Separation Agreements in BC: What They Settle, and When a Court Can Set One Aside

When a relationship ends, the paperwork people think about first is the divorce. In practice the document that does most of the work is the separation agreement: the contract that settles who keeps what, who pays what, and how the children's time is arranged.

Because it is a contract, people sometimes write their own and sign it at the kitchen table. Some of those agreements hold. Others are set aside years later, with the property division reopened. This article explains what a separation agreement can cover in British Columbia, why you do not need to wait for a divorce to make one, and the grounds in the Family Law Act on which a court can undo one.

Separation and divorce are different things

You are separated when one or both of you decide the relationship is over and act on it. Nothing has to be filed, and in BC you can be separated while still living under the same roof. Divorce is different: it is a court order ending a marriage, and under the Divorce Act the usual ground is that the spouses have lived separate and apart for at least one year. A short attempt at reconciliation of up to 90 days does not restart that year.

The important point is that you do not have to wait for the year to pass, or for a divorce at all, to resolve property, support and parenting. Unmarried spouses never get a divorce; married spouses usually settle everything by agreement first and obtain the divorce order later. The separation agreement is where that settlement lives.

What a separation agreement can settle

The Family Law Act expressly allows spouses to make agreements about property, and gives them a good deal of freedom in doing so. A well-drafted agreement typically deals with:

• Property and debt. Spouses can agree to divide family property and family debt equally or unequally, agree that particular items are or are not family property, and agree on how and when things are valued. The Act even allows agreements about who keeps a companion animal.
• The family home. Whether it is sold, who buys out whom and by when, who pays the mortgage in the meantime, and how the proceeds are split.
• Spousal support. Whether any is paid, how much, for how long, and what happens if circumstances change.
• Child support. The amount and the sharing of special expenses. Child support is treated as the child's entitlement, so agreements about it receive closer scrutiny than agreements about property.
• Parenting. Where the children live, how time is shared, how decisions are made and how disagreements will be resolved.

Done well, the agreement becomes the single reference point for the years that follow. Done badly, it becomes the subject of the next dispute.

Why kitchen-table agreements go wrong

The Family Law Act sets out when a court may set aside all or part of a written, witnessed agreement about property. The grounds focus on how the agreement was made. A court may set it aside if, at the time it was signed, a spouse:

• failed to disclose significant property or debts, or other information relevant to the negotiation;
• took improper advantage of the other spouse's vulnerability, including their ignorance, need or distress;
• did not understand the nature or consequences of the agreement; or
• was in circumstances that would, under the general law of contract, make the agreement voidable, such as duress or misrepresentation.

Even where none of those applies, the court may still set aside a property agreement if it would be significantly unfair to enforce it, taking into account how much time has passed, the spouses' intention to achieve certainty, and how far they have relied on its terms. The longer an agreement has been acted on, the more reluctant a court tends to be to disturb it, but the door is not closed.

There is a time limit for this too. An application to set aside an agreement must generally be started within two years after the spouse first discovered, or reasonably ought to have discovered, the grounds for doing so.

What makes an agreement stick

Read the grounds above in reverse and you have a checklist. Both spouses exchange full financial disclosure, and the agreement records that they did. Each spouse has the chance to get independent legal advice before signing, so that neither can later say they did not understand the consequences. Nobody signs under time pressure or in the middle of a crisis. The terms are realistic enough that both people can live with them, because an agreement that is one-sided on paper invites a challenge later. And the document itself is in writing, signed by both spouses and witnessed, which is what brings it within the Act's framework in the first place.

None of this requires a fight. Many agreements are reached through direct negotiation between lawyers or through mediation, with each spouse advised separately. The cost of doing it properly is almost always a fraction of the cost of reopening it.

When to start

Sooner than feels natural. Property is valued around the date of separation, so delay creates arguments about values. If the home is to be sold, the agreement should be in place before it is listed. And unmarried spouses have only two years from separation to bring a property or spousal support claim to court, so an agreement that is still "being discussed" at the eighteen-month mark needs attention.

Separating? Get the agreement right the first time

Our family law lawyers draft and review separation agreements, provide independent legal advice on agreements prepared by the other side, and advise on whether an existing agreement is at risk of being set aside.

Call 604-259-2844 or send us a message to arrange a confidential consultation at our Vancouver office.