Misconceptions about Marriage Contracts in Canada
Marriage agreements can be a contentious subject among couples. Some believe they are documents that only wealthy people sign to protect their assets. Others believe that someone who signs a marriage agreement is assuming the marriage will not last. Neither of these things are true.
In this article, we will discuss some misconceptions people have around marriage agreements, and how they may be beneficial. We will also explore the best way to approach creating a marriage agreement and how a lawyer can assist you.
Limits on marriage agreements
First, it is important to have a strong understanding of what can and cannot be included in a marriage agreement. Generally, a marriage agreement contains information concerned with the division of finances and spousal support if the marriage were to come to an end. Spouses can include any details they wish with regards to financial arrangements. A marriage agreement cannot, however, establish rules for child custody or child visitation rights.
Marriage Contacts are for people about to get married
This misconception stems from the term “prenup” which is often used interchangeably with marriage agreements. Though prenups are a form of marriage agreement, they are not the only form of a marriage agreement. Prenups—short for prenuptial agreement—literally means that the marriage agreement was signed before marriage. However, many such agreements are signed over during the marriage as well.
There is also a fair amount of misunderstanding about the legal responsibilities of common law couples. In BC, couples who have cohabitated for more than two years are considered married in the eyes of the law and both parties are treated as if they are legally married. This can cause a fair amount of stress when a common law relationship comes to an end, which may result in a long (and potentially expensive) argument that requires advice from lawyers. Signing a cohabitation agreement can resolve any financial disputes before they arise.
Marriage agreements do not necessarily have to be signed before the marriage. They can be signed after the marriage has taken place and they are available for common law couples too.
Only Wealthy People Need Marriage Agreements
To understand why marriage agreements can benefit all couples and not just the rich and famous, it helps to understand the purpose and freedom that these agreements provide. At their roots, a marriage agreement is simply an agreement signed between a couple that offers a custom set of rules for dividing property and assets should they separate.
In BC, the increase in value of all family property is divided equally upon relationship breakdown. That rule applies broadly, unless the couple signs a marriage agreement that prescribes a different set of rules when it comes to the division of assets. Essentially, a marriage agreement allows couples to design their own rules around separation, instead of following what has been laid out by the province. That is why all couples can benefit from a marriage agreement.
Mediators and marriage agreements
Spouses should each retain a lawyer to review the agreement. For the agreement to be binding, full disclosure must be made regarding financials and matters relevant to the agreement. Having a lawyer in the background during the drafting process ensures that the legal requirements are fully met.
Many couples find hiring a mediator or collaborative lawyer to be beneficial. The presence of a neutral third-party can help diffuse any frustrations or disagreements that may arise and keep the discussion on track. They can also ask questions to help couples understand what is important, both to themselves and their partner, when it comes to a marriage agreement.
Each party should retain their own lawyer before paperwork is signed.
Though they perhaps have a bad connotation, a marriage agreement or cohabitation agreement is an important document to sign. To learn more about how a lawyer can assist in the drafting and signing of an agreement, contact Cohen Buchan Edwards LLP.