What Is a Prenup Agreement Or a Marriage Contract?

When a couple is engaged, there are many plans and decisions to be made before the wedding. In addition to deciding where to live and how to get married, every couple should also consider writing a marriage contract, commonly referred to as a prenup. A prenup can help people plan for their future and protect a couple from an expensive legal battle in the event of a breakup.

What is a prenup?

A prenup or prenuptial agreement is an agreement between a couple before getting married. In Ontario, this type of premarital agreement is called a marriage contract. Marriage contracts are broader than prenups because they may be entered into by a couple either intending to marry or those already married.

A marriage contract is a domestic contract that states what happens if the couple separates, divorces, or one partner dies. Like other contracts, a prenup can be changed if both parties agree to the new terms.

What can and cannot go into a prenup or marriage contract?

A benefit of a prenup or marriage contract is altering the default rules. However, there are still parameters you must follow. In a marriage contract, a couple may decide only on four specific areas. A couple may not discuss a couple of topics in the agreement.

  1. Family Property & Assets

In their marriage contract, a couple can decide how property will be divided and who will own specific pieces of property. The property includes both real estate and other physical items and assets. Partners can set specific provisions for property, or they can set property exclusions for the equalization payment.

Couples may agree that one partner is entitled to keep the increased value in an object instead of splitting it. Financial terms and conditions may also be included in the agreement. For example, one spouse may have significant debt from school, which is agreed to be paid for by the other spouse. Or business ownership can be addressed and ownership predetermined should the relationship end.

However, the prenup agreement cannot limit each spouse’s equal right to possess the matrimonial home. The Family Law Act provides for this right.

2. Spousal Support Payments

Spousal support payments can be stipulated in a prenup agreement. For example, if the couple plans to have one partner provide homemaking duties while the other works, the prenup agreement can obligate the working spouse to pay support to the homemaking spouse in the event of a divorce. While support payment obligations and entitlements can be agreed upon within a prenup, payment amounts are best left out of the agreement since unpredictable life events (eg. promotions, demotions, terminations) may affect a fair payment amount. It’s best to simply detail how support will be calculated. Other support terms could be eligibility conditions for support or payment terms.

3. Education and Moral Training of Children

Another area a couple may include within their marriage contract is the education and moral training of their current and future children. A couple might want to predetermine whether children will attend public or private school. The religious upbringing of any children may also be specified.

However, decision-making responsibility and parenting time may not be included within a marriage contract. These must be decided based on what is in the best interest of the child. Until the relationship ends, this cannot be determined as contextual factors must be considered.

4. Other matters to Settle Affairs

If a particular term or condition doe not fit into the other defined areas of the contract, this acts as a catchall for all miscellaneous terms.

Why is a prenup or marriage contract important?

A prenup or marriage contract is important for many reasons. Making your agreement is a good way to contemplate and plan for your future with your partner. It’s also typically easier to make decisions about child-rearing, support, property and financings when the relationship is loving and amicable instead of making these decisions during or after a break-up, when the relationship may be more contentious.

A prenup or marriage contract also gives you the flexibility to opt out of or bypass some of the legislative requirements and procedural rules that can be lengthy, costly and unnecessary. Agreeing in advance to avoid certain aspects of the traditional divorce process can make the marriage dissolution more efficient and less expensive.

What is required to make a prenup or marriage contract enforceable?

To be legally binding and valid, a marriage contract must be documented in writing (as opposed to an oral agreement). Both parties must sign the contract and it needs to be witnessed. Any terms regarding children need to have considered the child’s best interest. A marriage contract needs to be based on both parties’ completely disclosing all assets and debts. Both spouses also must understand the contract and its consequences. A court may also invalidate the domestic contract if it is extremely unfair.

Each partner is required to get independent legal advice regarding the agreement. Getting legal advice usually requires extensively discussing the contract. This type of thorough conversation is a demonstration of a person understanding the contract. A lawyer can also verify if there was full disclosure. Independent legal advice is also required to ensure one spouse did not pressure the other into signing the agreement. Lastly, not getting independent legal advice can be grounds for challenging the validity of the contract.

The enforceability provisions apply to both the initial domestic contract and any changes a couple makes to it later.

Consider writing a prenup or marriage

When you are engaged and planning your future, it can be difficult to contemplate what happens if the relationship ends. Drafting a prenup or marriage contract can provide peace of mind if the relationship does end. It can provide you with certainty and assurances that your most valued possessions will be protected and that parties will be taken care of financially. A marriage contract is always much less expensive than a lengthy court battle.

For advice and guidance drafting a Prenup or Marriage Contract, contact the family lawyers at Bortolussi Family Law in Vaughan

If you have any questions about drafting a prenup or marriage contract, contact Bortolussi Family Law at 416-987-3300 or online. Our knowledgeable family lawyers are ready to help you negotiate a marriage contract and advise you on your rights.

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