulars of that agreement and will direct the parties to take the report to their respective lawyers for independent legal advice.

Once the mediation report is in the hands of the lawyers, the parties will have the opportunity to discuss the terms and to get advice with respect to whether the mediated agreement is consistent with their rights and obligations under the current law.  Assuming that, with that legal advice, the parties are still in agreement, the lawyer will draft a separation agreement with appropriate releases.   The separation agreement must be (1) in writing; (2) signed by the parties; and (3) witnessed – at which point, it is a legally binding contract.

David Harris-Lowe, Partner, Family Law

Going through a separation or divorce is often a really challenging experience. It can be legally complex, emotionally challenging, and financially draining. You’re under pressure and it’s tempting to cut corners by handling the separation and divorce without the assistance of a lawyer. Too often this leads to bad Agreements which aren’t enforceable.

A good family law lawyer can help in several ways. Obviously, lawyers should know the law and be able to apply the law to your particular situation. This means knowing more than just basic family law. Your lawyer also needs to be informed about tax law, insurance law and trust law to name a few. But it’s more than that. Your lawyer can also help you in the following ways:

  • Identify what your interests are and will work with you to develop a realistic plan to achieve them.
  • Act as a trusted advisor. This means letting you know what your rights are and assisting you in seeing beyond the immediate problems of a divorce or separation.
  • Are about you and your situation, but not to the point that it interferes with good judgement and advice.
  • Be able to follow through with negotiations, mediation, arbitration or litigation as needed. This means knowing how to negotiate and, if needed, how to gather up and present evidence in a compelling way.
  • Handle the mechanics of writing an enforceable and lasting agreement.

If you or someone you know is going through a separation or divorce, it’s usually a smart idea to speak with a lawyer early in the process.

Barrie Hayes, Partner, Family Law

Statistics Canada has recently released an analytical paper addressing parenting and child support after separation or divorce. Highlights of the paper are as follows:

In 2011, approximately 5,000,000 Canadians had separated or divorced within the last 20 years. Of these, about one quarter currently had at least one child aged 18 years or younger, together.

Most often, the mother’s home was the child’s primary residence after separation or divorce, reported by 70% of separated or divorced parents. Another 15% indicated that the child mainly lived with the father while 9% reported equal living time between the two parents’ homes.

The majority of parents whose child lived primarily with their ex-partner spent either no time or less than three months in the last year with their child: 18% had no contact with their child and 44% spent some time, but less than three months.

Just over one third of parents indicated that majority decisions on the health, religion and education of their child were made either jointly or alternatively with their ex-partner.

Parents often had written arrangements on child residency and time-sharing, at 55% and 45% respectively. In 2011, parents were equally as likely to work with lawyers to draft a written agreement, as they were to go to court for a judge ordered arrangement.

Over half of parents reported they complied with the arrangements on time-sharing, while another one quarter, followed the arrangements for time-sharing most of the time. The top reason cited for noncompliance with time-sharing arrangements was the ex-partner canceling his or her own time with the child.

About three quarters of separated or divorced parents were satisfied with the time spent with their child.

In 2011, 21% of separated or divorced parents were paying some form of financial support for their children, while 26% were receiving child support.

Over half (55%) of all written arrangements for child support where registered with a support enforcement program. Registration in the support enforcement program increased with the level of legal involvement with 76% of judge ordered arrangements being registered with the program.

Separated but not yet divorced legal spouses should beware of the potential legal effect of a pre existing will which leaves the spouse’s estate to his now estranged wife.

In the recent case of Macarchuk v. Macarchuk the spouses were separated but not divorced. Prior to separation, the husband had made a will naming his wife as his executor and sole beneficiary of his estate.

The couple settled the separation issues by entering into a separation agreement which contained a provision whereby the spouses both released any rights they may acquire under the laws of any jurisdiction to the estate of the other.

After executing the separation agreement, the husband died prior to the parties’ divorce.

Litigation ensued over the issue of whether the surviving wife was entitled to receive the estate pursuant to the Will and to act as the deceased husband’s estate trustee.

The trial Judge determined that the provision in the separation agreement that released rights acquired under law to the spouse’s estates did not apply to those rights acquired under the husband’s Will and found that the wife was entitled to the benefits provided to her under the Will.

The trial decision is significant in that the wife not only received her entitlement to equalization of property pursuant to the separation agreement, but also received the net residue of the estate, as provided by the deceased husband’s Will.

