Fact vs fiction: Marriage contracts

Marriage contracts, or prenuptial agreements, can safeguard both parties and clarify expectations in case of separation. By outlining asset division and other matters, they can reduce divorce-related stress. Our blog aims to provide information about marriage contracts and help you decide if it's right for you.

Let’s start with fiction. Below are some common misconceptions about marriage contracts that are FALSE:

• Only people that don’t trust their spouse have a marriage contract.

• The only purpose is to protect one’s wealth.

• Marriage contracts can include rights to the matrimonial home.

• The contract must be drafted and signed prior to marriage.

• Matters pertaining to children such as who gets decision-making responsibility, and the division of parenting time can be included.

• Both spouses can work with the same law firm to draft the contract.

Important TRUTHS about marriage contracts:

• They cover assets, debts, spousal support, claims to businesses, and non-matrimonial properties.

• Without one, each spouse is entitled to half the difference in net worth from the date of marriage to the date of separation.

• Cohabitation agreements become marriage contracts unless a termination clause is added.

• The contract cannot cover rights to the matrimonial home, decision-making responsibility, or parenting time.

• It may not be legally binding if either party signed it under duress or didn't fully comprehend the terms or disclose critical information.

If you think a marriage contract may be right for you, the first step is for you and your spouse to seek independent legal device, meaning you cannot work with the same lawyer or law firm. Next, you must disclose all financial information to each other including your income, investments, debts, RRSP, etc. It’s then important for you and your spouse to discuss what you would like to be included in the agreement. Your legal counsel will then work with your spouse’s counsel to draft an agreement. Once both spouses are satisfied with the agreement and understand all of the terms, the in-writing agreement must be signed and witnessed to make it legally binding.

Our team at INB Family Law has the skill and experience that is necessary when it comes to drafting an important agreement such as a marriage contract. If you think a marriage contract is right for you and your spouse, please don’t hesitate to contact us at info@inbfamilylaw.com or call us at 905-215-1905.