The Money Smart Divorce Solution

Separation Agreements in Ontario

...Without Going to Court.

Gail Vaz-Oxlade's Guide To The Separation Agreement

For more than 20 years you have witnessed Gail Vaz-Oxlade’s trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a multiple time, best-selling financial author, and one of the top Canadian authors of the past decade. Gail brings her common sense wisdom to answer your questions about the Separation Agreement and divorce in Ontario.

Gail Vaz-Oxlade is Canada’s no-nonsense, money expert.
Gail Vaz-Oxlade Divorce and Finances

Gail Vaz-Oxlade's Guide To The Separation Agreement In Ontario

For more than 20 years you have witnessed Gail Vaz-Oxlade’s trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a multiple time, best-selling financial author, and one of the top Canadian authors of the past decade. Gail brings her common sense wisdom to answer your questions about the Separation Agreement and divorce in Ontario.

Gail Vaz-Oxlade is Canada’s no-nonsense, money expert.
Gail Vaz-Oxlade Divorce and Finances

10 Things You Need to Know About
Separation Agreements in Ontario

What is a Separation Agreement?

A Divorce Agreement is better known in Ontario as a Separation Agreement. This agreement will be the ongoing legal contract between you and your spouse with regards to all issues moving forward. It is very important that this agreement is prepared properly and in accordance to the laws of Ontario, as the decisions you make now will affect you and your children for years to come. Negotiating your financial and parenting arrangements and signing a legal contract (the separation agreement) are the crucial first steps in your divorce process. 

If you and your spouse have decided to separate, then it’s time to start thinking about your settlement arrangements as well as the preparation of a legal separation agreement. You do not need to go to court to settle arrangements between you and your spouse – nor do you need to go to court to enter into a separation agreement.

Does Signing A Separation Agreement End Your Marriage?

Signing a Separation Agreement does not legally end your marriage.

A separation agreement, or even court orders may resolve some family matters but they do not legally end your marriage. In Ontario, the only way to legally end your marriage is to apply for a divorce decree. However, a divorce decree does not in any way protect your interests or assets, ensure support, or guarantee any terms.

What is in a Separation Agreement?

As part of your creating your separation agreement in Ontario, ensure that these vital elements are properly completed:

Full Financial Disclosure
Settlement of all Parenting Arrangements
Child Support Obligations according to Provincial Child Support Guidelines
Spousal Support Obligations
Formal Valuation of Pensions
Division of Assets
Notional Tax Obligations
Division of Debts
Separation of the Matrimonial Home
Future Dispute Resolution Clause
Independent Legal Advice

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 1

The Unofficial Rules of Divorce:

  1. Divorce gets prickly, even in the most amicable situation
  2. It’s often less about the legalities and more about the money
  3. People make expensive mistakes because they don’t make a plan
  4. Before you do anything, understand your rights, obligations & complexities
Family Mediation and Divorce in Ontario

“One of the first questions a reputable lawyer will always ask you is “Where are your financial disclosures and what of your spouse’s disclosures have you seen?” Lawyers ask this because they want to make sure nothing is accidentally missed, that there has not been a misunderstanding of values and to make sure there is no active misrepresentation or non-disclosure. Without reviewing both financial disclosures, a lawyer cannot properly give legal advice on your separation agreement.”

What is Financial Disclosure?

Financial disclosure is the process whereby both you and your spouse formally provide supporting documentation regarding all bank accounts, savings, cash on hand, investments, pensions, and any other assets – as well as declare any outstanding debts and liabilities for the present, for the date that you separated and for the day you were married.

Why do I have to complete a Financial Disclosure?

When you separate, preparing your Financial Disclosure ensures that everyone is able to make all-important financial decisions based on real and accurate financial information. Financial Disclosure protects you by ensuring that you have the information needed to make decisions and ensures that both spouses are being transparent and not attempting to hide assets (or debts).

Financial disclosure will confirm bank balances, account statements, property values, verify RRSPs, and/or gather necessary information on the value of a privately owned business. A formal pension valuation (as opposed to a pension statement) is required. This means there will be no mistakes; no misunderstandings; no secrets; and both spouses are protected. After you and your spouse finally reach an agreement and before you sign any documents, your financial disclosure should be reviewed by a lawyer to ensure that you are fully satisfied with your knowledge of the family finances.

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What if I don’t want to complete a financial disclosure as part of my Separation Agreement?

