A marital agreement is a type of domestic contract that married people create to govern aspects of their financial lives. A couple might enter a marital agreement before they marry, during their marriage, or when they decide to separate.
Although the Ontario Family Law Act directs how couples must divide their property when they separate or divorce, a couple could choose to do things differently if another method makes more sense for them. Courts will honor their decisions if each spouse voluntarily assents, the couple formalizes their agreement in writing, and each spouse has access to an independent legal professional.
A Kawartha Lakes marital agreements lawyer could help a couple negotiate a domestic contract that suits their unique needs and goals. Alternatively, a local family lawyer like Paul Riley could also advise a spouse about the legal and financial implications of an agreement another firm drafted.
An enforceable marital agreement must be in writing. Each partner must sign it in front of a witness. Courts do not uphold oral marital agreements or contracts that were not executed properly, meaning unsigned or unwitnessed.
A properly executed agreement is still subject to challenge. A marital agreement deals with some of the most intimate aspects of a person’s life and could impact their well-being forever. If a spouse seeks to set aside a marital agreement, a judge will scrutinize it before deciding whether to enforce it.
The possibility of undue influence or coercion always exists in a marital agreement because the signatories are intimate partners. Unequal power dynamics frequently exist in intimate relationships, and courts look for evidence both parties entered the agreement voluntarily.
A partner could challenge a contract on the grounds that their assent was not voluntary. A court might seek indicia of pressure to sign, such as presenting a prenuptial agreement a few days before the wedding date or threats to fight a party’s access to their children if they do not sign.
Consent to an agreement requires the signatory to comprehend its terms. If a spouse did not fully and accurately disclose their financial position, including future interests and debts, it would be impossible for the other spouse to comprehend the agreement’s effects. Similarly, if a spouse did not have an opportunity to get independent legal advice from a seasoned marital agreements lawyer in Kawartha Lakes, a court might assume they did not understand the contract’s implications. The Ontario Family Law Act s. 56(4) allows a court to set aside a martial agreement if the court suspects one spouse had an imperfect understanding of its contents.
A marital agreement need not treat both parties equally. Many couples enter marital agreements because an equal split would be unfair in their specific circumstances, and they wish to make an arrangement that could appear unequal to an outside observer.
Judges are mindful of this fact and are reluctant to set aside a marital agreement because of apparent unfairness. If each party provided full disclosure and each had access to an experienced Kawartha Lakes marital contracts lawyer, a court could allow a bad bargain to stand.
However, when a marital contract leaves one party in a sound financial position and the other facing hardship, a court might consider setting aside one or more provisions of the agreement. Similarly, if a spouse gave up significant rights and received nothing or very little in return, a court might void a marital agreement rather than enforce unfair terms.
Prenuptial, postnuptial, and separation agreements all set forth a couple’s decisions about aspects of their financial lives. Each could address property division issues and spousal support. Because each serves a slightly different purpose, some topics are best addressed in a specific form of marital agreement.
For example, a party cannot waive a right to the marital home in a prenuptial agreement or marriage contract. However, a prenup or marital agreement could address how the couple will handle any distortion home ownership causes to the equalization payment. For example, if one spouse owns a home at the time of marriage and the couple lives there until they separate, the home’s value on the separation date is attributed to the owning spouse. The couple could decide that the equalization payment should factor only the increase in the home’s value over the course of the marriage.
A separation agreement is the only marital contract that allows a spouse to release a possessory interest in the matrimonial home. A separation agreement also could address matters relating to child support and parenting time. However, a couple should be aware that a court must review any such provisions and may alter them if they believe it is in the children’s best interests.
Marital agreements allow a couple to retain control over their financial lives rather than submit to statutory one-size-fits-all property division rules if they separate. Marital contracts allow a couple to decide what is fair in their unique circumstances.
A Kawartha Lakes marital agreement lawyer like Paul Riley could help a couple draft an agreement or review and explain an agreement someone else prepared. Call anytime, 24/7, to speak with a knowledgeable professional at our firm.
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