A primer on domestic contracts
In recognition of both Valentine's Day and Family Day falling in February, this month's On the Radar
highlights a topic discussed in our new resource An Introduction to Family Law in Ontario
You may have heard terms like "pre-nuptial", "marriage contract", and "divorce settlement" — but what do they really mean?
In Ontario, the law recognizes certain types of agreements that people can make about their family relationships. Collectively they are called "domestic contracts". Here are some of the most common types:
1. Cohabitation agreement
This is an agreement between two people who are living together or planning to live together as a couple without being married to each other (sometimes called "common-law" spouses).
A cohabitation agreement can spell out how the couple want to share their assets or income and other aspects of their lives while they are together, or if they ever separate.
Family law has certain rules and guidelines about what happens when a couple separate. With a cohabitation agreement, two people can decide in advance to do it their own way.
For common-law spouses, this can be particularly important when it comes to property division because, without an agreement, they have no automatic right or obligation to share property.
One thing a cohabitation agreement cannot
do is to make arrangements about the couple's children if the couple should separate. This includes things like where the children will live, division of parenting responsibilities, and child support. These things can only be decided if and when the couple decides to separate.
2. Marriage contract
This is just like a cohabitation agreement except it is between two people who are, or who plan to be, married to each other. If they already have a cohabitation agreement, it automatically turns into a marriage contract when they marry each other.
The rules about what can and cannot be decided in a marriage contract are the same as for cohabitation agreements.
One important difference is that the law does
spell out how a married couple must divide their property if they separate. A marriage contract can override that, but if it doesn't, or if there is no marriage contract, the legal rules about division of property will apply.
3. Separation agreement
This is an agreement to settle issues between common-law or married spouses when they are separating or afterwards. (If they are married, this can happen with or without getting a divorce.)
Like a cohabitation agreement or marriage contract, a separation agreement can deal with property division and spousal support—but it can also deal with issues about children.
If there are children, the separation agreement should cover:
what their living arrangements will be and how much time they will spend with each parent,
who will have custody (the right to make major decisions about the children), and
who will pay child support and how much.
Points that apply to all domestic contracts
There are certain safeguards that must be followed for any domestic contract, or else it might not be valid and enforceable.
It must be in writing, and must be signed by both people.
It must be signed by a witness who saw both people sign it.
If the contract deals with property or support, both people must first give each other detailed and complete statements of their financial situation.
It is best if each person gets legal advice before signing. A court could overrule the agreement if the judge thinks it is unfair to someone who did not understand it or did not know their rights because they did not get their own independent legal advice.
For more information and help
For more information about domestic contracts and other family law topics, as well as where to get help, see the resources listed in the side panel.