In our previous blog post, we discussed the importance of ensuring your marriage contract is legal and binding in Canada. Some people might have questions about these contracts because they were considered against public policy until the 1980s. Now, these contracts are becoming more common and they are legally enforceable to a large degree.
There are specific points that can't be addressed in a marriage contract. One of these is child custody. All matters related to children will have to be resolved according to Canadian law. That means that you can't include anything that has to do with access to a child or child support in a marriage contract.
Interestingly, the marriage contract can include provisions about spousal support. This is one financial point that should be carefully considered by both parties because there isn't any guarantee about the state of the couple's finances if a divorce does occur. Another point to consider is that the agreement can't be unconscionable.
Another area that can't be included in a marriage contract is who will live in the marital home. Determinations regarding the home will be considered invalid if they are included in the contract. This can also include who has the right to sell the home or stipulations about transferring the home.
Knowing what to include and what to exclude in a marriage agreement can be difficult, especially when you have considerable assets. It can also be difficult if you have children from another marriage or other similar factors that must be considered when you are getting married. If you are presented with a marriage agreement, make sure that you fully understand its terms so that you know you are protected.
Source: Institute for Divorce Financial Analysts, "If you're thinking of taking the plunge a second time, you should consider whether you need the protection of a prenuptial agreement or marriage contract.," Nancy Kurn, CPA, CDFA®, JD, MBA, accessed Sep. 06, 2016