What Is A Marriage Contract?
Disclaimer: This blog is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.
Have you finally decided to marry the love of your life? Congratulations! However, before you start preparing for the big day, you need to consider several legal aspects to do it right. From the marriage certificate and license to the prenuptial agreement, there are many things you should take care of before getting married.
Sometimes marriages don’t work out, and it’s no surprise that one out of 309 individuals is divorced in Canada. It’s estimated that 38% of marriages in Canada end in divorce. This is why it’s crucial to be prepared for the worst-case scenario beforehand. This is why it’s crucial for you to legally protect yourself from the fallouts of divorce before you get married.
Amidst the romance and the excitement, people often forget the marriage contract that haunts them when they need to apply for a divorce. The prenup divides your assets and properties as per the agreement between you and your spouse, which prevents potential legal issues during a divorce case.
Not many Canadians know about marriage contracts, as reports suggest only 8% of married couples use prenups. However, a marriage contract is an excellent way to protect your assets before and after marriage.
Take a look at this complete guide to learn about marriage contracts in Canada:
What Is A Marriage Contract?
A marriage contract is a document endorsed before or after a marriage ceremony that establishes a personalized and tailored set of guidelines for sharing the couple’s assets if they separate or end up dying. Many of the duties of a marriage contract are similar to those of a Will. A cohabitation settlement is similar to a marriage contract, and yet it’s designed for people who plan to be in a live-in relationship or are already living together. If the couple marries each other, their cohabitation agreement becomes a legally valid marriage contract. Not only can marriage contracts and domestic partnership contracts set some guidelines and restrictions for how the couple manages their day-to-day relationship.
Marriage constitutes socio-economic cooperation in every Canadian province, and the results of that cooperation will be distributed between the married couple if they opt for separation and divorce. A marriage contract permits spouses to opt out of provincial legislation in terms of assets.
If properly designed and executed, a marriage contract is enforceable by law. You should follow four fundamental guidelines to have a properly formulated and executed contract:
- The contract must be written down.
- Both partners must sign the document.
- Witnesses are required for the signatures.
- There must be complete transparency and honesty in the consultations events leading to the contract’s signing.
Why Go For Marriage Contracts?
There are three common reasons for couples to enter into a marriage contract. To begin with, a partner who’s quite affluent or whose investment portfolio is expanding in value may prefer to avoid having to account for any growth in income if the relationship ends. When a person possesses substantial amounts of money or anticipates acquiring a large sum of money in the future, they may want to ensure that any growth in total assets doesn’t require equalization. Specific resources, like annuities or property investments, can be safeguarded and preserved if the marriage falls apart.
Secondly, a marriage contract can be implemented to make monetary provisions in advance if the marriage doesn’t work out. For instance, one partner might like to ensure that the other partner will offer enough alimony or welfare benefits if the partnership terminates. Nevertheless, the other partner may choose to restrict the sum and length of any alimony payments. In the case of marital property, income tax responsibilities may be a worry that might be handled. In either case, while the couple is still on cordial terms, they can settle on monetary support.
Lastly, a marriage contract could be utilized to create plans for splitting property and assets gained during the relationship and make unique provisions for specific concerns like businesses or corporate interests in which one or both parties may be involved. Once again, this permits spouses to choose a property division other than that given by the Family Law Act and negotiate a settlement while still on friendly terms.
When Is It Appropriate To Sign A Marriage Contract?
Before getting married, the couple might sign a marriage contract, which will take full effect on the wedding day. Full Financial Disclosure is required.
As a result, property purchased before the partners signed the agreement might need to be shared or subdivided. You can talk to a lawyer about the ramifications of completing a marriage contract after you get hitched.
Consult A Family Lawyer
A lawyer can help you with any personal or interpersonal affairs and legalities. Each type of lawyer specializes in their relevant field and provides services within that particular category. Most people associate Canadian family lawyers solely with divorce and separation, but they handle many more matters as well.
At Nanda and Associate Lawyers, we are one of the best-rated Canadian immigration lawyers in Mississauga. Our family lawyers are well-versed and can help you design a parenting plan tailored to your unique situation.
You can contact us right away to help you create the ideal marriage contract.
About the Author
The author is an experienced family lawyer at Nanda and Associate Lawyers handling child custody cases for the Canadian family law consultants. He has helped many families develop successful marriage contracts and provided proper support for struggling families during their difficult periods.