Marriage Contracts! Romantic? No. Practical? Yes!
Marriage Contracts! Romantic? No. Practical? Yes!
Who Benefits? Simply put, if you are getting married, or are already married and would like to protect specific assets that you own, or have just received, or limit the amount of spousal support to be paid on separation, you should consider entering into a Marriage Contract. If you’ve already gone through a divorce and have equalized and paid out part of your assets to your former spouse, or given up a good part of your savings or pension, you may not want to go through that a second time. A Marriage Contract can protect you.
When does it need to be done? In the USA these are known as “Pre-Nups” as in pre-nuptial. But what a lot of people do not know is that in Ontario you can negotiate and enter into a marriage contract once you are already married. WHAT!?
That’s right, you can enter into the marriage contract before you are married, in anticipation of the marriage, or you can enter into a marriage contract after you are married, as long as you are legally married and still living together.
If you are negotiating too close to your wedding, it is impossible not to feel some pressure or duress, who doesn’t partially lose their mind before their wedding? So ideally, you want to start the process as early as possible. Romantic? NO. Practical? YES.
Duress - One of the concerns lawyers have is that the contract is valid, and not entered into by either party under duress, pressure or deceit.
Often one person is pushing the other to enter into the agreement before they commit to marriage. By its nature the contract can be somewhat skewed, since often one person owns more assets, or earns a much higher income, or is a beneficiary of a family trust that will want to be protected. Sometimes both parties have assets or income they want to protect and both want to enter into the contract.
One way of avoiding duress, if you are too close to your wedding, is to negotiate your contract after you are married, though the risk here is that one spouse, often who is limiting their rights or entitlement under the current family laws may decide to renege or refuse to sign. Then you are out of luck.
Another option is to sign the agreement, and agree to have both parties sign the document again after the wedding, or when the honeymoon ends, so to speak. Or you can agree in writing to continue negotiating after the wedding, and have a temporary partial agreement in place beforehand.
What is the Purpose of a Marriage Contract?
Why should we go through the trouble? We are so in love now and will never get divorced or be mean to each other…
The Marriage Contract is an agreement to settle your marriage differently than what is written in the current law; you may want to have your own limitations. You are telling the court and the world that “we know what the law says we are entitled to or required to do on separation, and we want to do something different. Please respect our decision.”
You are negotiating the specifics of your separation (or death of one spouse) when both spouses are level-headed, and yes, still in love and respectful. This way you can both make sure you are treating each other fairly, and not lashing out once you are upset or hating your partner.
It also allows both partners to know what the expectation is on separation.
Example: If you are both financially independent, will hire a nanny to care for any future children, and negotiated that neither of you will ask for spousal support, then it should not come as a surprise on separation that your spouse will not entertain the thought of spousal support.
Example: If you married into a family hoping to play into their hearts to get their millions from the Trust they set up for their children, but sign a marriage contract stating that anything relating to the Trust is “hands off”, then you don’t need to deal with that on separation, and you know you won’t be seeing any of that money.
Everything is essentially negotiated beforehand. The contract allows two people to move forward with the difficulties of restructuring their family on separation without the added stress of fighting how to divide your assets or who can claim how much spousal support.
So, ROMANTIC? NO. PRACTICAL? YES. FOR WHEN YOU SEPARATE. Now, hopefully you just sign the agreement and tuck it away in a drawer and never have to look at it again…
Elinor Shinehoft, Shinehoft Law, obtained her B.A. from the University of Toronto in 1996, and completed her law degree at Osgoode Hall in 2001. She later received her Post-Graduate Certificate in Human Resources Management from Sheridan College. The first decade of her career was focused on personal injury law, representing plaintiffs in Hamilton and the GTA, who have suffered serious injuries.
Since starting her own law firm in 2013, Elinor’s focus has shifted to family law and estates. Elinor's passion is helping people through different stages in their lives, from marriage or cohabitation, to separation and divorce, to planning for your last years and death, while ensuring that your family is taken care of. Elinor works collaboratively to resolve parenting, custody, support and property issues outside of the court system, but will litigate and attend court when necessary. She prepares wills and powers of attorney for property and personal care, and helps those who have lost loved ones administer their families' estates.