Commonly Overlooked Separation Agreement Clauses
While a separation agreement may deal with any immediate disputes, it might have almost nothing to do with what is going to happen later on.
The agreement might specify how much child support is due at the moment, but it will make no provision for updating income. The agreement can create the parenting schedule, yet it won’t cover missed parenting time, holiday schedule alterations, or travel problems.
Commonly overlooked separation agreement clauses may involve:
- Future financial disclosure
- Child or spousal support reviews
- Section 7 expense procedures
- Parenting schedule changes
- Missed parenting time
- Travel and passport arrangements
- Notice requirements
- Property sale or refinancing deadlines
- Insurance obligations
- Dispute resolution
- Regular review dates
- Significant changes in income or employment
Why Can Missing Clauses Cause Problems Later?
Missing clauses often become important when spouses have different expectations about what should happen.
Suppose an agreement says parents will share children’s extracurricular expenses but does not explain:
- Whether both parents must approve an expense first
- How receipts will be provided
- How each parent’s share will be calculated
- When reimbursement must be made
One may expect that registration cannot occur without prior approval.
The other may expect that there is an automatic obligation to reimburse.
Both parties may believe that the agreement backs up their expectations.
Similar issues may also emerge with respect to support reviews, modifications of schedules, sale of real estate, refinancing, travel, or insurance.
A good agreement should not try to predict all future scenarios.
Instead, it should offer a realistic way of handling foreseeable developments.
While drafting the separation agreement, both spouses should think about more than just the present situation.
Are Important Financial Review Clauses Missing?
Financial terms can become outdated as income, employment, expenses, and family circumstances change.
For this reason, financial review provisions are an important part of many separation agreements.
An agreement may need to explain what information must be exchanged and when.
Depending on the circumstances, financial disclosure may include:
- Income tax returns
- Notices of assessment
- Notices of reassessment
- Employment income
- Business income
- Bonuses
- Commissions
- Assets
- Debts
- Significant changes in financial circumstances
Financial disclosure can be particularly relevant when child support, spousal support, or any other kind of financial obligation is tied to income.
Disclosure becomes a particularly relevant issue in relation to domestic contracts under Ontario’s Family Law Act. Under certain circumstances, a domestic contract or a term thereof may be set aside because a party did not disclose material assets, debts, or liabilities existing at the time the contract was made.
While disclosure alone does not ensure that all agreements are enforceable, it is a relevant component in documenting the parties’ financial situation.
Should a Separation Agreement Require Future Income Disclosure?
Where support depends on income, the agreement may set out a clear process for exchanging updated income information.
For example, the agreement can address:
- Which financial documents must be provided
- When those documents are due
- How often information must be exchanged
- What happens after a significant income change
- When child or spousal support will be reviewed
This is especially relevant for those whose income fluctuates on an annual basis.
If an individual earns income through commission, bonus, business, or other irregular sources, he or she would not earn the same amount of money every year.
A review provision will provide the parties with a timeframe when this information will be reviewed and what actions the parties will take upon receipt of such information.
The provisions regarding child support must also comply with the requirements of child support law. The parents must not assume that once an amount is agreed upon, it will never change.
Section 7 Expenses Need Their Own Procedure
Another area that is often too vague is Section 7 special or extraordinary expenses.
A separation agreement may say these expenses will be shared but fail to explain how the process works.
Where relevant, the agreement may address:
- Which expenses may qualify
- Whether advance agreement is required
- How receipts will be exchanged
- Each parent’s contribution
- Reimbursement deadlines
- Insurance reimbursements
- Subsidies or tax benefits
- What happens if the parents disagree about an expense
Not every childcare, medical, educational, or extracurricular cost automatically qualifies as a Section 7 expense.
Clear wording can help parents understand both the expense itself and the procedure for dealing with it.
Which Parenting Clauses Are Often Overlooked?
The parenting schedule can be quite perfect until some practical situations occur which were not covered in the agreement.
