When Ontario couples marry, they often choose to draft a marriage contract to avoid the default determination of property and other rights as accorded by provincial law.
Retaining a family lawyer to construct a contract that includes both parties’ preferences leaves the control in the hands of the spouses, as opposed to the courts. As with most legalities, however, there are exceptions. As such, both spouses must abide by those provisions in the Family Law Act that determine who will remain in temporary possession of the former marital home. Additionally, neither spouse has the right to dictate in a marriage contract the eventual access and custody of present or future children, including most issues of child support.
Yet these marital contracts allow couples to plan for inheritance and wealth protection in the event of a later divorce. Certain assets can be sequestered and later become the property of heirs and beneficiaries instead of being divided during a split.
Some marriage contracts focus narrowly only on specific issues; others are far broader in their scope. An example of a marriage contract with a narrow focus could be one that deals with a house that was previously purchased by only one of the parties, but that becomes the marital domicile during the marriage.
Ontario law permits the courts to nullify marriage contracts entirely and invalidate specific provisions if:
— A spouse didn’t comprehend the marriage contract’s consequences;
— Either spouse signed the contract fraudulently, by mistake or under undue influence; or
— A spouse failed to disclose income or assets.
If the courts consider the provisions outlined for spousal support to be unconscionable, they can also refuse to honour the contract.
Source: Advisor.ca, “Marriage Contracts Protect Assets,” Margaret O’Sullivan, accessed April 14, 2016