When parties are going through a divorce, they may need to determine issues concerning spousal support. Parties can address issues through a separation agreement, mediation and arbitration, or court, which is often the last resort. It can be helpful for parties to address spousal support in a separation agreement, as it is typically less costly than going to trial and having a judge make this determination. A separation agreement may provide some certainty about the outcome, as the parties can decide how to address the issues rather than leaving it to an alternative dispute decision-maker or a judge.
With spousal support, an appropriate amount is highly dependent on the circumstances of the case. If parties choose to include terms concerning spousal support in their separation agreement, it is important to consider the entire context to determine an appropriate amount. Sometimes, spousal support may be of a shorter duration, as was the case in McAulay v. McAulay, 2021 ABQB 381. In that case, the court upheld the separation agreement where the parties agreed that the husband would pay the wife half of his net income three years after separation, despite their 15-year marriage.
In this post, we will discuss how the court came to this conclusion, providing key takeaways for parties addressing spousal support in a separation agreement.
Unlike child support, which is the right of the child, entitlement to spousal support is based on the guiding objectives of the Divorce Act and the Alberta Family Law Act. Not every spouse is entitled to spousal support.
According to s. 15.2(6) of the Divorce Act and s. 60 of the Alberta Family Law Act, the objectives of a spousal support order seek to do the following:
There are two types of spousal support entitlements: compensatory and non-compensatory. A party may be entitled to spousal support based on a combination of compensatory and non-compensatory factors.
Compensatory support is available for a spouse who made contributions toward the marriage. In other words, compensatory spousal support addresses economic losses that may have arisen from the spouse’s role in the marriage. A common example would be if a spouse stopped working to assume the majority of parenting or household responsibilities. Compensatory spousal support exists to give the disadvantaged spouse an opportunity to re-enter the workforce, including obtaining training to do so. The court will also look at what advantages were received by the other spouse as a result of the disadvantaged spouse’s contributions to the marriage.
Other examples of where compensatory spousal support may be appropriate are:
In some cases, a combination of these circumstances described above may be used to find that there was a compensatory entitlement to spousal support for the disadvantaged spouse.
The other type of entitlement to spousal support is non-compensatory. In a marriage, there is often an interdependency between the parties. After the marriage breaks down, one spouse may be unable to rely on the other spouse financially and experience economic hardship. A non-compensatory entitlement to spousal support is based on the spouse’s needs after the marriage ends.
A spouse’s needs will be measured based on the marital standard of living and any decline in the post-marriage standard of living. Therefore, even if a spouse can still meet their basic needs after separation, this does not mean they do not have an economic need arising from the marriage breakdown. If their marital standard of living was very high and has greatly decreased, then the court may find that they are still entitled to non-compensatory spousal support. Non-compensatory spousal support is meant to allow the spouse to be economically self-sufficient after the marriage.
Upon separation, some parties may decide to address spousal support in a separation agreement. Given the circumstances, they can set terms based on what they think is fair. This gives the parties a degree of certainty, as they can rely on the terms unless it is challenged in court.
In the McAulay case, the parties had a separation agreement that specified that the husband would pay the wife three years of spousal support based on 50 per cent of his net income. The court upheld this term despite their 15-year marriage.
In the agreement, the husband was to pay the wife support for three years after separation, which would decrease yearly. He would pay her $3,000 per month in the first year, $2,500 per month in the second year, and $1,500 per month in the third year. After these three years, the husband’s obligation to pay spousal support would terminate, and each party would waive their right to pursue future spousal support from each other.
The wife claimed that the agreement was invalid as it was signed under duress, the agreement was unconscionable, or there was a lack of disclosure. The husband claimed the agreement was valid, as it met all the statutory requirements for execution and was made with full and frank disclosure.
The court found that the parties shared full disclosure, which was not signed under duress. It was also not unconscionable. According to the agreement, the family property would be shared equally, and support reflected half of the husband’s net income. The duration of spousal support was relatively short. Still, it was contemplated by the parties, given the context that the wife was in school pursuing her graphic design diploma, and she was expected to be economically self-sufficient in approximately three years. Also, the husband took on all of the matrimonial debt and financial responsibility of child care without any child support paid by the wife. The wife also received half of the pension, which reflected part of her contribution as the homemaker while the husband worked.
The wife also discussed with her first lawyer that the spousal support may have been less than what she was entitled to, but she agreed to it anyway. A party cannot later choose not to be bound by the agreement based on their belief that the contract was void or unenforceable when it was formed.
Overall, the court concluded that the spousal support terms were fair despite appearing to be a short duration given a 15-year marriage.
Entitlement to spousal support, as well as the amount and duration, highly depends on the facts of the case. You may be entitled to spousal support. You should proactively discuss it with one of our family law lawyers at Mincher Koeman, who are experienced in assisting parties with spousal support claims. Our Calgary family law lawyers are dedicated to finding the best resolution for you after divorce.
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