Marriage Agreements

A marriage agreement is a contact entered into either before marriage or shortly afterwards. Most marriage agreements are drafted and signed well ahead of the date of marriage. Marriage agreements are usually intended to deal with the legal issues that will arise if the marriage breaks down but they can also deal with how day-to-day issues will be handled during the marriage.

This page will discuss 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

A couple may enter into a marriage agreement with the intention of addressing things that might happen during the course of their marriage, but, more typically, they are intended to address the issues that will arise when the marriage breaks down. Marriage agreements are binding on the parties as a legal contract and will usually be enforced by the courts.

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 and 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 or assets going into the marriage; one of the parties expects to acquire substantial assets 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 assets, will be dealt with; one or both of the parties has been married before and experienced an ugly court battle; 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 Family Relations Act's presumption that all assets ought to be split equally between spouses when their marriage comes to an end; many people are looking for an "I'll keep what's mine, you'll keep what's yours" sort of deal.

The odd thing about this is that the court may make an order dividing assets that's different than what a marriage agreement calls for if the agreement is found to be unfair under s. 65 of the Family Relations Act. As a result, a good marriage agreement will allow a spouse to "earn" an increasing share of the other spouse's property as time goes by to give the contract the best chance of remaining fair from the point of view of the act. In many marriage agreements, a spouse will earn an equal or near-equal share of the assets by the fifteenth, twentieth or twenty-fifth year of marriage. In fact, most people don't wind up with an "I'll keep what's mine, you'll keep what's yours" deal after all.

When a Marriage Agreement is a Bad Idea

A marriage agreement may not be appropriate when:

neither party has any significant assets; neither party has any 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 of a point to executing 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?

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 circumstance. 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 parties will negotiate the terms of the agreement, and one or both of the parties will draft a written agreement for review and maybe execution. As with all family law agreements, it is important that both parties 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 affect 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" and challenging the agreement later on.

Marriage agreements should be entered into 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 executed. The emotional stress involved in arranging the wedding may be found to mean, for example, that a party was effectively coerced into signing the agreement. Are you going to tell everyone to go home because your spouse is insisting that you sign a contract you disagree with?

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

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. I really encourage you to avoid do-it-yourself marriage agreement kits.

If you figure that you absolutely must have a marriage agreement, it's well worth $1,500 to $4,000 to pay a lawyer to draw it up correctly for you now, 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 spouses will be required to abide by its terms and, if they don't, then the contract will be enforceable in court. 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 set out in writing. The agreement must be signed by each party, preferably in the presence of a witness. Neither party can be under the age of majority (unless the minor has the capacity to marry and the permission of the court to enter into the marriage agreement), or suffer from any other legal disability. The agreement must clearly identify the parties and the nature of their rights and obligations to one another. Section 61 of the Family Relations Act defines "marriage agreement" for the purposes of Parts 5 and 6 of the act which deal with the division of property:

(2) A marriage agreement is an agreement entered into by a man and a woman before or during their marriage to each other to take effect on the date of their marriage or on the execution of the agreement, whichever is later, for (a) management of family assets or other property during marriage, or (b) ownership in, or division of, family assets or other property during marriage, or on the making of an order for dissolution of marriage, judicial separation or a declaration of nullity of marriage. (3) A marriage agreement ... must be in writing, signed by bouth spouses, and witnessed by one or more other persons. This definition is only relevant if one of the spouses later makes a claim for a division of assets under the Family Relations Act and challenges the status of the marriage agreement. A proper marriage agreement doesn't have to deal with assets at all of course, but can instead just talk about issues like the care and control of children, spousal support, the division of labour during the marriage and so forth.

Don't worry about the gender requirement of s. 61(2); it is plainly unconstitutional and will be set aside if challenged.

In addition to complying with the basic formalities of a proper family law agreement (that the agreement be signed, that it be in writing and so on), certain principles of contract law should also be considered, including the following:

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... like a prospective in-law. The parties cannot make an illegal bargain, that is, they can't form an agreement which obliges them to do something illegal or is otherwise against the law. Where an agreement is prepared by one spouse's lawyer and the other spouse doesn't have a lawyer, any parts that are vague may be interpreted in favour of the spouse who didn't have the lawyer. The court will attempt to give effect to a contract wherever possible, that is, it will attempt to give meaning to the terms of a contract rather than declare it to be void. If a term of a marriage agreement is found to be invalid, only the invalid part of the agreement will fail. 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 extremely difficult to guess what each party's situation will be like at that future date and decide whether the agreement will still be appropriate, fair and relevant. Because of these problems, hiring the services of a lawyer to prepare the agreement is highly recommended. Crafting a solid marriage agreement can be a tricky business.

Finally, you should also know that the courts will rarely — if ever — uphold an agreement which attempts to avoid and "contract out" of a statutory obligation. Child support, for example, is a positive, almost absolute obligation a parent has towards his or her children. A court is not likely to allow an agreement to stand which provides that a parent will never have to pay child support.

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 assets during the marriage? How will the spouses divide their property after the marriage? Will there be any division of property at all? Will the spouse without the assets receive a fixed share, or a share that increases as time goes on? Will the spouses share in the value or cost of assets bought during the marriage, like a car or a house? Will the parties have a share in assets 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 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? Despite the provisions of s. 61(2) of the Family Relations Act, referred to above, the possible subjects of a marriage agreement are limited only by imagination, common sense and the law of contracts, and I've seen some fairly unique marriage agreements from time to time, including agreements, likely unenforceable, which talk about the frequency of sex and who will take out the garbage.

As a general rule of thumb, however, 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 assets) and things that the couple 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

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