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Jul

17

Pre-nup | Prenuptial Agreements (Part 2): How domestic contracts work…

Toronto business lawyerPre-nups | Marriage Contracts (Part 2)

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 cohabitation, prenuptial or marriage contracts and agreements, you should seek professional assistance (e.g. make a post on Dynamic Legal Forms). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you. You can contact me directly if you need a lawyer.

This is the second of a series of blog posts about prenup or prenup agreements in Ontario. In my first blog, I talked about how property is usually divided when married couples separate under the EQUALIZATION OF NET FAMILY PROPERTY REGIME under the Family Law Act. Here, I’m going to talk about how pre-nups, marriage contracts, and separation agreements can change the way that property is divided when married couples separate.

So under the Family Law Act, couples can enter into written agreements called DOMESTIC CONTRACTS to change the way the Act would normally apply to the division of property between married spouses when they separate. Indeed, the Act could take a back seat to what the couples specifically want and agree to! Now, there are different kinds of domestic contracts for married spouses:

  • Prenuptial Agreements (entered into before the couple marries);
  • Marriage Contracts (entered into after the couple marries); and
  • Separation Agreements (entered into when the couple separates).

Basically, all 3 types of domestic contracts allow the parties to agree on their respective rights and obligations under the marriage on or separation to deal with ownership in or division of property. That’s what sections 52(1)(a) and 54(a) say. To be valid and enforceable, the contract must (among other things) be in writing and signed by the parties and witnessed: section 55(1). Now also keep in mind that the agreement itself must be substantively valid (i.e. it must be clear, complete, and certain enough to be enforceable) and procedurally valid (i.e. it must be entered into without undue influence, duress, misrepresentation, fraud, etc.). These are standard principles of contract that apply to all agreements – including family law agreements such as domestic contracts.

Now, recall in the previous blog I wrote that something a spouse can EXCLUDE from their NET FAMILY PROPERTY through a DOMESTIC CONTRACT is PROPERTY. That’s exactly what section 4(2)6 says: the value of property that the spouses have agreed by a domestic contract is not to be included in the spouse’s net family property does NOT form part of the spouse’s net family property. So, for example, if one of the spouses owns the matrimonial home, he or she can agree with the other spouse not to include that value in his or net family property. As I’ve previously blogged about, while you can address ownership issues of a matrimonial home in a domestic contract, you can’t contract out of a spouse’s right to possess the home after the breakdown of the marriage.

Remember: if you need help with your divorce concerning the division of property, support (child / spouse) or other matters, make a post on Dynamic Legal Forms. We have family law lawyers who can help you!

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