33 - The Law of Marriage Contracts and Cohabitation Agreements

Ontario Family Law Podcast - Episode 23 - The Law of Marriage Contracts and Cohabitation Agreements

33 - The Law of Marriage Contracts & Cohabitation Agreements

Family law can cause consequences to relationships that couples may not have contemplated. Marriage contracts (which are called prenuptial agreements in some US states) and cohabitation agreements can prevent common family law problems and are much more common than many people would suspect.  These agreements can take people out of the usual procedures for addressing legal issues during and after a marriage and avoid a lot of the controversial issues that cause fights and even long battles after separation.  But to have such an agreement hold up, and protect you and your family and also avoid difficult litigation in the event of a separation.  You have to follow the law that governs making marriage contracts and cohabitation agreements. 

What is a Marriage Contract? What is a Cohabitation Agreement?
•  Marriage Contracts are agreements made between two people who intend to marry or who are already married to each other.
•  Cohabitation Agreements are agreements made between two people who are cohabiting, or intend to cohabit and who are not married to each other.

In his episode of the podcast, family lawyer, Julie Tyas, gives a straightforward and easy to understand explanation of the law of marriage contracts and cohabitation agreements.  

What is the Effect of Marriage on Cohabitation Agreements?
•  Cohabitation Agreements automatically become Marriage Contracts if the parties marry.
•  We therefore ensure that if marriage is a possibility for one of our clients entering into a Cohabitation Agreement, that all clauses relevant to married couples are also included.Purpose of Marriage Contracts and Cohabitation Agreements
•  Both types of domestic contracts govern the parties’ rights and obligations under the marriage or cohabitation, upon separation, annulment or dissolution of the marriage (or cessation of cohabitation), or upon death.
•  Opt out (of some, but not all) of the laws that would normally apply with respect to division of property, spousal support and many others that may arise on separation.

This episode is an enhanced podcast on iTunes, and slides to accompany what Julie is saying will appear on the screen of your iPhone, iPad, iPod, or computer as you listen to the podcast. To get to this Podcast on iTunes, click on the Ontario Family Law Podcast logo above.  The MP3 version, which is at the left, does not have those slides, but you see them to the right of the text on this page.

1. Ownership in or Division of Property
•  Exclude certain assets or liabilities from equalization or opt out of the equalization process altogether (common in cases where one or both parties have entered into the relationship with assets they want to protect).
•  Who will own what – during the relationship and on separation.
•  Process for how and when property will be transferred or sold
following a separation.2. Support Obligations
Spousal Support
•  Who will pay and how much – during the relationship or on separation.
•  Spousal Support release – Miglin v. Miglin
•  Be fair! Release may be inappropriate if the parties intend to or already have children. Child Support
•  Only if the agreement is reasonable having regard to the Child Support Guidelines.

People who work out a marriage contract before the wedding have given what marriage means more serious thought and go into the relationship and obligations knowing what they are getting into.  Because they have done that, the foundation of the marriage is stronger and separation and using the marriage contract is less likely.  Marriage contracts or cohabitation agreements have saved many relationships by addressing and removing issues that have caused the couple stress.

This podcast is essential listening for anyone getting married or considering moving in with someone. 

3. The Right to Direct the Education or Moral Training of the Children
•  Must not deal with any rights to custody of or access to children.
•  “Best interests of the child” test prevails, if challenged.4. Any Other Matter
•  Provided they are not terms which are the parties are not permitted to contract out of!
–  Address custody or access arrangements.
–  Restrict either party’s right to remain in the matrimonial home on
–  Authorize one spouse to sell, mortgage or encumber a matrimonial
home before the spouses are divorced.

The host of the Ontario Family Law PodcastJohn Schuman, is a Certified Specialist in Family Law and Divorce Trial Lawyer, mediator, arbitrator and collaborative lawyer, practicing in Toronto at Devry Smith Frank LLP, which is a full service law firm with several excellent lawyers in family law.  If you would like to contact John Schuman, either call 416-446-5847, email him or fill out form below and click “send.”  We respond promptly whenever someone contacts us.  

4. Any Other Matter... continued
–  Contain provisions for child support that benefit the child less than the Child Support Guidelines.
–  Require the parties to resolve issues arising from the breakdown of the relationship by way of arbitration.
–  Result in spousal support payments that are tax deductible for the
payor and taxable to the recipient while the parties are still living at
the same residence

Setting Aside Domestic Contracts
•  A party failed to disclose to the other significant assets or debts at the time the contract was made.
•  A party did not understand the nature or consequences of the contract (i.e. each party did not have independent legal advice).Setting Aside Domestic Contracts... continued
•  In accordance with the law of contract:
–  Duress, undue influence, fraud, unconscionability (where the terms are so one-sided in one party’s favour), fundamental breach, other equitable grounds (i.e. unequal bargaining power, material misrepresentation, etc.).

Thousands of people tune into the  Ontario Family Law Podcast every month to get valuable pointers on family law, marriage, divorce and separation issues that can save them thousands of dollars.  It is also available on iTunes.  The Ontario Family Law Podcast is a companion to this easy-to-understand book on the Basics of Ontario Family Law, which is also available for immediate download as a $9.99 ebook from Amazon (Canada) and Kobo or as and iBook for iPad, iPhone or Mac.  For a more comprehensive explanation of family law issues, a guide to Ontario’s Family Courts and all the alternatives to court such as mediation, arbitration and collaborative practice, download a copy, order a paper copy from Amazon, or request it at your favourite bookstore or library.

Timing of Negotiations
•  Not ideal to begin negotiating terms of a Marriage Contract within two months of the wedding date – the focus is on the wedding, not on the legal contract!
–  Duress, undue influence, pressure to sign the contract to avoid cancelling the wedding.
•  Can sign Marriage Contracts after the wedding.
•  Stand-Still Agreement (preserves “unmarried” status upon marriage until the Marriage Contract is finalized; usually expires a few months after marriage to allow the parties time to properly negotiate the contract).We Changed our Minds!
•  Intention to abandon the contract must be clearly set out in writing, signed by both parties, dated, and witnessed.
•  If the parties ignore the terms of the agreement, or do things contrary to it, during the course of their relationship, this should not invalidate the agreement.

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