On May 2nd, 2015, the Family Law Rules in Ontario were updated to include additional requirements for financial disclosure. The law has one simple stipulation: full and complete financial disclosure is required by both spouses.

Though the information in the financial disclosure is important – what really matters is that there has been a full and formal financial disclosure. In other words you must both clearly disclose ALL OF YOUR FINANCES so that both you and your spouse KNOW EXACTLY what you are saying yes or no to.

Does NOT completing Financial Disclosure affect my separation agreement?

The Family Law Act allows the Court to “set aside” (meaning ‘not enforce’) any separation agreement that has not included a full financial disclosure. If your separation agreement is not prepared properly from the beginning and is then later “set aside,” you will have cost yourself more time and money in the long run.

Financial disclosure is a core piece of the separation puzzle. Yet, for whatever reason, people sometimes have difficulty with the concept of full financial disclosure. Typical objections include:

Financial Disclosure Excuses

  1. “That information predates our date of separation, so it isn’t applicable now.”
  2. “My spouse already knows all this information.”
  3. “I don’t want my private information reviewed by anyone.”
  4. “We are splitting everything up on our own terms, so this information is not necessary.”
  5. “Financial disclosure just seems like too much work.”
  6. “I’m afraid if my spouse (or their lawyer) sees the real numbers they will come after me for more.”
Separation Agreement

“Can’t I just take my own homemade Separation Agreement to a Lawyer and get them to sign it?”

A lawyer will never just sign off on someone else’s document. They are required to give you legal advice based on the information provided. Lawyers can get into big trouble with the Law Society of Upper Canada if they give advice without reviewing the complete scenario and your full financial disclosures. Without complete financial disclosure, a lawyer cannot give you proper legal advice.”

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 2

The Top 3 Divorce Mistakes People Make

1. Hiring a lawyer before understanding all their negotiation options

2. Succumbing to emotions at the expense of their financial future

3. Not starting with a smart, legal and financially savvy go-forward plan

Separation Agreement Templates

Can I make a Home-Made Separation Agreements?

For separation in Ontario, you are NOT required by law to retain a lawyer and you are entitled to sit down and write your own homemade agreements. If you want, you and your spouse can legally write whatever you want on the back of a napkin, each sign it, have it witnessed and call it your Separation Agreement.

But here’s the thing… writing a legal separation agreement is the easier part. More challenging is creating an agreement that is legally BINDING or whether it is even an ENFORCEABLE agreement to begin with. And months or years from now, when your ex-partner wants to revisit the terms of this agreement, a home-made agreement has a good chance of being thrown out… simply because it wasn’t prepared the right way from the beginning.

And here’s the other thing. If your spouse is willing to let you off the hook with a “You keep yours and Ill keep mine” offer… you don’t walk down to our offices… you run! Because this is what people forget: if its not prepared properly – it won’t stick! And if your spouse is willing to make this easy, you want to make sure this great arrangement sticks, not only today but for years to come.

Process is Everything!
Yes it is important WHAT goes into your agreement, but HOW it is prepared is just as important. As far as the province is concerned the two of you can agree to just about anything as long as its not outside existing Ontario laws, is done with full financial disclosure and ensures that both parties are aware of all of their rights, responsibilities and obligations before they sign anything.

This means that should your homemade agreement end up in front of a judge, they will look to see whether there were proper financial disclosure processes between the two of you, whether the agreement was signed under any kind of duress and whether each party received independent legal advice to understand what they were signing. If this didn’t happen, plan that your homemade agreement will go out the door and you are now into the game for the big bucks!

Keep in mind…
Your Separation Agreement is probably THE MOST IMPORTANT legal document that you will ever create and sign. It is going to follow you for years.

Not only will it define the terms between you and your ex-spouse for years, not only will it dictate how your children will be raised, not only will it define your financial future moving forward, but it will be required when you apply for a mortgage, transfer house title, file your taxes, take out a loan, set your children up in daycare, and when you apply to be remarried, etc., etc., etc.!

Are You Entitled To Share The Matrimonial Home?

CLICK HERE to learn more about how the matrimonial home is dealt with in Ontario Separation Agreements. 

Divorce in Ontario

“In Ontario, if you intend to buy out your spouse’s share of the matrimonial home, you will have to pay land transfer tax on your spouse share, unless you have a formal separation agreement in place.”

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 3

The Matrimonial Home & Your Separation Agreement

When couples separate in Ontario, typically the family home is sold – either to you, to your spouse or to a third-party buyer. You should always have a formal Separation Agreement in place that outlines all financial terms before attempting to change anything pertaining to home ownership.

