Separation Agreement Without Income Disclosure?

Can You Create a Separation Agreement Without Disclosing Your Income?

When couples separate in Ontario, one of the most important steps in resolving family law matters is drafting a separation agreement. This legally binding document outlines how property will be divided, who will pay support, and how parenting arrangements will be handled. But one common question that arises is: Can you create a separation agreement without disclosing your income?

Is Income Disclosure Legally Required in Ontario?

Technically, income disclosure is not mandatory to draft a separation agreement. There are no specific statutory requirements forcing parties to exchange financial documents before signing the agreement. However, that doesn’t mean it’s a good idea to omit this step.

In practice, Ontario family courts expect full and honest financial disclosure, especially when the agreement involves spousal support or child support. Without proper income disclosure, the agreement may not hold up in court.

Why Full Financial Disclosure Matters

Although income disclosure isn’t explicitly required to put pen to paper, the Family Law Act of Ontario and decisions by the courts strongly support full transparency between spouses. Here’s why:

1. Enforceability of the Agreement

If a separation agreement is ever challenged in court, a judge will examine whether both parties had access to the same financial information. If one spouse failed to disclose relevant income or assets, the agreement may be declared unfair, invalid, or unenforceable.

2. Spousal and Child Support Calculations

Income is a key factor when determining support obligations. The Federal Child Support Guidelines and Spousal Support Advisory Guidelines rely on accurate financial figures. Hiding or underreporting income could result in retroactive support payments, penalties, or the agreement being overturned.

3. Good Faith Negotiations

A separation agreement is meant to reflect a fair and informed compromise between two parties. Withholding income information undermines this process and could be seen as acting in bad faith—a red flag in any family law dispute.

Risks of Creating a Separation Agreement without Disclosing Your Income

Here are some of the major risks of not disclosing income:

1. The Agreement May Be Set Aside by a Court

If your separation agreement is ever taken to court—whether months or years after signing—a judge may invalidate the agreement due to lack of full and frank financial disclosure. Under Ontario family law, courts will assess whether both parties entered into the agreement voluntarily, fairly, and with a full understanding of the relevant financial circumstances. If one party concealed income or failed to disclose important details, the court has the authority to set aside the agreement.

2. Potential for Future Legal Disputes and Costly Court Battles

Failing to provide income information may not cause immediate problems, but it leaves the door open for future disputes. If the other party feels they were misled or disadvantaged by the lack of disclosure, they may pursue legal action to reopen or renegotiate terms. This can result in expensive legal fees, emotional stress, and time-consuming litigation—outcomes that most separating couples aim to avoid.

3. Claims of Duress, Misrepresentation, or Unfairness

When one party withholds income or asset details, the other may later claim they signed the agreement under duress or were misled by misrepresentation. Even if these claims are not ultimately successful, they can lead to legal delays and put the entire agreement at risk. Ontario courts are especially sensitive to situations where one party appears to have taken advantage of a power imbalance during separation negotiations.

4. Enforceability of Spousal and Child Support Provisions May Be Affected

Support payments—both spousal support and child support—are calculated largely based on income. If the agreement includes terms related to support and was based on inaccurate or incomplete financial data, the court may refuse to enforce those terms. Worse, it could result in retroactive support orders or the court imputing a higher income to the non-disclosing party. In short, your efforts to avoid disclosure might backfire with larger financial obligations down the road.

Why Financial Disclosure is Critical for Spousal and Child Support

When drafting a separation agreement in Ontario, financial disclosure plays a pivotal role—especially when it comes to spousal support and child support. These two areas are closely tied to each party’s income, and failing to provide accurate financial information can lead to unfair or unenforceable support arrangements.

Here’s why full income disclosure is essential:

1. Spousal Support is Based on Income and Needs

Spousal support is not automatic in Ontario—it depends on several factors, including the length of the relationship, the roles each person played during the relationship, and, crucially, each party’s income and financial need.

The Spousal Support Advisory Guidelines (SSAGs), while not legally binding, are often used by lawyers and judges to help calculate fair support amounts. These guidelines rely on accurate income figures to determine whether support is owed and how much should be paid. Without full income disclosure, any support agreement risks being inaccurate, inequitable, or subject to legal challenge.

2. Child Support Follows Federal Guidelines

In Ontario, child support is calculated according to the Federal Child Support Guidelines, which are mandatory and income-based. The paying parent’s gross annual income determines the base amount of child support owed, and additional expenses (such as daycare or extracurricular activities) may also be shared proportionally based on income.

If income is not disclosed accurately, child support calculations will be flawed—and this could negatively impact the well-being of the children involved. Moreover, courts take child support obligations very seriously and may order retroactive payments or adjust the agreement if financial deception is discovered.

3. Support Arrangements Must Be Fair and Legal

When a separation agreement includes terms about spousal or child support, Ontario courts will only uphold those terms if they are based on full, honest, and accurate financial disclosure. An agreement that underestimates a party’s income or is based on misleading information can be ruled unfair or invalid, and courts have the authority to amend or replace those terms.

In short, if the goal is to create a fair and enforceable separation agreement, income transparency is not optional—it’s essential.

What Needs to Be Disclosed?

When creating a separation agreement in Ontario, both parties are expected to provide full and honest financial disclosure. This transparency forms the foundation for fair decision-making around property division, child support, and spousal support. Courts take financial disclosure seriously—if key information is left out, your agreement may not be upheld.

Here’s what should typically be disclosed:

1. Employment Income, Bonuses, and Commissions

Your regular salary or hourly wage is just the starting point. You also need to disclose any additional income, including:

• Annual bonuses
• Overtime pay
• Performance incentives
• Tips and commissions

Even if irregular or performance-based, this income must be included to present a complete financial picture.