What could have been done to prevent this unfortunately legal result?

The pre existing Will could have been cancelled, either by the making of a new Will, a written Declaration of Intent to Revoke the Will or the destruction of the Will.

A remarriage would also have rendered the pre existing Will null and void.

Careful drafting of the release against spouses’ estates in the separation agreement is also recommended.

Thanks to the Internet, we have access to so much information about just about everything. The benefits of information and how quickly we can get it are obvious. So the internet is one tremendous tool and it is truly causing a revolution in education for our entire society. The revolution is affecting every institution from the governments of repressive states like Libya to the family court system in Ontario.

Information empowers us to believe that we can do anything ourselves.  For example, a few years back, I wanted to do some major renovations to my cottage. I am by no means a builder but, thanks to some very good information from the internet, I was able to find some planning software that allowed me to draft building plans for the remodeling. I also have all kinds of books on plumbing and wiring and carpentry. I felt that I might need a few more tools, but I was sure that I could do what I had in mind either on my own or with a bit of help from some very skillful relatives.  Overnight, in my mind, I became an expert. Not being a developer or builder, I took my plans to the building department at the local municipality expecting instant approval. But then, the real education began. The friendly municipal folks referred me to a person who had real skill at drafting building plans. From his experience, he was able to advise us about the building codes, the need for proper building permits and how to get them, which led in turn to trying to understand the building and zoning requirements necessary for that approval. We also found out that our planner’s plans did indeed have to be stamped by an architect.  I also began to understand that my perspective on my level of skill to actually do the building was very much misguided. After several months, I was getting very frustrated and wondered why I just did not ignore all the building codes and municipal by-laws and just build the cottage the way I wanted, damn the consequences. Fortunately for me, I hired a proper expert, including an architect and a builder, and, finally able to get final approval and build a lovely cottage. Had I built it on my own, of course, it would not have been nearly so attractive to start with and had I ignored the building code and zoning requirements, the municipality could have legally ordered me to take it all down and start all over.

Taking a case to court, unfortunately, is at least just as difficult as building a cottage. Although you don’t need a licence to act for yourself, and you don’t for some crazy reason need any government or other approval to go ahead and act for yourself, it might be wise to consider retaining someone who does have a licence. I realize I am speaking from a biased perspective – I am a family law lawyer. If you hire me you have to pay me and that expense can be very high if the issues facing you are significant and difficult.

Lawyers know that many people cannot afford the cost of proceeding into family court with a lawyer at their side all the way through, especially if the problems facing you are hard fought by the other side.  So what can you do? You are likely going to hurt yourself if you represent yourself and yet you can’t afford the high cost of the lawyer.

There are solutions, even for this difficult problem. Here are some of them:

  1. Consider going to a qualified family mediator – one who has accreditation from the Ontario Association for Family Mediation, or the ADR Institute for Ontario or Family Mediation Canada. See for example this site where you can find someone in your area who provides this service.
  2. Learn more about mediation before you enter that process – see the government web site.
  3. Get a consultation from a lawyer to understand how the law impacts your personal situation. Ask for an assessment of your case. A lawyer can usually quote you a ‘flat fee’ to provide such an assessment. The assessment should also provide you with a strategy for further action.
  4. Ask the lawyer to help you ‘do it yourself’. Lawyers can be retained to act for you on the basis of what we call ‘unbundled legal services’  which means that they do not have to act for you throughout the entire court process but they can help you draft your court documents, and help you along the way on an ‘as needed’ basis.
  5. Consider entering into the collaborative law process – stay out of court and use lawyers and other professionals to create a proper agreement which attempts to serve both parties interests. Learn more information on this process via this helpful website.

The main thing is to remember that no matter how much we can learn from the Internet, we can’t learn what experience teaches. If I built 50 cottages, I could certainly build another but my first and only cottage should be built by proper qualified folks who know what they are doing and who know how to help. Whether I do it myself or whether I do it with help, there is still going to be a cost – whether that cost will be effective in getting the job done depends on who does it.

The pending nuptials of Prince William and Kate Middleton have attracted an inordinate amount of public attention.  We all seem to be captivated by royalty (whether it be political, sports, entertainment, or the real thing!).

There are some ‘gossipy’ rumors circulating that Prince William and Kate have agreed to enter into a marriage contract that presumably would establish what payments or property transfers would be made if the couple ever separated or divorced.  I am no expert on “royalty law” but I am given to understand that there may be some question about the legality or enforceability of a marriage contract entered into by a member of a royal family.  Fortunately for you (and me) this is not the type of question that I am asked every day in my family law practice.  There aren’t very many royals in my ’neck of the woods’.

