Marriage contracts, commonly referred to as prenuptial agreements, are typically entered into before or at the outset of a marriage. These agreements allow spouses to define their financial rights and responsibilities in the event of a separation, rather than relying solely on default rules under Ontario family law. A marriage contract can address issues such as how property will be dealt with if the marriage ends, as well as the expectations each spouse has during the relationship.
Cohabitation agreements serve a similar purpose for couples who choose to live together without marrying. These agreements help clarify financial arrangements and property rights during the relationship and upon separation. If a couple later decides to marry, a cohabitation agreement can continue as a marriage contract unless the parties choose to replace it with a new agreement.
Subject to certain legal limitations, marriage contracts and cohabitation agreements can govern a wide range of matters, including the division of property if the relationship breaks down. Because these agreements can have serious and lasting legal consequences, it is essential that they are carefully drafted or reviewed by an experienced family law lawyer before being signed.
These agreements may address, among other things:
- how finances will be managed during the relationship or marriage;
- the expectations and responsibilities each party has toward the other;
- how assets will be divided if the relationship ends; and
- which assets, if any, will be excluded from equalization or division.
A key component of any enforceable marriage contract or cohabitation agreement is full and honest financial disclosure by both parties. Agreements are frequently challenged in court where disclosure was incomplete or misleading. Where concerns arise about transparency, legal counsel can assist in identifying and addressing undisclosed assets to help protect the integrity and enforceability of the agreement.
