Prenuptial Agreements: What You Should Know

prenuptuals

So you’re thinking about drafting a prenuptial agreement, or a ‘marriage contract’. Perhaps you’re wondering what sorts of issues the contract can address, and what will not be enforced by the courts. This blog post seeks to tell you a few things you should know. How do you make a Prenuptial Agreement or Marriage Contract?


First things first – making the contract. Section 55(1) of the Family Law Act is exceptionally clear about creating a marriage contract. “A domestic contract and an agreement to amend or rescind a domestic contract are unenforceable unless made in writing, signed by the parties and witnessed.” If you and your spouse are discussing an agreement and shake on it, it will not be enforced by courts. If you and your spouse write an agreement but do not sign it, it will not be enforced by the courts. And finally, unless your written and signed agreement is witnessed by a third party, it will not be enforced by the courts. When can a Prenuptial Agreement or Marriage Contract be set aside?


 

There are also grounds under which the courts will set aside properly made domestic contracts. The court has the authority to set aside either an entire contract or any section within one. Section 56(4) of the Family Law Act addresses the grounds upon which courts will do so. For instance, if you do not disclose all of your assets, debts, and liabilities to your spouse when the agreement is made, it can be set aside. To avoid this, it is important to make full and accurate financial disclosure; ideally by completing a Financial Statement which includes the estimated value of your assets.


 

If you or your spouse do not understand the nature or consequences of the marriage contract, it can be set aside. Most people do not fully understand all of their rights and obligations under family law. It is therefore common for spouses to misunderstand the nature or consequences of a marriage contract. If you intend to create an enforceable contract, it is extremely important that both you and your spouse retain family law lawyers to provide you with independent legal advice and to fully explain all of the consequences of signing a marriage contract.


 

If the marriage contract in any other way violates a rule of contract law, it can be set aside. You cannot be coerced into signing a contract. Unless you commit yourself to the contract consensually and free from coercion, it will not be enforced by the courts. Coercion or duress violate contract law and are therefore grounds for setting aside a marriage contract.


What can you put in a Prenuptial Agreement or Marriage Contract?  

What sort of issues can a marriage contract deal with? Section 52(1) of the Family Law Act addresses the content of marriage contracts. In general terms, a marriage contract can address anything to settle the affairs of separated spouses – but this general clause has limits. More specifically, a marriage contract can outline how property will be divided or owned after separation or divorce. A marriage contract can address what the support obligations will be post-separation. It must be remembered that when it comes to children, courts make decisions based on the best interests of the child. Therefore, as Section 56(1) of the Family Law Act states, the court can ignore any provision of a marriage contract if doing so is in the best interests of the child.


 

There are several aspects of separation that a marriage contract cannot address. For example, any provisions in a marriage contract outlining the rights to custody of or access to children is unenforceable. Any provision in a marriage contract which limits a spouse’s possessory rights to the matrimonial home is similarly unenforceable.


Finally, as mentioned earlier, a marriage contract can address what the support obligations will be post-separation. Does this mean spousal support or child support? It can be both. However, as Section 56(1.1) of the Family Law Act states, the courts can ignore any provisions of a marriage contract which deals with child support if “the provisions is unreasonable having regard to the child support guidelines.” In other words, if you make one million dollars a year, and you and your spouse agree that child support should be $50 per month, the courts will likely ignore that provision because it flies in the face of what the child support guidelines demand.


 

Hopefully this post has shed some light on the nature of marriage contracts. They can be very useful, but they must be extremely clear, and both you and your spouse must completely understand what you are getting yourselves into.


 

The above information is not legal advice of any kind, and you should be sure to speak to a qualified family law lawyer about your specific situation. For more information, call us at 905-273-4588 or email us at contact@kainfamilylaw.com to book a free 30 minute consultation with one of our experienced family law lawyers.


 
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