Part II: Marriage Contracts and The Protection of Dependants
As previously discussed in last week’s blog, marriage contracts are often entered into in order to contract out of the rights afforded to married spouses by the Family Law Act.
Spouses may decide to enter into a marriage contract for various reasons. For instance, one spouse may be bringing in significant assets into the relationship and wishes to protect these assets.
When entering into a domestic agreement such as a marriage contract, it is often prudent to ensure that the marriage contract coincides with one’s estate plan. Accordingly, it may be wise for a domestic contract to be drafted in conjunction with one’s estate plan.
It is important to note s. 63(4) of the Succession Law Reform Act, which gives the court discretion to make an order for support, even though the dependant released or waived his or her right to support. This release or waiver may be contained in a domestic agreement such as a marriage contract. Therefore, even if the deceased and his or her spouse entered into an agreement intentionally releasing one another’s claims, if the deceased was a dependant, the court has discretion to order support notwithstanding the agreed upon provision in the marriage contract. However, the domestic agreement is a factor the court must consider on an application for support.
Moreover, the court may set aside a marriage contract while both parties are living if the provision respecting support “results in circumstances that are unconscionable”, if the dependant receives public support, or if there is default in support payments under the agreement. Further, marriage contracts can be set aside if one party fails to provide proper financial disclosure to the other party, if one spouse did not understand the nature and consequences of the marriage contract, or if there was mistake, undue influence or fraud by one or both of the spouses when entering into the marriage contract.
Thank you for reading.