Enforceability of Domestic Contracts
Pre-nuptial Agreements, Co-habitation Agreements, Marriage Contracts and Separation Agreements can make for added complexity in any estate dispute. Considering the disproportionate rate of estate litigation in families were there have been second marriages (or spousal relationships), it is inevitable that such contracts will continue to impact our practice.
In the recent edition of the Trust Quarterly review published by STEP, the authors of a paper note that "Pre-nuptial agreements are currently not legally binding in England and Wales, but can be taken into account as one of the circumstances of the case." In contrast, the authors note that agreements made after the date of marriage are likely to be binding, subject to the principles of contract law.
In Ontario, claims advanced under Part V of the Succession Law Reform Act are evaluated based on the existence of a number of factors including, under section 62(1)(m), "any agreement between the deceased and the dependant." Certainly there appears to be a trend towards more careful drafting of agreements which may involve the parties contracting out of statutory entitlements they may assume on the death of the other. Given the gravity of contracting out of such significant entitlements, any challenge to such a contract must consider such factors as: (i) the existence of ILA; (ii) the degree of disclosure; and (iii) the presence of any degree of coercion, to name just a few.
Have a great weekend!
David M. Smith