Marriage Agreements

From Clicklaw Wikibooks

Marriage agreements are contracts signed by couples either before they marry or shortly afterwards. Most marriage agreements are drafted and signed well ahead of the date of marriage, and that kind of timing is usually a very good idea. Marriage agreements are usually intended to deal with the legal issues if the marriage breaks down, but they can also deal with how day-to-day things will be handled during the marriage.

This section discusses when and why marriage agreements are usually entered into, the legal requirements of a valid marriage agreement, and the possible subjects of a marriage agreement.

Entering into a marriage agreement

While a couple might enter into a marriage agreement with the intention of addressing things that could happen during the course of their marriage, more typically these agreements are intended to address the issues that will arise if the marriage breaks down. Marriage agreements are binding on the parties as a legal contract. They may be enforced by the courts if someone tries to escape or change an obligation they have agreed to.

Most couples who marry do not have a marriage agreement. There is no legal requirement that you must enter into such an agreement if you're getting married. You cannot be forced into a marriage agreement.

When a marriage agreement is a good idea

Marriage agreements are usually appropriate when:

  • one or both of the parties have a substantial amount of property going into the marriage,
  • one of the parties expects to acquire substantial property during the marriage, through, for example, a business, an inheritance, a settlement or court award, or a gift,
  • the parties want to avoid some of the stress and anger that can come after separation by deciding in advance how certain difficult issues, like the division of family property and family debt, will be dealt with,
  • one or both of the parties experienced an ugly court battle leaving a previous relationship,
  • one or both of the parties will be bringing children from a previous relationship into the marriage, or
  • one of the parties is entering the marriage with substantial debt.

In most cases, people generally want to protect the property that they're bringing into the marriage and avoid the scheme for dividing property and debt set out in the provincial Family Law Act; many people are looking for an "I'll keep what's mine, you'll keep what's yours" sort of deal, and that — or any other reasonable kind of arrangement — is precisely what you can get with a marriage agreement.

When a marriage agreement might be a bad idea

A marriage agreement may not be appropriate when:

  • neither party has significant property,
  • neither party has significant debts,
  • both parties are relatively young and intend the marriage to be permanent, and
  • neither party is bringing any children into the marriage from another relationship.

In circumstances like that, there really isn't much point to having a marriage agreement. There aren't any kids to worry about and neither party has any assets to protect going into the marriage. What purpose would a marriage agreement serve?

As well, the Family Law Act also says that an agreement made before the parties have separated cannot deal with:

  1. parental responsibilities and parenting time, or
  2. child support.

Marriage agreements are odd things anyway as they tend to lend a unpleasant and sometimes petty financial dimension to what ought to be a joyous occasion. If there's no good reason to have a marriage agreement, don't have a marriage agreement.

Negotiating a marriage agreement

If a marriage agreement is appropriate and desirable, the people involved will negotiate the terms of the agreement and one or both of the parties will draft a written agreement. As with all family law agreements, it is important that both parties make complete financial disclosure and get independent legal advice about what exactly the agreement means, how it affects their present rights and responsibilities towards one another, and how it will impact on those rights and responsibilities if the marriage comes to an end. Getting independent legal advice makes the agreement harder to change later on by preventing one spouse from saying "I didn't know what it meant" or "she had the lawyer, not me."

Remember what s. 93(3) of the Family Law Act says about the test to set aside agreements for the division of property and debt (the same principles apply to agreements about spousal support under s. 164(3)):

(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement ... only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;

(b) a spouse took improper advantage of the other spouse's vulnerability, including the other spouse's ignorance, need or distress;

(c) a spouse did not understand the nature or consequences of the agreement;

(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.

Marriage agreements should be signed well in advance of the marriage ceremony. If an agreement is being negotiated on the brink of the wedding, the court may be concerned about the fairness of the circumstances in which the agreement was negotiated and made. The emotional stress involved in arranging and potentially cancelling the wedding might be found to mean that someone was coerced into signing the agreement.

On the other hand, there's nothing wrong with signing a marriage agreement after the ceremony, except that the spouse who wants the agreement loses a fair bit of bargaining power once the wedding is done.

Avoid do-it-yourself marriage agreement kits

Staples, Chapters, London Drugs and other stores generally carry a wide range of DIY legal products, from doing your own will to getting your own divorce.

In my view most of these do-it-yourself kits are fine for most people most of the time. They are not fine for marriage agreements. Marriage agreements can be terribly complicated, more so than separation agreements, and must be drafted with a good knowledge of family law in general and marriage agreements in particular. Using a do-it-yourself marriage agreement kit is really not a good strategy.

