Hello, my name is Veronica Yeung and I am associate at the Feldstein Family Law Group.
I am here to discuss Marriage Contracts, AKA “prenuptial agreements” or “pre-nups” and how having such a contract may impact your divorce of separation.
Where separating spouses can enter into a Separation Agreement after they have separated to deal with their rights and obligations upon separation, a marriage contract can be entered into either before the marriage or during the marriage.
A marriage contract is a written agreement between married spouses or people intending to marry. Marriage contracts are limited to addressing the following issues:
- Ownership and division of property;
- Child Support;
- Spousal Support; and
- The right to direct the education and moral upbringing of children.
It is also important to know that there are limitations as to what issues parties can deal with in a Marriage Contract. Generally, if the issue is not related to one of the four issues above, it is likely not an issue that can be addressed in a Marriage Contract.
More specifically, the law is clear that the following issues cannot be addressed in a Marriage Contract:
- Custody and Access; and
- Possession of the Matrimonial Home.
With respect to custody and access, this means that spouses cannot pre-determine in a marriage contract issues such as which parent gets custody, the children’s living arrangements, or the parenting schedule upon separation. Any terms regarding parenting in a Marriage Contract must be limited to how the children are raised (i.e. religion and education) but not which parent will make decisions about raising them.
With respect to possession of the matrimonial home, this means that parties cannot agree to limit their special rights under the Family Law Act to equal possession of the matrimonial home. For example, the Marriage Contract cannot contain a clause saying that upon separation, the husband must move out of the matrimonial home while the wife stays in the home.
Where a Marriage Contract contains provisions dealing with prohibited issues as discussed above, these specific provisions would not be enforceable and would be considered void. Depending on the circumstances, the balance of the Marriage Contract may still be enforceable.
Prior to negotiating, drafting, and entering into a Marriage Contract, both parties should exchange full and frank financial disclosure about their income, assets, and liabilities.
Failure of the parties to exchange financial disclosure or a failure to disclosure income, assets, and liabilities leaves a Marriage Contract at risk of being set aside in the future pursuant to Section 56(4) of the Family Law Act.
Full and frank financial disclosure about each party’s financial circumstances at the time of the contract is crucial and necessary to ensure that both parties understand the financial consequences of the contract that they are entering into. If there is evidence that a party did not understand the nature or consequences of the contract they entered into, the Marriage Contract maybe set aside.
The Marriage Contract may also be set aside a later date for different types of inadequacies at the time of entering into the contract such as undue influence or duress upon one of the parties.
The court also has discretion to set aside support provisions or a waiver of support in a Marriage Contract if the court finds that the provision or waiver results in unconscionable circumstances after separation.
It is not uncommon for parties with a marriage contract to try and have them set aside after they separate on the basis that the specific clauses or terms are ambiguous or they did not understand the consequences of the contract when they signed it. In such circumstances, the courts will try to interpret or determine what the parties’ intention was at the time the Marriage Contract was signed.
If you have concerns as to whether your marriage contract is unfair or whether you may be entitled to more than what is provided for in your marriage contract upon separation, I strongly recommend that you consult a family law lawyer.
If you require more information regarding the impact of a marriage contract on your separation or divorce, please visit our website at www.separation.ca or call us at 905-581-7222 to schedule a free initial in-office consultation with one of our lawyers.
Thank you for watching.