Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to getting a marriage contract or prenuptial agreement in Ontario, you should seek professional assistance (e.g. make a post on Dynamic Legal Forms). We have Toronto and Ottawa family law lawyers registered on Dynamic Legal Forms who can offer information, advice, and assistance with respect to your marriage contracts and prenuptial agreements.
In this blog, I thought I’d talk about marriage contracts, which are often referred to as prenuptial agreements (but this is only the case if the marriage has not been entered into yet).
What are they?
Marriage contracts help parties who are going to get married or who are married arrange their financial affairs in case of a separation. Marriage contracts are made by parties in the following typical situations:
- the parties intend to marry each other;
- the parties have been married before, have children from previous marriages and want to ensure that their financial affairs will not be affected by the marriage;
- the parties are married but one of whom is about to receive an inheritance;
- the parties are married but want to exclude one of the party’s property from net family property in the event of death, separation, or termination of the marriage.
What are the benefits of having one?
Without a marriage contract in place, if spouses separate, then the applicable federal and provincial legislation will apply to divide their finances. In Ontario, this is done by dividing a pool of funds called “net family property”. It’s called “net” because you subtract the worth of each spouse on or at the date of marriage. Hence, the net family property is the increase of net worth of the spouses since the marriage. After this figure is determined, it is equalized and each spouse is entitled to half.
Having a marriage contract gives the parties certainty, predictability, and control over their financial arrangements in the case of a separation. While things like spousal support, assets and properties can be dealt with in a marriage contract, anything to do with children of the marriage or possession of the matrimonial home cannot be contracted for. Overall, a clear and fair marriage contract can make separation and divorce much cleaner and cheaper (by avoiding acrimonious litigation!).
What are the legal requirements to have one?
There are three basic requirements for a marriage contract or prenuptial agreement to be validly binding:
- The parties must make full disclosure of their financial assets, liabilities, income and expenses.
- The contract must be in writing and signed by each party before a witness.
- The contract must be entered into voluntarily and not under any duress, undue influence, etc.
It is advisable that each party retain separate counsel to protect their rights and promote their interests. Family law lawyers can help draft, negotiate, and explain marriage contracts to you. The last thing you want is for the marriage to breakdown and a spouse to claim that he or she did not understand the marriage contract, entered into under duress, did not understand it, and did not receive independent legal advice concerning it!