Consider a Marriage Contract

Thousands of weddings have been dramatically downsized, postponed or canceled this year, leaving many couples unsure of how or when to re-start planning for their nuptials.

Hopefully, marriage is the beginning of a long and wonderful life together. Whether you decide to go ahead with your wedding ceremony this year, or postpone it to next year, before you walk down the aisle you may want to consider drawing up a marriage contract, especially if you have considerable assets or children from a previous marriage. This is because in many places there are automatic defaults for property division if the marriage ends through death or divorce.

In Ontario, you can determine your own system for property division, support payments and other related issues under a marriage contract. There are some exceptions; child custody, child support payments and temporary matrimonial home possession are all dealt with separately under family law.

A marriage contract is an important part of your wealth protection and inheritance planning. The contract will help protect your assets from claims by your spouse if you separate or divorce and will ensure you both pass on your assets to your chosen beneficiaries upon death.

A marriage contract may be broad or narrow in its scope; it can focus on a single issue like support, or property, and can specify different rights depending on whether one of you dies or if you have decided to end the marriage.

If you are entering the marriage with considerable assets, a contract will be helpful as it states the value of certain assets, of which will not be divided if the marriage ends. The contract may also address the treatment of the increased value of these assets and how any income generated from them will be dealt with.

If you decide you want to get a marriage contract; make sure you have it drawn up by an experienced professional, because in Ontario a court of law can set aside the contract or some of its provisions if the contract doesn’t meet certain tests, including:

If either of you didn’t properly disclose assets or income.

If either of you didn’t understand the consequences of the contract.

If the contract was entered into as a result of undue influence, mistake or fraud.

If under certain circumstances the spousal support was considered unconscionable.

If done properly a marriage contract can give both of you peace of mind, allowing you to relax and build your life together. This will include revamping your financial plan, so give me a call when you get home from the honeymoon.

Have a great weekend,

Tracey

Source: original article posted on Advisor.ca 05-09-14 by staff, MT 10-10-14,2017-06-28,

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