2. Business Income, Rental Income, and Investments

If you’re self-employed, operate a business, or own rental property, you must disclose all business-related income and net rental profits. You should also report:

• Dividend income
• Interest from savings or bonds
• Capital gains or losses from investments

These sources may not be as obvious as a paycheque but are equally important in determining fair support and asset division.

3. Pensions, Benefits, Debts, and Liabilities

Your financial obligations matter as much as your income. This includes:

• Pensions and retirement benefits
• Long-term disability or employment insurance benefits
• Outstanding loans, credit card debt, and mortgages
• Lines of credit or personal guarantees

By disclosing debts and liabilities, you ensure the agreement properly accounts for net family property.

4. Assets: Property, Savings, Vehicles, and More

A complete asset inventory should be included, covering:

• Real estate (primary residence, vacation homes, rental properties)
• Bank accounts and savings
• RRSPs, TFSAs, and other investment accounts
• Vehicles, boats, recreational equipment
• Personal property of significant value (jewellery, collectibles, etc.)

How to Properly Disclose Income When Drafting a Separation Agreement

Here’s how to do it correctly:

1. Use Form 13 or 13.1 Financial Statements

If your separation agreement is later filed with the court—or if there are unresolved issues that lead to litigation—you’ll likely need to complete Form 13 or Form 13.1. These are standard Family Law Financial Statements in Ontario.

• Form 13 is used when your case involves only support claims (child or spousal support).
• Form 13.1 is used when your case includes both support and property division.

Even if you’re not going to court, using these forms as a guide during negotiations helps ensure that no important financial details are overlooked.

2. Provide Supporting Documents

To verify your income and financial position, you should gather and exchange key documents, including:

• Recent tax returns (usually the last 3 years)
• Notice of Assessment from the Canada Revenue Agency (CRA)
• Pay stubs from your current employer
• Bank statements (personal and joint accounts)
• Statements for investments, RRSPs, TFSAs
• Business financial statements, if self-employed
• Pension statements and other long-term benefits

These documents not only support your financial disclosures but also help create a clear and reliable financial snapshot for both parties.

3. Exchange Documents with Your Spouse

Financial disclosure is not a one-way street. Both parties must exchange full and honest information to ensure that the agreement is built on mutual understanding and fairness. This process builds trust and makes it harder for either side to challenge the agreement later.

Consider creating a checklist and signing a certificate of disclosure confirming that both parties have exchanged complete and accurate information.

Can a Lawyer Draft a Separation Agreement Without Full Disclosure?

In Ontario, it is legally possible for a lawyer to draft a separation agreement even if one or both parties have not fully disclosed their financial details. However, most experienced family lawyers will strongly advise against finalising the agreement without complete disclosure—and for good reason.

A Lawyer Can Draft the Agreement—But Will Caution You

A lawyer’s job is to ensure the agreement reflects the intentions of the parties and complies with Ontario’s Family Law Act. While they can technically draft an agreement based on the information provided, most will recommend against proceeding until both sides have exchanged full and honest financial disclosure.

Without disclosure, the agreement may lack fairness and be at risk of being set aside in court, especially if it involves spousal support or child support.

Professional Liability and Ethical Concerns

If a separation agreement is later challenged due to inadequate or missing disclosure, the lawyer involved in drafting it may face professional scrutiny. Lawyers have an ethical duty to advise their clients on the risks of entering into an agreement without transparency. Failing to do so could expose them to:

• Professional liability claims
• Complaints to the Law Society of Ontario
• Reputational damage

To protect themselves and their clients, many lawyers require both parties to complete financial disclosure forms and sign certificates of independent legal advice (ILA) before finalising the agreement.

Can You Waive Financial Disclosure in a Separation Agreement?

In Ontario, financial disclosure is a cornerstone of any fair and enforceable separation agreement. But what if both parties agree to skip it—can financial disclosure be waived?

Technically Possible, But Not Recommended

Yes, it is technically possible to waive financial disclosure in a separation agreement. There are no laws that absolutely prevent two parties from agreeing to proceed without exchanging detailed income or asset information. However, doing so is strongly discouraged.

Waiving disclosure introduces significant legal risks. Ontario courts have consistently held that full and honest disclosure is a key factor in determining the fairness and enforceability of a separation agreement. Skipping it may compromise the entire agreement, especially if one party later feels disadvantaged or misled.

Waivers Must Be Informed, Voluntary, and Well-Documented

If a waiver of financial disclosure is included in your separation agreement, it must be:

• Informed – Both parties must fully understand what they’re giving up and the potential consequences.
• Voluntary – There must be no pressure, threats, or coercion involved.
• Properly Documented – The waiver should be clearly written into the agreement, ideally with both parties confirming in writing that they are proceeding without financial statements.

Most family lawyers in Ontario will advise their clients in writing about the dangers of waiving disclosure and may even refuse to participate unless the clients acknowledge the risks.

Courts Can Still Set Aside Agreements Despite a Waiver

Even if both parties agree to waive disclosure and the agreement includes a signed clause confirming this, Ontario courts can still set the agreement aside if it results in a significantly unfair outcome.

Under the Family Law Act, a judge has the authority to invalidate an agreement if:

• One party did not understand their rights or obligations,
• The agreement is unconscionable, or
• There was insufficient financial disclosure, leading to an imbalance in negotiation power.

In other words, a waiver of disclosure does not guarantee protection if the agreement is later challenged on the grounds of unfairness or inequality.