Many people want to make a written agreement about how they want to arrange parts of their life together, whether they are coupled or separated. More specifically, how they want to handle finances, property division and spousal support in the event of a separation. These types of agreements are called Domestic Contracts.
There are three types of agreements: i) “Cohabitation Agreement” an agreement made between common-law spouses ii) “Marriage Contract” (known to many individuals as a Prenuptial Agreement an agreement made between a married couple) and iii) “Separation Agreement” an agreement made upon separation. Each of these agreements covers a different kind of scenario, with the similarity being that they allow people to make their own arrangements for their relationship or the ending of the relationship.
More and more couples are deciding to live together without tying the knot. In such cases, entering into a Cohabitation Agreement may be a good idea. A Cohabitation Agreement is a legal agreement between a couple who have chosen to live together but remain unmarried.The purpose of the agreement is to specify each party’s rights and obligations as a result of their relationship and in the event of a future breakdown in the relationship.One benefit of setting out these rights and obligations is that you are more likely to avoid future disputes which often lead to protracted and expensive litigation in the event of the breakdown of the relationship. Ideally, they should be negotiated, drafted and signed well before your intended move in date. However, if for some reason this does not happen, don’t worry; one can be signed after you move in together.Cohabitation Agreements can deal with matters such as: rights to share in the others property, support obligations to each other, or entitlement to share in the other’s estate on death. If you eventually marry, a cohabitation agreement can turn into a marriage contract, and continue to be valid.
When it comes to property division, unmarried couples who live together are unable to rely on the law stating the value of property accumulated during the marriage must be equally divided found in Ontario’s Family Law Act. The property division sections of the Family Law Act in Ontario are limited to married spouses. Not all is lost though. Unmarried spouses can rely on the use of common law principles. These common law principles are discussed in the property division section of our website. We encourage you to visit the section to get a better understanding of property division options for unmarried couples.
Fortunately, common law partners are able to apply for spousal support (provided that they have been together for 3 years or have a child together, and are in a relationship of some permanence) and child support in the event their relationship breaks down.
We encourage you to visit the sections dealing with spousal support and child support of our website to get a better understanding of these issues for unmarried couples.
Marriage contracts are commonly referred to as Pre-nuptial Agreements or simply, “Pre-nups”.
Ideally, they should be negotiated, drafted and signed well before your intended date of marriage. The last thing you want to be thinking about just before your wedding is who gets what if we break up. However, for those of you who do not get around to getting one signed before the wedding, don’t worry; one can be signed after your wedding date.
Two people who intend on marrying can enter into a marriage contract in which they agree on their respective rights and obligations under the marriage or upon separation. The contract can deal with issues such as:
- ownership and division of property;
- support obligations; and
- the right to direct the education and moral training of their children,
The contract can detail things such as:
- what property and/or debts you are bringing into your marriage;
- how your personal property and your family property will be dealt with in the event of separation;
- what happens to your assets if you die; and
- spousal support.
The contract can NOT detail things such as:
- which parent would have custody of and access to any children they have or may have in the future; and
- limiting of either of their rights for possession of the Matrimonial Home.
A Separation Agreement is a legal agreement made between separating spouses, or common law partners, in an effort to resolve property, support, or parenting issues.Due to the fact that these issues can be quite complicated, they can have a major and long-term impact on your rights and obligations. Therefore, consulting with a lawyer to assist with the drafting and review of the Agreement is a wise idea.Separating spouses can use the same lawyer to draft the Agreement, but they cannot use the same lawyer to provide independent legal advice with respect to their Agreement.To ensure you are advised properly with respect to the consequences and implications of executing a Separation Agreement, you must retain a different lawyer than your spouse.What are the benefits of a Separation Agreement? The negotiation or mediation of a Separation Agreement is typically less costly than commencing a Court action. That’s the good news.However, in order to effectively negotiate a Separation Agreement, both parties must be willing to come to the table with a cooperative attitude and a mindset of making concessions.Having said that, each party should be acting voluntarily and not subject to any duress as a result of the actions of the opposing party.
When entering into a Separation Agreement, be mindful that providing financial disclosure to the other party is extremely important.When parties are negotiating support and property issues, providing your financial disclosure will reduce the potential for the other party to state that they were unaware of your financial circumstances. This reduces the likelihood of having your Separation Agreement challenged in the future by your former spouse.In fact, exchanging financial disclosure and obtaining independent legal advice for both parties will result in a Separation Agreement that stands a greater chance of holding up in court.A Separation Agreement may be used to resolve some issues or all issues in your matter. Also, in order for a Separation Agreement to be binding, both parties have to sign the Agreement, and have it witnessed.
SETTING ASIDE DOMESTIC CONTRACTS
Full and frank financial disclosure prior to drafting any domestic contract is a fundamental aspect of drafting one. Failure to insist on it leaves the contract vulnerable to being set aside if challenged at a future date.
Other reasons parties may apply to the court to have the contract set aside includes a party failing to disclose to the other significant assets or debts that existed at the time the contract was entered into, if a party did not understand the nature or consequences of the contract; or for more general reasons such as undue influence, duress and so forth. There may also be instances where a court will set aside support provisions or a waiver of support in a contract if the provision or waiver results in unconscionable circumstances.
Often when parties have marriage contracts in place and they attempt to have them set aside, they may argue that specific clauses were not clear enough or they did not understand their consequences when signing the contract. In these situations, the Court must look for an interpretation that is in accordance with the parties’ intention at the time the contract was signed.
Under the Family Law Act, there are certain requirements that must be met in order for a domestic contract to be valid. It is very important that your domestic contract is properly drafted by a qualified family law lawyer who understands these requirements in order to ensure that your contract is enforceable.
The lawyers at the Masellis Family Law Group have extensive knowledge and experience in the negotiation and preparation of Cohabitation Agreements, Marriage Contracts and Separation Agreements.
If your significant other has presented you with a cohabitation agreement or marriage contract or your relationship has irretrievably broken down and you have been presented with a separation agreement, it is important that you get independent legal advice to ensure that your interests are protected.
If you feel that you have signed an unfair domestic contract or if feel that you may be entitled to more than what the contract provides for, we have experience in setting aside Cohabitation Agreements, Marriage Contracts and Separation Agreements.
Our lawyers and staff are committed to protecting your legal rights and getting you the most just and fair outcome possible. Whatever your needs are, we at the Masellis Family Law Group encourage you to contact us for a free, no obligation, confidential 30 minute in person consultation to discuss your matter. We are here to help.