Marriage contract 'a must’ the second time around
By Paula Kulig, AdvocateDaily.com Contributor
Couples who cringe at the thought of a marriage contract because they believe it ruins the romance need to be realistic, especially if they’re entering a second marriage, says Toronto family lawyer and life coach Leanne Townsend.
“In 2018, with the high divorce rates, people who cling to the idea that it’s not romantic to be contemplating a marriage breakdown before they even tie the knot are being naive,” says Townsend, a partner with Brauti Thorning LLP.
“In some ways, a marriage is like a business partnership. There are so many legal rights that flow from it.”
A marriage contract, which can be agreed to both before and during a marriage, is a good idea for any couple, but it’s a must for someone entering a second or subsequent marriage, she tells AdvocateDaily.com.
“Often if it’s a second marriage, you’re older and more established. You may have more assets or property that you want to protect. And you may also have children from a previous marriage or relationship and want to protect their inheritance,” Townsend says.
The need for clarity can’t be emphasized enough, she says.
“It makes it clear to the new spouse and to the children. It just makes everything easier, so should something go wrong down the road, like a divorce or a death, it’s already laid out what should happen.”
Despite the benefits, Townsend says discussing a marriage contract can lead to friction in a relationship and many people, including those in second marriages, choose not to enter into a contract or avoid the conversation altogether.
“Some people are offended by being asked to sign one. Sometimes if the proposed contract is really robbing a person of many of their legal entitlements, that could be interpreted as sending a certain message,” she says.
“If a contract is fair, it shouldn’t generate ill will. But sometimes what’s proposed is really not fair, or the tone is not very nice. So that can create problems.”
Legal entitlements affected in a marriage contract usually revolve around spousal support to the person who comes into the marriage with fewer assets and perhaps isn’t working, Townsend says.
“The contract could limit what someone might be entitled to, the amount of spousal support they’ll receive and for how long.”
Townsend also recommends that couples in common-law relationships draw up cohabitation agreements. While there are some similarities between common-law and married couples in terms of spousal support when a relationship breaks down, property rights are another story.
“Many people don’t understand that when you live common-law, you don’t acquire property rights. If you live together three years or more, you may acquire a right to spousal support, but you don’t acquire rights to your spouse's property,” she says.
“You have people who live together 15 or 20 years, for example, and the man was the main breadwinner and assets were in his name because he bought them, and then you have the other person who has nothing and doesn’t have any property rights to the home and to other things that the man purchased.”
A cohabitation agreement can provide some protection to the spouse who doesn’t own property when a common-law relationship ends, “but first you have to get the person who owns the property to agree,” Townsend says.
Whether negotiating a marriage contract or a cohabitation agreement, “you want to make sure you have a lawyer properly draft it — don’t just download it from the internet.”