Marriage contracts (often known as ‘prenuptial agreements’), are used by couples to set out terms in advance of the marriage. Cohabitation agreements are used for couples who are not married and are not contemplating marriage. Cohabitation agreements may deal with the division of property for unmarried couples to avoid potential litigation down the road.
Under section 52 of the Family Law Act, two people who are already married or who intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or separation, annulment or death.
Marriage contracts may deal with many different marital issues, including:
Prenuptial agreements are enforceable in Canada. Courts in Ontario and other common law provinces of Canada previously considered marriage contracts to be contrary to public policy and unenforceable, but the 1978 Family Law Reform Act (now continued in the Family Law Act) specifically authorizes marriage contracts.
A prenuptial agreement is a contract that two parties enter into in contemplation of marriage. It can also be referred to as a “premarital agreement,” “antenuptial agreement,” or simply a “prenup”; in Canada, it is called a “marriage contract”. This contract describes what property and financial assets, such as stocks, bonds, etc., you and your spouse bring into the marriage known as “pre-marital” assets and how those pre-marital assets will be handled during the marriage and in the event of a divorce. The pre-nuptial agreement will also include how property and assets acquired during the marriage should be divided in the event of a divorce.
A postnuptial agreement (called a “marriage contract” in Canada) is similar to a prenuptial agreement except that it is entered into after the parties have married. In some provinces, postnuptial agreements are not valid if either spouse is contemplating divorce or separation. Prenuptial agreements (or “prenups”) entered into before the marriage are the most common, but “postnuptial” agreements are another option and, as the name implies, are entered into after a couple gets married.
A separation agreement is a document in which separating couples define how their joint assets and responsibilities will be divided between them. They may be used by married or unmarried couples, and are often used instead of divorce proceedings. It is important to note that such agreements are not legally enforceable they can be challenged by either partner but they do carry weight unless the court considers them a fair settlement.
A Marital Settlement Agreement, written and signed by both spouses, is a contract that defines the terms of their divorce. Depending on the issues in your case, the Marital Settlement Agreement must address a variety of issues.
First, custody and parenting time issues must be addressed if children are involved. The parties must identify if they are going to share joint legal custody. They must also designate the Parent of Primary Residence and the Parent of Alternate Residence. A parenting plan needs to be specific. This plan should include a regular schedule as well as a schedule for holidays, vacations and other school breaks.
Some of the benefits of a prenuptial agreement include the following:
Considering a prenup is one of the best ways to open a line of dialogue in your relationship. Talking about a prenup may seem daunting or even scary, but being open and honest about property, finances, and each of your expectations before the wedding may be one of the most beneficial aspects of the process. A properly drafted prenup allows the couple to address the most common legal hurdles in divorce, which can bring a quick resolution to the process and avoid a lengthy court battle.
Streamline the divorce process
No one wants to anticipate a divorce. However, if your marriage does end, a prenup will make the divorce less complicated, since the division of assets already has been negotiated and agreed upon by both parties.
Protects pre-marital assets
Most prenuptial agreements protect all premarital assets. Assets that are jointly acquired during the marriage are typically shared equally.
A prenuptial agreement is a great way to protect both spouses in the event of a divorce. Sure, no one plans on getting divorced. But no one plans on their house burning down, crashing their car, or getting sick. For those unexpected events, everyone purchases insurance. A prenup is merely marriage insurance without a monthly premium.
If you have children during your marriage, you need to protect the property they might inherit. After divorce, you or your partner may decide to remarry, and it’s important to define what assets your children can legally claim so it is never brought into question.
These assets could include:
Even if there are sound legal or financial reasons for getting a prenuptial agreement, it’s not the most romantic thing you can do during your engagement. But not getting a prenup when one is warranted can set you up for disaster. Make sure you’re making the right choice by meeting with a family law attorney near you.
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