Separation is a significant life event, and it is understandable to want to resolve matters quickly and inexpensively. Many people are tempted to draft their own “homemade” separation agreements or use templates found online. While these options may seem convenient, they often lead to serious legal and financial problems that can surface months or even years later.
The Risks of Homemade and Online Agreements
Homemade agreements and online templates rarely meet the legal standards required under Ontario’s Family Law Act. Family law is complex, and every separation is unique. Agreements found online are typically generic and may not account for your specific circumstances, such as unique assets, debts, tax implications or parenting arrangements. They often fail to address all necessary topics, including the division of pensions, future changes in income, or the tax implications of spousal support payments. Without legal advice, you may inadvertently agree to terms that are not in your best interest or that do not reflect your legal rights and obligations.
The Supreme Court of Canada’s decision in Anderson v. Anderson highlights the fact that the involvement of counsel is an important safeguard to make sure parties understand the terms and effect of their agreement and to realize the benefit of full and frank disclosure. In that case, the parties endured years of costly and stressful litigation to determine the validity of their agreement, which was prepared by one party and signed without either party receiving legal advice or exchanging financial disclosure.
A critical legal requirement in Ontario is full and honest financial disclosure. Where property is to be divided, both parties must provide complete information about their assets, debts, and income. Failure to disclose significant financial information may result in an unfair agreement. While independent legal advice is not a strict statutory requirement, its absence, along with a lack of full financial disclosure, can raise serious concerns about the fairness and enforceability of the agreement.
Why These Agreements Can Leave You With an Unfair Deal
Homemade and online agreements can leave you with a “bad deal” because they often lack the detail and legal precision needed to protect your interests. Without legal guidance, you may unknowingly give up important rights or accept less than your entitlement. For example, you might agree to an unequal division of property or waive spousal support without understanding the long-term consequences. In some cases, one party may take advantage of the other’s lack of knowledge or bargaining power.
Courts may set aside agreements if there are substantiated concerns about how the agreement was formed, such as undue pressure, circumstances of oppression, exploitation of a power imbalance or other vulnerability, or a defect in the bargaining process that prevented the parties from understanding some essential part of the bargain. However, the legal costs for setting aside an agreement can be very substantial. It is far less expensive to engage a lawyer at an early stage.
The Value of Independent Legal Advice
Independent legal advice is a crucial safeguard in the separation process. A lawyer can help you understand your rights and obligations, ensure that all necessary financial disclosure is made, and negotiate terms that are fair and reasonable. Legal advice also helps ensure that your agreement is drafted in a way that is clear, comprehensive, and enforceable. Independent legal advice and financial disclosure are crucial measures that help ensure a fair bargaining process. The Anderson case demonstrates the importance of having a lawyer involved to ensure agreements are robust, fair, and less vulnerable to future challenges and prolonged litigation.
In summary, while homemade and online separation agreements may seem appealing, they often create more problems than they solve. The risks of an unenforceable or unfair agreement far outweigh the initial savings. Reach out to our experienced family lawyers at SV Law today to help protect your interests and move forward with confidence.
The content of this article is intended to provide a general guide to the subject matter and is not legal advice. Specialist advice should be sought regarding your specific circumstance.