A formal Separation Agreement is required to instruct your real estate lawyer how to disperse assets upon the sale of your home. Equity funds will sit in your real estate lawyer’s trust account until a Separation Agreement instructs the lawyer how to disperse the funds.

ALL Canadian Banks will require your legal Separation Agreement before they will approve you for a new mortgage. You will be required to qualify for a new mortgage based on your income and your debts alone regardless of what is outlined in that Agreement. Support payments will be considered as part of your total debt load when banks review your application.

If both parties are still on an existing mortgage then from the Bank’s perspective both are responsible for the payment of the mortgage and all taxes until one of them is removed.

The Parenting Plan Section of The Separation Agreement

What is a Parenting Plan?

A Parenting Plan is the written legal document that outlines how you and your spouse, as co-parents, will raise your children after your separation or divorce. Your parenting plan will focus on such parenting arrangement as:

  • child support and providing for your children’s needs
  • how decisions about the children are made
  • how information is shared between parents
  • where the children will live and when each parent will spend time with the child
  • how children will have access to grandparents and other relatives
  • how and where holidays and special occasions will be spent
  • how new partners will be introduced to the children
  • how other parenting issues may be addressed.


A good Parenting Plan is created first and foremost with the children’s interests and needs in mind. When negotiated and prepared properly, it will help to reduce conflict between you and your ex-spouse by setting out clear guidelines and expectations.

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 4

How to Avoid A Messy Divorce

  1. Seriously consider mediation before lawyer litigation
  2. If at all possible, stay out of the Family Courts
  3. Gather and organize your financial documents
  4. Do your homework, understand how divorce works in Ontario

How Is Child Support Calculated?

Child Support in Ontario must be calculated according to the Ontario Child Support Guidelines. Both parents maintain the responsibility of financially supporting their children and that support is based on your income and the number of children involved. Child support will continue until your children are 18 years old or until they have completed their post-secondary education.

In Ontario, the government has created an office called the Family Responsibility Office (FRO), which enforces support payments if necessary. The FRO will require paying parents to make all support payments to the FRO who will, in turn, send the payment to the other parent.

If any payments are missed, the Family Responsibility Office will take action to enforce the order or agreement which can include the garnishing of wages, registering a lien against a property, taking money from a bank account, ordering a collection, cancelling a passport or suspending a driver’s license.

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 5

“Research has proven that children cope better with their parents’ separation if parents co-operate while negotiating their settlement arrangements (as opposed to litigating) and while preparing their Parenting Plan.”

3 Ways We Can Help You RIGHT NOW

FREE Separation Plan

A personalized Report for your situation. Understand what’s involved with support, debts, banks accounts, pensions and your home BEFORE you start any legal processes.

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Not everyone is ready to talk with someone in person. You can call The Common Sense Divorce any time and listen to a pre-recorded 2-minute message about our services.

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How Is Spousal Support Calculated In Ontario?

In Ontario, the law views marriage as a financial partnership. When that partnership breaks down, the spouse with more income or assets may have to pay spousal support to the other spouse in order to equalize the financial situation as arrived at the break-up of that partnership.

The Separation Agreement will always deal with Spousal Support

Your Separation Agreement will specify if any spousal support will be paid from one spouse to the other and if so, how much, when, and for how long. The law considers a number of factors when deciding how much spousal support and the length of time that it should be paid, including how much support the asking person requires in order to meet their needs, and how much the other spouse can afford to pay. A person may claim spousal support long term as equalization payments that will keep them from ending up in serious financial difficulty or short term to help them become financially self-sufficient.

If spousal support claims are waived, it is very important that your Separation Agreement is prepared properly in order to ensure that this waiver is binding and remains enforceable in the future. A professionally prepared Separation Agreement will not only capture such waivers with the proper legal verbiage, but it will also indicate why this waiver is included (for example, in exchange for a larger share of the matrimonial home, or some other asset in property division).

Are Pensions included in a Separtion Agreement?

A work pension does not belong to one spouse or the other. It is considered a matrimonial asset that must go into the divorce negotiations for fair and equitable distribution. It is therefore part of the division of assets that will be included in your Separation Agreement.

How Do I Value Pensions for a Separation Agreement?

