Is your marriage contract valid? Can you void a “prenuptial agreement”? An Ontario man found out when he challenged his agreement in the Ontario Superior Court of Justice.

The Canadian version of a prenuptial agreement is called a marriage or domestic contract. Marriage contracts can ease the worry of what will happen if your marriage fails.

Without a contract, you may have to rely on the uncertain outcome of a court or mediator-arranged settlement.

What makes a marriage contract invalid?

A marriage contract, also known as a prenuptial agreement, can be a useful way for couples to protect their assets and debts in the event of a divorce or separation. However, not all marriage contracts are valid, and there are several reasons why a contract may be deemed invalid.

One common reason for invalidation is the failure to disclose all assets and debts. Both parties must provide complete and accurate information about their finances, and failure to do so may render the contract null and void.

Validating Your Marriage Contract: Essential Tips

A marriage contract can also be invalid if one party signs it under duress or coercion. The law requires that both parties enter into the contract voluntarily without any undue influence or pressure. If one party threatened the other to sign the contract, the agreement would be considered null and void.

A marriage contract must be reasonable and fair. If one party has substantially more bargaining power than the other, the contract may be unenforceable.

For example, if one party insists on terms that are clearly one-sided or unreasonable, a court may find that the agreement is not valid.

Understand the agreement

Another reason why a marriage contract may be deemed invalid is the absence of witnesses during the signing of the agreement. Witnesses ensure that both parties understand the agreement and that no one is signing under duress. If the contract is not signed in the presence of witnesses, it may not be enforceable.

Some provisions in a marriage contract may be illegal or against public policy, making the entire contract invalid. A provision that waives a party’s right to child support or limits spousal support may be unenforceable if it is too harsh or one-sided.

It can be an effective way to protect both party’s interests, but it is crucial to ensure that the agreement meets all legal requirements and that both parties enter into it voluntarily and with full knowledge of their rights and obligations.

If you have any concerns about the validity of your marriage contract, it’s best to consult with a lawyer. They can help you understand the legal requirements and determine if your agreement is valid.

Is a marriage contract legal in Canada?

Marriage contracts, also called prenuptial agreements, are legally recognized in Canada and have become increasingly popular among couples. They offer a way to protect assets and finances in the event of a divorce or separation.

Under Canadian family law, marriage contracts can cover financial matters like the division of property and spousal support. However, for a marriage contract to be valid, it must meet specific legal requirements, including full financial disclosure and the absence of coercion or duress.

Consulting with a family law lawyer can help ensure that your marriage contract meets all legal requirements and safeguards your interests.

When should you sign a marriage contract?

If you have been divorced or in a long-term relationship before, you may have obligations like a child or spousal support. Or say you have substantial assets: cash, stocks and bonds or a home you want to preserve.

Your family may also want a say, especially if their money or jointly owned assets such as business interests are at stake.

You can make a contract before or after you marry. How you own or divide property, spousal support and how you educate or raise your children can all be included.

You may also make advance decisions on how to annul or dissolve the marriage if needed, how a separation would work and how assets would be divided on your death.

Since any wills are revoked when you divorce, including estate plans, can ensure assets are divided as you both intended. Among the few matters that cannot be included in a marriage contract are child custody and access. Those are left up to the court.

Is Your Marriage Contract Valid And What Happens If You Separate?

You may want to write into the contract that the value of a home you owned before you married will be deducted from its final worth when you separate or divorce.

Only any increase or decrease in the value of your matrimonial home (where you live after you marry) will be added to the property available to split after a marriage break-up.

Be aware family gifts or cash you put towards a shared home are usually divided equally.

If you are considering signing a marriage contract or are wondering if the marriage contract is valid, contact us. We will connect you with an attorney.

When you have a dispute

When a dispute arises around a marriage contract, you can call a mediator or go to court. Courts look at whether the contract is binding. For example:

Did you have your own lawyer review it before you signed?
Did the contract fully disclose all assets, debts or liabilities?
Was the contract subject you to duress or fraud?
Are the terms and their meanings clear?
Is there anything in the contract not permitted by law?

Is the Marriage Contract Valid?

An Ontario couple signed a marriage contract six days before their wedding. The contract, downloaded from the Internet, waived spousal support.

The couple also agreed not to divide their net family property if they divorced or separated. A friend witnessed their signatures and the wife claimed they signed voluntarily.

The document stated the pair had legal advice, although neither did.

After a seven-year marriage, the couple separated in August 2012. The wife, who owned the matrimonial home, gave her spouse $1,600 to help with rent but said that was all he could expect.

The husband, who has a mental disorder, hired a lawyer in October 2012. Delays due to his health resulted in his application for spousal support and equalization of their property not being issued until August 2017, he said.

The husband asked to void or set aside the marriage contract.

The Limitations Act

The wife responded that his request was statute-barred by the Limitations Act. In other words, he was too late. She asked the court to decide without a trial, called a summary judgment.

Under the Ontario family law rules, a judge can do this if there is no genuine issue requiring a trial.

The judge heard the husband dispute that the couple had planned how they would “structure their lives” after marrying.

According to the husband, his wife had given him an ultimatum that she would back out of the marriage unless he signed. She did not suggest he get legal advice before signing, he said.

The wife disagreed. She said the couple had each been married before, with children from those relationships. Because of that and their different financial philosophies, they decided to stay financially independent.

She told the court her husband left to prepare the contract for her. He never mentioned feeling rushed or needing more time to think it over. He thought hiring a lawyer would be a waste of money, she stated.

Understanding the Validity of Marriage Contracts

Since they had each been married before, she felt they both understood family law. Her ex-spouse agreed but said she knew more than he did.

The discrepancies continued. Neither spouse had fully disclosed their financial affairs. The wife planned to keep her finances separate after marriage and considered disclosure unnecessary.

And yet, the contract, a standard Internet template, stated both had made “fair and reasonable” disclosure of their property and financial obligations.

Marriage Contract Validity: Key Factors to Consider

The judge ruled that the husband’s claim to equalize their property had been filed in time under the Family Law Act, which has no limitation period for spousal support claims.

However, when a couple makes a marriage contract, the contract is a defence to spousal support and property claims unless it is declared void or the court orders it is set aside.

Under the Limitations Act, an ex-spouse must apply to set aside a marriage contract within two years after their claim is “discovered” (the decision that a claim to the court could be made).

Despite their different accounts of how the marriage contract was made, it was up to the court to decide whether the husband applied in time and whether, under section 7 of the Family Law Act, his mental disorder suspended the time limit.

The judge also considered the husband’s allegation that the contract was inadequate or improperly written.

Canadians are presumed to know the law

The court used the date the husband first saw a lawyer for the “discovery” of his claim. That was when he became aware of issues with the marriage contract.

Courts aren’t allowed to change when a claim is “out of time” and, the judge stated, citizens are “presumed to know the law of the land.” Since the husband failed to file his request to void the contract within two years of discovery (by October 2014), he lost on that point.

The judge also ruled the husband had no reliable medical or other evidence to support that having a mental disorder delayed his claim. His claim was denied on that count too.

Author: Alistair Vigier is the CEO of ClearWay Law

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The Truth About Your Marriage Contract: Is it Valid?