Consider a Marriage Contract

This weekend my husband and I celebrated our 25^th Wedding Anniversary, quite an accomplishment considering 40% of marriages end in divorce. It hasn’t always been easy but good communication and mutual respect has always been at the core of our relationship.

However, if something went wrong and I was in the position of getting married again, I would discuss having a marriage contract with my new spouse. This is because in many places there are automatic defaults for property division if the marriage ends through death or divorce. As an independent business owner and mother, I would want to protect my assets and my children’s inheritance.

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 because 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 a long and wonderful life together. This should 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, merchantlaw.com, MT 10-10-14,2017-06-28, 2020-07-21,2022-09-09

Products or services related to investments, investment recommendations, financial planning, retirement planning, and investment reviews are provided through our mutual fund dealer Security Financial Services and Investment Corp. 4665 Yonge Street, Suite 309, Toronto, ON M2N 0B4 t 416.964.0440