What goes into a Separation Agreement?

What you need to know about making a Separation Agreement. The core components of a Separation Agreement must answer all the questions you need to get settled from your Separation or Divorce. They key issues are your children, any support issues and dividing up assets and debts.

If you are one of the lucky ones, you can negotiate a Separation Agreement with your spouse instead of going through the court system.

The same issues need to be sorted out, but you can do it by a Separation Agreement. It will likely cost you a lot less to get it done than it will cost you to go through the courts.

The court system is heavily over-loaded in Family Court, so they would be very pleased if you could remove yourself from their system and settle things out of court.

Assuming you are one of the lucky ones, this article is to highlight what you need to put into a Separation Agreement.

Here’s a summary:

Background information – you need to say who you both are, the full names of your children and some background on what your incomes are.

Custody/Parenting – this section needs to outline who makes the significant decisions in your children’s lives.

Decisions such as religious upbringing, language upbringing, education, non-emergency medical decisions, who holds passports, whether you change the children’s names (or not), how you each communicate to the children while they are in the care of the other parent, how far you each live from each other and things like significant activities that your children will be enrolled in. This part is not about the schedule of time that each parent provides care; its all about who makes the decisions.

The law is changing on this for people who are married, so it’s slightly different if you are common law, but basically you need to decide the same things.

Parenting Schedule – this section must map out the physical time each parent will be providing care to the children. The law only tells you that it must be in the “best interests of the child”. Vague, but deliberately so as no one child is exactly like any other and no one family is exactly like any other.

People commonly choose three main schedules, such as week on/week off parenting; a 2 days, 2 days, 3 days schedule or Monday to Friday with one parent and every second weekend to the other parent (this one commonly has at least one or two over-nights in the off-week). That being said, you need to create a schedule that works with the schedule of employment for the parents.

If you both work 12 hour shifts with a 5 or 9 day schedule, you can throw the above options out the window. You really need to look at your individual circumstances and create something that works. This is why the law does not have a set recommended schedule. Everyone’s family is unique, which calls for unique answers.

Once you have a basic schedule, you need to move on to holidays.

The holiday section should include your plan for all major holidays and your work vacations. Pay close attention to important holidays to you and make sure the terms are clear for such things as Easter, Thanksgiving, March Break and Christmas. These are examples, but people tend to end up having arguments later if their separation Agreement is not clear on who gets what holiday in what year. You also should be clear on what times too, such as: “New Year’s Eve will be to one parent in all odd-numbered years from noon on New Year’s Eve until noon on New Year’s Day”.

Child Support – there are books written just on this subject alone. The amounts depend upon the incomes of both parents and the parenting time each one has of the children.  Child support guidelines calculators are available on the web. One we like is MySupportCalculator.ca.

The basic points that need to be covered in this part are how much child support is being paid, often called the Table Amount, from one parent to the other and the sharing of special expenses. You need to be very clear in this part on the incomes of both of you and the way parenting time is working.

The next thing to detail here is the sharing of special expenses for the children. These are outlined in section 7 of the Child Support Guidelines and include things like:

• daycare costs,
• medical costs for the kids,
• university/college costs, and
• significant sports costs.

You can put in details right down to who pays for back to school gear. You can outline whatever expenses you both believe need to be shared because you are not in court – it’s your agreement to manage how you wish on those points. Lawyers will point out that the law is all over the place on what kinds of extra costs are covered, but the key big ones (medical/child care/university/college) all need to be spelled out.  As this is your private contract, we recommend you clearly state here what is included as costs you will each share and what is not included  as a cost that you will share.

Spousal Support – this is another subject that entire books have been written about, meaning that we cannot outline all the possible options on this subject in a short blog. This section in your agreement must outline if there is going to be spousal support, how much it is and how long it is payable. If there is to be a review or end date, those details need to be there. If it’s to be a lump sum payment of spousal support, that needs to be in this section too. Alternately, if there’s no spousal at all, you need to make that clear in this part.

Medical and Dental Benefits – this part is just as it says it is. State if anyone has benefits, who that person is and whether they can continue to cover the spouse who does not have benefits and that they can cover the children.

Life Insurance – often not thought about until later, but everyone on this planet will die at some time and you need to think about what would happen to your children if you died while they are still dependent. This section often contains details of the amount of insurance and how long it is to be there.

Property and Family Home – often a very long and detailed section which explains how you are settling the assets and debts between the two of you. Make sure you deal with the family home and mortgage. If someone has a pension you need to address it in this section too. This part must detail all of your assets; the house, cottage, cars, boat, bank accounts, essentially, anything you own right down to sorting out furniture. For more information on this, see our blog on “the Other 50% Myth”.

Debts – this is what it says it is – sorting out who keeps what debts. Pay particular attention to joint debts.

Releases – it’s the wrapping up part of your contract. This details that because you have settled all issues between you, that each person releases any possible claims against the other.

Separation Agreement samples can be searched up on the web, but a word of caution.

Your family is not able to be slotted into a box. Cookie cutters do not work for people. It’s a unique creation and therefore you need a solution that is tailored to fit your family. Be wary of anything that seems too good to be true. It often is.