Thinking of Getting Married? Maybe You Should Consider A Marriage Contract? There is more to marriage than just a party with a DJ and catered food. Getting married is a serious legal undertaking which involves significant financial consequences. I realize that discussing a marriage contract with your spouse can be extremely difficult and may spoil the mood. Marriage contracts are not for everyone – but they may be helpful for some (if they can muster up the courage to discuss the contract with their spouse). What happens to your property when you do not have a marriage contract? The Family Law Act (the “FLA”) is the legislation that applies to property upon marriage breakdown – it provides a default regime for those of us who do not have contracts. The philosophy of the FLA is that subject to certain exceptions*, any financial growth during the marriage is to be shared equally by both spouses. Accordingly, upon marriage breakdown caused by separation or death, a calculation is done for each spouse to determine the growth in the value of that spouse’s assets during the marriage. The FLA then prescribes that a payment is to be made by one party to the other to provide for equal financial growth during the marriage. Please note a common misconception is that parties will end up with the same net worth on marriage breakdown – this is not necessarily true, especially if one spouse came into the marriage with significant assets! The exceptions mentioned above relate primarily to the matrimonial home, inheritances and gifts. Note that if you are living in the same home at the date of marriage as at the date of separation or death, the entire net value of the home is shared equally between the spouses, but if you move homes the entire net value of the home is NOT necessarily shared equally between the parties. The court may award a spouse an amount that is more or less than half the difference between net family properties if the court is of the opinion that equalizing net family properties would be unconscionable. Marriage Contract Parties wishing to opt out of the property provisions of the FLA can enter into a marriage contract to provide for different provisions than contemplated in the FLA. Among other things, a marriage contract may deal with: – property; – support obligations; and – directing the education and moral training of children. Note that if you decide to enter into a marriage contract the court may set aside a contract for various reasons including if: – If a party failed to disclose to the other significant assets or significant debts or other liabilities existing when the domestic contract was made; – If a party did not understand the nature and consequences of the domestic contract; and – Otherwise in accordance with the law of contract. Further, the court may disregard any provision of a contract respecting the provision for support if: – the provision results in unconscionable circumstances; – the provision relates to a dependent who qualifies for social assistance; or – there is a default in paying support under the contract. If you are interested in drafting a marriage contract please contact our family law department by calling at 416-449-1400 or by emailing info@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Wills and EstatesAugust 13, 2019October 2, 2024
Legally Bound to be Faithful During the Marriage? By: Katelyn Bell, Summer Law Student Celebrities Justin Timberlake and wife Jessica Biel made headlines a couple years back when word spread that they had an “infidelity clause” contained within their marriage contract. The clause allegedly stipulates that if Timberlake is unfaithful to Biel, he owes her $500,000.00. This type of clause is known as a “lifestyle clause,” which are more common than you would think. The clauses address non-financial aspects of a marriage, and the range of things in which they can outline is quite vast. While some clauses may stipulate how many times the in-laws are allowed to visit per year, others may set out body-weight requirements (woah), and then of course, there’s the ones that speak to extra-marital affairs. Ultimatums about infidelity are among the most popular lifestyle clauses in domestic agreements. And though infidelity clauses are quite common for celebrities – consider also Catherine Zeta Jones and Michael Douglas, or Brad Pitt and Angelina Jolie – it isn’t only celebrities who choose to include these types of clauses in their relationship agreements. The general public is making use of lifestyle clauses as well, especially those relating to infidelity. Reason being: (1) These types of clauses are a way to ensure financial stability, and (2) Having a clause of this type may be an effort on the part of one spouse to prevent (or at least try to prevent) their partner from cheating. But do they work? With regards to point (1) above, in order for the clause to afford the wronged spouse any money, the clause must be enforceable in the courts. If the domestic contract is contrary to public policy, despite its validity at the time, the court will not enforce such an agreement. In Canada, “fault-based divorce” has been eliminated from the legislation. Though the Divorce Act originally provided two grounds for divorce – cruelty/adultery and no-fault – today there is only one ground, which is marriage breakdown (s. 8 of DA). Marriage breakdown is a no-fault ground to divorce. Because Canada’s divorce legislation is “no-fault,” including a clause in a contract which explicitly puts a spouse at fault (i.e.: “If you cheat on me you owe me $60,000.00”) is most likely unenforceable. Our system is not meant to punish individuals for misbehaviour, and as such, adultery is not a determining factor in asset distribution. Though an infidelity clause has yet to be challenged in a Canadian court, the D’Andrade v Schrage (2011) decision provides some insight as to how Canadian courts are likely to respond to an infidelity clause in a pre-nuptial agreement. In this decision, the court rejected the argument that an affair during the negotiations of a marriage agreement (being negotiated after the parties were already married) would void the agreement. The court stated: “In recognition of the fact that marriages are complicated institutions, whose failure can rarely be attributed to one party or the other, the law has evolved in a fashion that by and large eliminates conduct from the analysis of financial entitlement…” “…it is important to consider the purpose of the contract in question. It is not to enforce personal obligations such as the duty to remain faithful or the commitment to remain in the relationship. While people may feel that these obligations are part of the marriage “contract”, these are not the obligations that domestic contracts are meant to deal with.” In the United States, in a case which challenged an infidelity clause, the court found that the clause in the domestic agreement was not enforceable because it was contrary to the public policy underlying California’s no-fault divorce laws. Based on the above, it’s highly improbable that an infidelity clause would be enforced by a Canadian court. So with regards to the question of “But do they work?”, the answer to point (1) is most likely no, but what about point (2)? Will the inclusion of such a clause in a domestic agreement work to keep your spouse faithful? Reportedly, when Tiger Woods was rumored to be seeking back with ex-wife Elin Nordegren, Nordegren wanted an infidelity clause contained within their pre-nup with a $350 million financial penalty for Woods if he were to ever cheat again. Of course, whether or not the clause will work as a deterrent depends on each individual. While some spouses argue that these types of clauses are the antidote to adultery, many others may disagree. Ultimately, every relationship is different and spouses will have to decide which, if any, lifestyle clauses make sense for their relationship. If a couple chooses to insert an infidelity clause in their domestic agreement, as long as the contract has a severability clause, the rest of the contract will remain enforceable (so long as it remains legally valid), even if the adultery clause is not. If you are in need of a Family lawyer, please contact the family lawyers of Devry Smith Frank LLP for assistance, or call us directly at 416-449-1400. “This article is intended to inform and entertain. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawJune 30, 2017August 12, 2024