For instance, an agreement may state that a child stays for alternate weekends at each parent’s house. However, what will happen during long weekends or holidays such as birthdays?
These details can matter.
Where children are involved, parenting provisions may address:
- The regular parenting schedule
- Holidays and special occasions
- School breaks
- Pickup and drop-off arrangements
- Transportation responsibilities
- Illness
- Missed parenting time
- Schedule-change requests
- Travel
- Passports
- Extracurricular activities
- School communication
- Medical decisions
- Communication with the child
- Major decisions
- Future changes as the child grows
A detailed agreement does not need to control every small parenting decision. However, it may help to establish procedures for situations that are likely to happen.
Should an Agreement Explain How Parenting Schedules Can Change?
Where appropriate, yes. A clear change procedure may help parents respond to new school schedules, activities, travel, and children’s changing needs.
The agreement could explain:
- How a parent requests a change
- Whether the request should be made in writing
- How much notice should usually be given
- How temporary changes are handled
- Whether missed parenting time may be rescheduled
- How larger or permanent changes will be discussed
For example, a schedule that works for a five-year-old may not work as well when the child becomes a teenager with school activities, employment, or other commitments.
The purpose of a review or change procedure is not to make parenting arrangements permanently fixed.
Parenting decisions remain centred on the best interests of the child.
Ontario courts may also disregard parenting terms in a domestic contract where doing so is in the child’s best interests.
Travel is another area that deserves careful attention.
Where relevant, parents may want the agreement to address:
- Advance notice for travel
- Travel itineraries
- Consent documents
- Passport possession
- Passport renewal
- Emergency contact information
- Travel outside Canada
These kinds of details might be helpful in school communications, medical matters, extracurricular activities, and transportation.
The aim is not to develop a policy for all the potential problems that parents may face.
The aim is to make predictable situations easier to handle and avoid unnecessary conflicts.
Are Future-Change, Property and Dispute-Resolution Clauses Missing?
It is not possible for any separation agreement to predict all future events.
Yet, an agreement is able to provide a process for handling any developments which are reasonably predictable.
This can be significant as situations do not usually remain constant following a separation.
Income levels might increase or decrease. There may be a change in the job of one parent. The childcare arrangements for the child might have to be modified. Also, the family home may be sold or refinanced.
A review clause can explain when certain parts of the agreement should be reconsidered.
Depending on the circumstances, an agreement may address future changes involving:
- Income increases or decreases
- Job loss
- Retirement
- Relocation
- Changes in childcare
- New recurring expenses
- Changes in children’s needs
- Changes in parenting schedules
- Property sale
- Refinancing
- Support reviews
The purpose is not to predict every possibility.
Instead, the agreement can establish what happens when an important change occurs.
Property Clauses May Need More Detail Than Expected
Where spouses continue to own a home or other property together, a separation agreement may need detailed procedures.
Simply saying that one spouse will keep the home or that the property will eventually be sold may not answer important practical questions.
Depending on the circumstances, the agreement may address:
- Who will occupy the property temporarily
- Who pays the mortgage
- Who pays property taxes
- Who pays utilities
- Who maintains insurance
- Who is responsible for repairs
- How the property will be valued
- The deadline for refinancing
- The deadline for a buyout
- What happens if refinancing is refused
- When the property must be listed
- How a realtor will be selected
- How the listing price will be determined
- When price reductions may occur
- How sale proceeds will be distributed
For example, an agreement may state that one spouse will refinance the matrimonial home but fail to provide a deadline.
Should Every Separation Agreement Include a Dispute-Resolution Clause?
A dispute-resolution clause may reduce uncertainty by explaining what spouses should do when they disagree about the agreement.
The appropriate process depends on the parties, the issue, and their circumstances.
A clause may establish a sequence such as:
- One spouse gives written notice of the issue.
- The spouses exchange relevant information.
- They attempt direct or lawyer-assisted negotiation.
- They consider mediation where appropriate.
- They follow agreed response deadlines.
- If the dispute remains unresolved, either party may consider other legal remedies.
