Who needs a lawyer? Let’s settle this between us!

Jack is ready to officially move out of the home as he wants to get on with his life.  Since he expects to have significant parenting time with the children, he rented a home which he now needs to furnish.  For that reason, he had a discussion with Jill this morning and gave her a list of things he wants to take with him including furniture, electronics, tools and other household contents.  He also proposed to Jill a way of dividing equally between them their debts, car payments, home expenses and other monthly liabilities.  Jack was told by his best friend Mark that everything needs to be divided 50-50, so that’s how he suggested that he and Jill divide their debts and expenses.  Jill seemed satisfied with the proposal and Jack started drafting a brief separation agreement confirming the parties’ decisions.  After all, Mark and his ex-wife did it this way, they had no problems and they saved a lot of money. In addition, Jack has a copy of Mark’s separation agreement and so it should be relatively easy to just copy the relevant provisions.

For many good reasons, resolving the issues between you and your ex as quickly and cheaply as possible should be your ultimate goal during the separation process.   However, there are a few caveats you should be aware of when you decide to put a family settlement in writing without the assistance of a qualified family lawyer, or at least some guidance from such a professional. Too often, what appeared to have been a simple issue can turn out to be a very complex and expensive one.   When it comes to resolving family law matters, the agreement or the piece of paper signed by both parties may not be a binding contract recognized by the legal system.   In fact, it can be challenged on various grounds and the judge hearing your case may later decide that your “agreement” is null and void.

The first thing you must understand is that in family law, for a contract to be valid it must at least be dated and signed by the two parties before a witness.  Secondly, it is possible for the person who challenges the validity of the agreement to argue that the contract should not stand because he or she:

• Did not understand the nature of the contract, its content or consequences
• Was forced to sign the contract by some form of duress, pressure or undue influence
• Signed the contract without financial disclosure, or
• Feels that the contract is simply unconscionable (i.e. completely unacceptable in  the eyes of the law)

Finally, to make sure that the contract you signed will be enforced by a court if ever challenged by your ex-spouse in the future, you should always obtain independent legal advice (i.e. ask a family lawyer to review your agreement before you sign it).  Make sure that your ex-spouse ALSO gets legal advice but from a different lawyer (the same lawyer cannot give you both legal advice).  If you don’t, you may very well have to deal with the same issue all over again in the future, and at a much higher cost. When advising you on your separation agreement, your family lawyer will make sure that you fully understand the content of your agreement, that you are not signing the contract out of duress or some other form of pressure, and that the financial disclosure obtained from your former spouse allowed you to make informed decisions.

Who said you can keep the car and the investments too?

The Christmas holidays are over and Jill is very happy that things went much better than she anticipated with Jack and the children over the Holidays.  Since their separation in August, Jill has become more financially astute and received as a Christmas gift from her father a book entitled “The Wealthy Barber Returns” (click here to have a peak at that book) which she read while the children were visiting with Jack.  She truly enjoyed this book which explains in a simple and humorous way important financial concepts she needs to understand in order to move on with her life post-separation.  The new year has just begun and Jill feels it is now time for her and Jack to begin discussing how they will divide their family property (assets and debts).   Jack must have read her mind because he sent her an email this morning listing the items he wanted to keep including the new car, the plasma tv, the bedroom suite, and more of the “good stuff”.   That really upset Jill as she felt Jack was only thinking of himself, once again.  Out of exhaustion, she is thinking that it might be better to just let him have his way to finish this off quickly.

When anger is high and feelings are hurt, disputes over the division of household contents often turn into endless emotional battles during the separation process which fuel the litigation and can significantly increase costs to both parties’ detriment.  Remember that what you “feel” is yours may not necessarily be so in the eyes of the law.  Similarly, assuming that you are entitled to «half of everything » just because you were married is not necessarily true either.  To reach a quick settlement and to reduce the stress, some people are tempted to rush through the process of dividing their family property. Others mistakenly believe that dividing everything in half (splitting every asset and every debt in half) is the simplest and fairest way of dividing family property.  Thinking that the settlement was fair they then chose to sign a “kitchen table” agreement (i.e. one drafted by themselves without legal advice) to put the issue behind them.

In reality, dividing your assets and debts, while it does not have to be a complicated, requires a much deeper analysis in most circumstances and should never be accomplished without a deep understanding of the long-term consequences of any given property settlement.  Doing so could result in a settlement that is completely unfair to you and / or which may have very serious financial consequences in the future which you were not aware of.  A separation agreement should never, (and I repeat) never be signed unless you have spent at least one hour with a family lawyer who can explain to you what you are fully entitled to by the law, what you may be leaving on the table and what the long-term financial implications of your decisions will be. Experience has shown that settlements which seemed simple and fair at first glance do not necessarily stand the test of time and you would not want to be eating cat food just because of hasty decisions you made to settle your separation quickly.