One of the biggest mistakes people make is to assume that they know the value of a pension based on a Pension Statement. There is a huge difference between a ‘Pension Statement’ and a ‘Pension Valuation.’ A regular annual pension statement does not include the valuation of a pension as an asset for the purposes of family law.

You should never make decisions about pensions without first receiving professional financial and legal advice.

divorce costs

“How you negotiate the terms of pensions will have tax implications and notable ramifications on your personal retirement planning. Whether you choose mediation, a collaborative process, or the lawyer-led negotiations,  you will be helped to understand whether you are entitled to a portion of your spouse’s pension, determine the exact amount that you may be entitled to receive and how to best to apportion pensions.”

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 6

What It Means When Your Spouse Suggests Mediation

  1. Mediation is typically cheaper than lawyers or the courts
  2. Mediation tends to be the faster divorce process
  3. The courts will require you to consider mediation first
  4. Mediation has an excellent success rate

What is the Dispute Resolution Clause in the Separation Agreement?

Your Separation Agreement and specifically the elements pertaining to support and the parenting plan will include a clause describing the dispute resolution process by which potential future disagreements will be dealt with.

It is an important clause that ensures you the option to pursue any number of potential dispute resolution avenues instead of only being able to resolve issues with lawyers or court. Typically negotiations that were originally resolved out of court will include a similar family dispute resolution process to deal with any potential future agreements.

Gail Vaz-Oxlade's Guide to The Separation Agreement in Ontario 7

“Family settlements that are created through mediation and settled out of court are statistically proven to minimize future conflict.”

parenting plans ontario

“Some people believe that it is sufficient to simply hire a Notary to witness an Agreement.  A Notary does not provide ILA but rather only witnesses the signatures. Only a family Lawyer can give legal advice on a Separation Agreement. As well, a lawyer in Ontario, cannot give legal advice to both spouses.”

What Is Independent Legal Advice?

The Family Law Act grants the court the power to set aside or nullify a Separation Agreement or any clause in that contract if:

  1. a spouse failed to disclose to the other significant assets, significant debts or other liabilities that existed when the Separation Agreement was made;
  2. if a spouse signs an agreement while being forced, coerced or under duress
  3. if a spouse did not understand the nature or consequences of the Separation Agreement; or
  4. if the Separation Agreement was not prepared in accordance with the law of contract.


It is for this reason that mediation recommends independent legal advice (ILA) to ensure that everyone understands their rights responsibilities and obligations before they sign their final Separation Agreement. A lawyer providing ILA will also review the financial disclosures, and explain if the contract is fair, valid and enforceable.

Separation Agreement & The Wisdom of ILA

Remember, it is also in each person’s best interest to ensure sure that your spouse receives independent legal advice. Ensuring that your spouse receives ILA before they sign a Separation Agreement will nullify any future claims that they did not understand what they were signing or that they were signing under duress. When both spouses receive ILA, a Separation Agreement is presumed to be binding on both you and your spouse.

A lawyer cannot give legal advice to both spouses. Also, some people believe that it is sufficient to simply hire a Notary to witness an Agreement. A Notary does not provide ILA but rather only witnesses the signatures. Only a family Lawyer can give legal advice on a Separation Agreement.

The Final Word on Separation Agreements?

I’m all for saving money…
Save dollars on your groceries. Save your dollars on your heating bill this winter. Heck, shave your head and save a few bucks on hairdos, but when you are drafting a document that is this important…you want it done right!

A LITTLE about legalities… a LOT about finances
Sure, there are legalities involved with your Separation Agreement. Just like good fences make good neighbors, so to do good legal agreements make good Exes. Its true, lawyers lay awake at night wondering if a word is to be a should, a would, a could or a shall. And lets nor undermine this role… that difference in simple legal verbiage, can cost you tens of thousands of dollars later on.

BUT beyond the legal-ese, your Separation Agreement is REALLY about your money – financial planning, debt issues, retirement planning and most importantly tax implications. A wise Separation Agreement takes your post separation financial planning into consideration. Should I pay support monthly or a one-time payment? Will my kids still qualify for OSAP? Do I divide my pension now or later? Do I take the equity from the house or from the RRSP’s? Can I afford to keep the house or should we sell it? How do I deal with residual debt? Can I still retire on schedule?

These are REALLY important questions that will need to be addressed. And unless you are profoundly financially savvy on your own, it pays to bring in some professional advice. This is one of the benefits of having the right team of professionals working to craft your separation agreement. A shrewd team of legal and financial professionals will help you plan for a future where your money is best working for you!