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Benefits of a Marriage Contract

A marriage contract in Canada could mean two things. First, it is a prenuptial agreement which is a contract entered into in contemplation of marriage. Second, it is a postnuptial agreement. This is entered into after the parties have married.         

In Canada, marriage creates an economic partnership. Any asset acquired during the marriage will be divided between the husband and the wife should they decide to separate and divorce, unless they agree otherwise in a marriage contract.

There are a lot of things a marriage contract can benefit the couple before or after entering into marriage. Apart from the fact that it allows couples to opt out of provincial law with respect to property, there are more things a marriage contract offers that are beneficial for the couples.      

A Marriage Contract Provides Protection of Individual Assets 

A marriage contract can be drafted to protect specific assets like family-owned businesses and properties, pensions, and real estate. The contract will keep such properties intact even if the marriage ends.     

The Family Law Act establishes the grounds of the marriage contract that allows parties to agree on the property division. The law states that a spouse can claim interest in all of their partner’s  property acquired during the extent of their marriage when there is no marriage contract involved. 

The marriage contract provides a level of certainty and peace of mind in knowing how property is to be dealt with if the relationship ends or a spouse dies. They can protect family heirlooms by keeping them out of “family property”. They often are used to help protect a family business.         

A Marriage Contract Can Prevent Possible Court Battles

Divorce proceedings can be tedious and complicated. It can be costly and have a negative impact on the emotional and mental health of the parties involved, especially the children.  

Marriage contracts can prevent this from happening. In addition, it can make the separation process smoother without requiring expensive litigation lawyers and complicated legal proceedings.           

The couple should draft their estate plans so that they conform to the terms in the prenuptial agreement.  This is to ensure that no one forces your children or your surviving spouse to be involved in litigation regarding your estate. In addition, the costs would result in everyone getting significantly less.

A Marriage Contract Arranges for Financial Support

A marriage contract can make arrangements for financial support should the couple decide to end their marriage. This will give both spouses peace of mind knowing that there will be adequate spousal or child support if the relationship ends. The agreement is best done while the couple is still on friendly terms. 

Spousal support is also called “alimony” or “maintenance”. It is the amount of money that one spouse has to pay to the other spouse as financial support after a separation or divorce. It is usually paid every month, but it can also be paid as a lump sum. 

On the other hand, a spouse can also set a limit to the amount and duration of any support paid. The duration of spousal support is based on either the length of time the spouses lived together or their ages at the time of separation.

Requirements for a Legally Binding Marriage Contract A properly drafted and signed marriage contract is legally binding. For it to be executed as an official agreement, it should follow the four rules:
  • The agreement must be in writing.
  • It must be signed by both parties. 
  • The signatures must be witnessed.
  • There must be full disclosure and honesty in the negotiations leading up to signing of the contract.    
Alternatives to Marriage

Domestic Partnership
A domestic partnership is a formal legal relationship that is registered with the government. This type of relationship grants the couples the same rights and obligations that married couples have without getting married. This includes pension benefits and the ability to divide property or other assets at separation or death. 

Common Law Marriage 
Living common-law is defined by law as living with a person who is not their spouse, but whom they have a conjugal relationship for at least 12 continuous months, they are the parent of the spouse’s child by birth or adoption, or they have custody and control over the child.

Cohabitation Agreements
Cohabitation is defined as two people living together and has combined their affairs for at least one year. They set up their household together in one dwelling or house. The couple can enter into a contract called a cohabitation agreement stating how they will deal with issues while they are together or at the end of their relationship.  

Myths about Marriage Contracts   
  • Marriage contracts are only for the rich and famous.
  • A marriage contract can be prepared and signed before or after the marriage. The couple should know the consequences of the marriage itself to understand the full function of marriage contracts because this agreement is not only for the rich and famous. Anyone who is about to enter into marriage will benefit from signing a marriage contract.   
  • Marriage contracts aren’t binding.
  • Receiving a piece of legal advice is one of the key elements that reinforce the bindingness of a marriage contract. This will help prevent problems and issues from arising in the future. The marriage contract is binding when properly prepared. 
  • Marriage contracts are only for the people who are getting married.    
  • There are no laws implemented that protect couples who are cohabitating or living together or state how they will divide their properties should they decide to live in separate ways. Division of property can be a long and expensive argument. This draws the importance of every couple to sign for the marriage contract, even if they are not getting married and decide to live together. Marriage contracts are also available for common-law couples. 
  •  Lawyers are too expensive. 
  • Ensuring that the marriage contract is legal and binding, the safest choice is to hire a lawyer as they can make it bulletproof. It is best to have two lawyers, one for each spouse, to avoid conflict of interest. Advice from the lawyers is very crucial as it can make the marriage contract enforceable. 
  • Marriage contracts don’t apply to same-sex marriage.      
  • Same-sex couples also sign marriage contracts. The Supreme Court of Canada has ruled that same-sex couples are entitled to be treated the same way with the provincial family laws that common-law couples are treated. All the same rules that apply to common-law spouses now apply to same-sex couples in Canada.   

 

Know the benefits of a marriage contract before tying the knot with your significant other. Talk to a family law lawyer from Gelman & Associates now to know more.

 

Pro Tip

Signing a marriage contract is a good way to identify what’s best for each spouse. Contact Gelman & Associates to learn more about marriage contracts.

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FAQs on Marriage Contracts   

What laws must be followed in order to get married in Canada?  

Both the federal government and the provinces have some power over marriage. The federal government has two federal Acts dealing with marriage. First is the Marriage (Prohibited Degrees) Act, which prohibits people from marrying because they are too closely related by blood or adoption. The second Act is the Marriage for Civil Purposes Act which recognizes marriage between persons of the same sex. In Alberta, there is an Act called the Marriage Act which specifies the necessary things for legal marriages. 

What makes a marriage null and void?     

A marriage is null and void if (1) one or both spouses are seven years or younger, (2) the spouses were within the prohibited degree of relatedness, (3) one or both of the spouses do not have the mental capacity to marry, or (4) one or both of the spouses were already married at the time of the marriage.

I married someone who is a foreign citizen. Can my spouse automatically enter Canada?

No. There isn’t a special process for people who married Canadian citizens. Your spouse should meet several requirements and follow certain procedures to apply for citizenship. You can sponsor your partner to become a permanent resident if they don’t live in Canada.

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