When Heart and Mind Unite: A Guide to Marriage Contracts In Ontario

The vicissitudes of a human heart are a hallmark of human experience. Despite our best aspirations, no human being can truthfully provide absolute guarantees to a romantic partner. All we can do is life and love with intent, honesty and integrity. Change and growth, however, are the only constant, and humans only learn my making mistakes. While life is filled with surprises, your financial future should not be one of them. Gay, straight or bi, we are all part of this human condition. Entering into a marriage contract (prenup or postnup agreement) could be one of the greatest acts of kindness, respect and integrity that you can offer your spouse and yourself.

Psychology of Marriage Contracts

Marriage contracts are among the most sensitive and emotionally charged legal documents. Negotiating a cohabitation agreement or a marriage contract runs contrary to most people’s ideal of romantic relationship because such an agreement requires contemplating dissolution. Nevertheless, entering into a domestic contract is better seen as a sign of mutual respect as it is rooted in the belief that your relationship is strong enough to handle serious discussions about each party’s needs. One thing that I have learned as a family lawyer in Toronto is that rather than a repudiation of a relationship, domestic contracts are a prudent and practical move that establishes and protects everyone’s property rights. Entering into a domestic contract can save you strife and expense of litigation down the road, or at the very least provide a peace of mind. Think about this way: if you marriage does not pan out the way you expected, having a marriage contract will allow you to focus your energy on the emotional aspects of decoupling and healing, rather than having to deal with rancorous financial disputes.

What Can Marriage Contracts Do?

Marriages are great – until they are not. Marriage contracts, otherwise known as prenuptial agreements  (prenups or post-nups), or their cousins, cohabitation agreements (for non-married, common-law couples), exist to limit your financial exposure in the event that your marriage does not work out. Full financial disclosure is crucial in negotiating a marriage contract, as this requirement of financial transparency is designed to bring forward any issues that could lead to potentially dangerous surprises down the matrimonial road. In recent years, marriage contracts have been gaining favour with Canadians. These domestic agreements are designed to protect each person in case of a breakdown of a relationship and divorce and alter the general property rights and various other legal entitlements of married couples. Here is a summary of what marriage contracts can and cannot do for you:

  1. Marriage contract usually change the equalization of net family property by defining ownership of certain pieces of property between your spouse and yourself. Not only will a marriage contract safeguard all of your pre-marriage assets in the event of divorce, but it will also shield you from having to share any increase in the value of property that you owned at the date of marriage. When drafting a marriage contract, you can also determine who will have ownership of any secondary or assets that you purchase together over the course of your marriage.
  1. By entering into a marriage contract or a prenup / postnup, you will likely be safe from pre-marriage debt, financial issues, business ownership, or loans that your spouse may have incurred, and you will be able to address in a mutually satisfactory fashion the division of any joint debts and liabilities. Marriage contracts can provide peace of mind by helping you and your spouse avoid disputes over asset distribution and they can spell out what gifts or inheritances will be shared or held exclusively by one spouse or the other.
  1. Under some circumstances, a marriage contract can either do away with spousal support obligations or modify them in a manner that reflects both parties’ values and concerns. A marriage contract can also be a useful indicator of intent concerning each parent’s right to direct the education and moral training of their children.

Limitation of Marriage Contracts

Despite its initial appearance as a magic wand for the divorcing couples, a marriage contract or a prenup has limitations. Some of the most important ones are the possession of the matrimonial home and the custody of the children.

1) Part II of the Ontario Family Law Act provides that each spouse has an equal right of possession of any matrimonial home and that neither party can sell or mortgage a matrimonial home without the written consent of the other spouse. Any provisions in a marriage contract purporting to limit these rights are unenforceable.
2) Marriage contracts cannot prospectively determine the custody of the children or the children of the marriage, as such decisions are subject to the best interests of the child test. In the determination of matters respecting the support, education, moral training, or custody of a child, a judge may disregard any provision of a marriage contract.

No marriage contract lawyer can work miracles. Whether you are entering into a prenup or a postnup agreement, these contracts are expected to be fair and reasonable legal documents that are designed to protect both parties over the long term. Please note that drafting a patently one-sided agreement may run the risk of undermining the enforceability of the marriage contract in the future under various common law and equitable doctrines. As always, to ensure that your rights are protected, contact a knowledgeable Toronto marriage contract lawyer.