When parties enter the Collaborative Process, they are required to sign a “Participation Agreement.” This document sets out the terms and expectations for all involved—each party, their lawyers, and any professional neutrals they may choose to include. Among its standard provisions, the Agreement typically mandates that neither party may make unilateral changes to the existing status quo without mutual consent. For example, if one party’s paycheque is deposited into a joint account, or if a spouse is maintained on the other’s insurance, these arrangements continue unless both agree otherwise. Similarly, if a child attends an extracurricular activity funded by one parent, that arrangement is preserved. The intention behind this clause is clear: to foster stability and predictability by ensuring the family’s routines and financial practices remain unchanged through the early stages of separation, avoiding surprises and allowing a gradual transition to new financial realities once all parties are able to reach consensus.
The purpose behind these terms is well intentioned and simple: to support families during a time of change by maintaining familiar routines and practices. By keeping things steady, it reduces stress and uncertainty, giving everyone a chance to plan and agree on how things will evolve. This approach is meant to delay major changes until everyone is comfortable and in agreement.
However, although the collaborative process encourages the parties and their lawyers to find creative, family-focused solutions, this doesn’t mean that there should be any expectation by the parties that either of them will be giving up their legal rights. This seems incongruous.
For this reason, despite entering the collaborative process, parties should be mindful of their rights and obligations from the start. They should discuss these rights and obligations with their lawyer, and understand what risks lie in maintaining a financial status quo post-separation, as the Participation Agreement would like them to do.
Retroactive support payments and post-separation adjustments to accounts are two particularly problematic areas when parties continue to maintain a pre-separation financial status quo after separation.
By law, after separation, neither spouse is entitled to receive any windfall or gift from the other party, and the law expects both to pay for their own respective expenses.
Maintaining joint accounts, whether bank accounts, or credit cards, where both parties continue to make personal purchases, becomes problematic. And the longer this status quo continues, the more problematic it becomes.
For example, when parties have a joint account, they are both entitled to the balance on the date of separation. If the parties continue to use the account after separation as they had before, and the balance is significantly different at the time that they are ready to divide it than it was on the date of separation, they begin to argue about who depleted the account or who contributed more than the other person, and who is entitled to more of the account post-separation due to their differing spending patterns from jointly deposited funds.
Support also becomes a point of contention, for example, when one spouse has moved out of the home but continues to share in all the expenses per the pre-separation status-quo, and the other spouse claims they are owed support retroactive to date of separation. Then the parties are left in a position where they have to calculate support back to the date of separation and look at every single transaction in their bank accounts that the payor may have paid for the recipient in lieu of support in order for them to avoid double-counting for support. This is especially difficult if an “inequitable” status quo had been running for months. It becomes very messy, time consuming, and contentious and adds expense and stress to a process that aims to limit it.
It is very important that parties and their lawyers tackle these issues before the passage of time causes them to become contentious and costly to resolve. Parties need to understand the date at which the money in their accounts gets split with their spouse and how continued comingling of finances will affect their ability to divide. They also need to understand their support rights and obligations early on in order to identify how post-separation contributions should be made. Last, parties need to be able to talk about these issues at the very beginning of the process in order to ensure that there are no “surprise rights” that the other will want to claim later in the process. A clear discussion about the parties’ financial rights and obligations, including possible financial rights and obligations, at the outset is imperative to the collaborative process running more smoothly.