That said, there is an increasing use of cohabitation agreements and marriage contracts between persons contemplating a long term relationship or marriage.  More frequently, people are waiting longer to get married and they are coming into the new relationship or marriage with a more significant asset base and thus they want to protect what they have in the event of a separation.  Also, people entering into (what they hope will be) long term relationships or marriages have witnessed their own parents separations and want to avoid the hardship and fighting that they observed in their own parents’ separation.

When I discuss the wisdom of a marriage contract or cohabitation agreement with a client, I describe it much like an “insurance policy” – it is something you should have; but hope to never use .  It is only relevant in the event of a separation and it is designed to govern what is to happen with respect to the division of property (or a payment in respect of property) and spousal support (alimony in some jurisdictions).

A Cohabitation Agreement (in the case of common-law spouses) or a Marriage Contract (in the case of married spouses) assist separating spouses in determining such things as:

  • The ownership of various properties upon separation (not just land, but also such items as bank accounts, investments, jewelry, vehicles, time-share vacation properties.  The exception to this is that rights with respect to occupation of the “matrimonial home” cannot be bargained away in a Marriage Contract.
  • Which spouse will be responsible for the various debts that exist at the time of separation
  • How jointly owned property will be handled – if one or both spouses wish to buy the other spouse’s interest in a jointly owned house, cottage, etc.
  • If spousal support will be paid (or not) and if so, for how long and in what amount
  • The rights to determine the educational and religious training of the children

One of the issues that cannot be addressed in a Cohabitation Agreement or Marriage Contract is the custody of children of the relationship in the event of a separation.  Custody of children is always based on the “best interests of the children”. It is difficult to predict a child’s best interests at some time in the future (separation) at the time of negotiation of the Cohabitation Agreement or Marriage Contract.

In Ontario the statutory requirements for a valid Marriage Contract or Cohabitation Agreement are set out in the Family Law Act and are:

  • There must be full (meaningful) disclosure between the parties regarding their financial circumstances at the time of entering into the agreement;
  • Each party must have the opportunity to receive independent legal advice about the agreement
  • The agreement/contract must be in writing and the parties’ signatures must be witnessed

I am confident that Prince William and Kate Middleton will have no shortage of high quality advice (legal and otherwise).  For those of us non-royals, I  would consider investing some time and money on carefully considering what you would like to see in place in the event of a separation.

On a regular basis I have clients come to me with a rough agreement in hand asking me to draft a Separation Agreement for them. These are the client’s who tell me they are “amicably” separating; they “just want out”, and/or they don’t want to spend a lot of money on legal fees.  Quite often they have:

  1. done some research on the internet,
  2. sat down with their spouse, and
  3. they  have worked out between themselves issues like where the children will live, how their family property and debts are to be split, and how much spousal and child support will be paid.

They come to me saying that they have “worked it all out” and they just want me to draft the Separation Agreement for them based on what they present to me and usually they want me to do it as quickly and inexpensively as possible.

When parties come to me in this fashion, they sometime baulk when I tell them I need more information and, when I ask them for back up documentation to support their “agreement”, they are often reluctant to gather the documentation.   I ask questions and look to documentation because I have minimum professional standards that I must meet as a lawyer which require me to ensure that I can properly advise my client regarding their entitlements and risks. To meet professional standards (even if the parties are amicable) a lawyer I must:

  1. Obtain sufficient reliable information to be able to ascertain what the client would likely receive or be required to pay for spousal support, child support and matrimonial property division should the matter be resolved at trial and so advise my client;
  2. Give the client a description of options to any proposed settlement, an opinion on whether any proposed settlement is reasonable, and a discussion of the pros and cons of that settlement in comparison to the other options so that any decision to settle is an informed decision; and
  3. Tell a client who takes the position that he or she wants to settle without having received full information from the other side that they may be accepting less or paying more than what would be required according to law. To provide to that client an assessment of the impact of the risk including estimates of the value of what might be lost or paid above what was necessary to the extent possible on the basis of the information then available.

You are entitled to give up legal entitlements in order to achieve a settlement, but that will never excuse your counsel from the requirement that he or she ask the questions and get the information needed to properly advise you and to help you make informed choices.  So if you are going to a lawyer with agreement in hand, be prepared for questions and bring along your paperwork.