Complete trust in your loved one and a certain degree of spontaneity are important ingredients for a healthy long term relationship, but couples can decide to reinforce it with the help of a domestic contract.
What types of Domestic Contracts are there?
Cohabitation Agreements, Marriage Contracts and Separation Agreements are different types of domestic contracts. Couples use them to set out certain terms for their relationship, and to agree on the rights and responsibilities in case the relationship ends.
You and your partner can enter into a Cohabitation Agreement before or after you move in together.
What can a Cohabitation Agreement set out?
A Cohabitation Agreement can set out:
- how you want to organize some things in your relationship (e.g. keeping your finances separate).
- how property will be divided upon breakdown of the relationship;
- who owns property purchased during cohabitation;
- how much support will be paid if relationship ends;
A Cohabitation Agreement cannot set out:
- rules about custody and access for your children, which can only be decided after you and your partner separate.
What if I marry and I signed a Cohabitation Agreement?
If you and your partner get married after you have been living together, your Cohabitation Agreement becomes a Marriage Contract.
A Marriage Contract is a domestic contract for married couples. For couples who are planning to marry it’s known as Prenuptial Agreement (Prenup), while for married couples it’s known as Postnuptial Agreement (Postnup).
What can a Marriage Contract set out?
A Marriage Contract can set out:
- protection of pre-marriage assets and debts incurred by your spouse;
- children’s education and upbringing;
- control over budget and bank accounts;
- support obligations and variations of spousal support;
- pensions and RRSPs;
- equalization and division of property, including the matrimonial home.
! Be cautious when you include your home and property in a Marriage Contract. You could give up rights that you have under the law. It is important to talk to a family law lawyer who can explain your legal rights and options.
A Marriage Contract cannot set out:
- rules about custody and access to children.
- limits to spouses’ rights to live in matrimonial home.
! You and your spouse have equal right to live in your matrimonial home; it doesn’t matter whose name is on the house’s title.
What rights do I have under the law?
According to the law, married spouses who are separating have the right to equally share any increase in the value of their property that builds up during the marriage. The law sets out a calculation to determine what each spouse can legally get, called “equalization.” There are also rules about sharing the value of the matrimonial home, the home where you and your spouse were living as a family at the time of your separation.
You can sign a Separation Agreement to decide on different issues when you and your partner decide to separate. You can execute a Separation Agreement if you were married or if you lived in a common law relationship.
What can a Separation Agreement set out:
- rules about custody and access for children,
- financial support e.g. child support or spousal support, and
- how property will be divided.
Advantages of Negotiated Separation Agreement vs. Court Order Separation Agreement:
- Negotiating a Separation Agreement is cheaper, quicker and less stressful than going to court;
- You and your partner can control what is in your agreement;
- You and your partner may be more likely to follow the negotiated agreement because you decided together its content.
Disadvantages of Negotiated Separation Agreement
- If you are in an abusive or bullying relationship, it can be very difficult to reach a fair result and have respectful negotiations with your ex-partner. In abusive or bullying relationships, it is safer to go to Court for an Order.
- Going to Court to decide these legal issues may also help you protect your legal rights.
Can Domestic Contracts Be Enforced?
You can file your domestic contract with court, and it can be enforced as a court order, including any agreements about child and spousal support payments.
Why do I need to enforce my Domestic Contract?
You should enforce your contract in case there is a problem in the future or your partner stops following the agreement.
Does the court review my contract?
No. Court will not review your contract. Court reviews a contract only if one of the spouses challenges it. Generally, courts enforce domestic contracts.
! You should get legal advice before you execute a domestic contract. You must understand what is included in your contract, how your rights in the contract are different from your rights under the law.
How can I challenge the contract?
If you want to challenge your domestic contract, you have to apply to court.
! Courts do not like to interfere with domestic contracts and will not change a domestic contract just because it gives you less than what would you legally get.
When can I successfully challenge the contract in Court?
Court doesn’t usually change the division of the property in a domestic contract. However, court may change the spousal support sections if your situation is worse than at the time the contract was signed.
There are other cases when the contract can be set aside, but it is advisable to obtain legal advice to understand if your situation would qualify, and what might be the possible outcomes.
At Beffa Law we can help you:
- negotiate and draft cohabitation, marriage (prenuptial or postnuptial), or separation agreements;
- review and enforce pre-existing agreements;
- ensure the agreement is drafted in such way as to be legally binding;
- Independent Legal advice (ILA) for any domestic contracts.
Contact us today to learn how a marriage contract drawn up by experienced family lawyers can help protect your rights and assets upon separation. Call us at (416) 856-7631 to arrange for a confidential initial consultation.