If you figure that you absolutely must have a marriage agreement, it's well worth spending $1,500 to $4,000 to have a lawyer draw it up correctly for you, rather than spending $15,000 to $40,000 on lawyer's fees down the road if the agreement is flawed.

Legal and formal requirements of a marriage agreement

The point of entering into a marriage agreement is so that, at some later time, the contract will be enforceable in court if the parties fail to live up to it. As such, a marriage agreement, just like any other family law agreement, must conform to certain basic rules, including the following:

  • A marriage agreement must be in writing.
  • The agreement must be signed by each party, and should be signed in the presence of a witness. Although an agreement made without a witness can still be valid and binding, it is a very good idea to have a witness (or witnesses) because she (or they) can confirm that the parties signed the agreement. In addition, sections 94 and 165 of the Family Law Act provide that a court cannot make an order about division of property and debt or spousal support that has been dealt with in a written, witnessed agreement between the parties unless the court has set aside the agreement.
  • Neither party should be under a legal disability when they sign the agreement, however children who are parents or spouses may enter into a binding agreement.
  • The agreement must clearly identify the parties and the nature of their rights and obligations to one another.

In addition to these simple formalities of a proper family law agreement, you might want to think about certain other principles of contract law such as these:

  • The parties must each enter into the agreement of their own free will, without any coercion or duress by the other party, or by anyone else for that matter.
  • Both parties must make full and complete disclosure of their circumstances going into the agreement. This disclosure should include complete information about the parties' assets and debts, as well as information about the values of the assets and amounts owing on the debts.
  • The parties cannot make an illegal bargain, that is, they can't make an agreement that obliges them to do something against the law.
  • Where an agreement is prepared by one party's lawyer and the other party doesn't have a lawyer, any portions of the agreement that are vague may be interpreted in favour of the party who didn't have the lawyer.
  • The court will attempt to give effect to a contract wherever possible, that is, they will attempt to give meaning to the terms of a contract rather than declare it void.
  • If a term of a marriage agreement is found to be invalid, only the invalid part of the agreement will stop being in effect. The remainder of the agreement will continue to be valid and binding on the parties.

Aside from these considerations, it is also important to remember that marriage agreements are usually only meant to be used at some unknown time in the future. While separation agreements are intended to work immediately from the moment they are signed, marriage agreements usually aren't intended to work until some later time, usually upon the spouses' separation. As a result, it can be difficult to guess what each party's situation will be like when the agreement begins to operate and guess whether it will still be appropriate and fair. Because of these problems, hiring the services of a lawyer to prepare a marriage agreement is highly recommended.

The possible subjects of a marriage agreement

A marriage agreement can address any number of subjects, and deal with anything that's a concern to one or both spouses. Typical subjects include the following:

  • How will the spouses own property during the marriage, separately or jointly?
  • How will the spouses divide their property and debts after the marriage? Will there be any division of property at all?
  • Will the spouses share in the value or cost of property bought during the marriage, like a car or a house?
  • Will the parties have a share in any excluded property brought into the marriage by one of the spouses?
  • How will unexpected windfalls like inheritances and lottery wins be dealt with? Will they be shared or kept separate?
  • How will the spouses deal with their residence and/or jointly owned property if one of the spouses dies during the relationship?
  • How will household chores be shared during the marriage?
  • How will household expenses be paid for during the marriage? Will both spouses contribute to the bills? Will the bills be divided between them?
  • How will the spouses manage retirement savings during the marriage?
  • How will the children brought into the marriage from another relationship be dealt with during the marriage? Will any responsibilities survive separation?
  • How will children born during the marriage be cared for after separation?

Except for the restrictions on agreements about parental responsibilities, parenting time, and child support, the possible subjects of a marriage agreement are limited only by your imagination, common sense, and the law of contracts. I've seen some fairly unique marriage agreements over the years, including agreements, likely unenforceable, that talk about the frequency of sex and who will take out the garbage.

However, as a general rule of thumb, it's best to deal with the concrete things that exist at the time of the marriage (such as children from a previous relationship, existing debts, and existing property) and things that the couple can reasonably expect to happen during the marriage in the short term (such as receiving an inheritance or a court award). Dealing with things that might happen (like new children, a move to a new town, or lottery winnings) is really speculative, and it's almost impossible to know how they should be dealt with if, at some unknown point in the future, the marriage comes to an end.

Resources and links

Legislation

Links


This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Beatrice McCutcheon, February 22, 2017.


Creativecommonssmall.png JP Boyd on Family Law © John-Paul Boyd and Courthouse Libraries BC is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.
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