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The Value of a Marriage Contract

By admin-tmfd on 1 May 17 Uncategorized

As a dental professional, you know that financial honesty and transparency are intrinsic to a healthy and balanced practice and partnership. While it may be delicate, and in some cases uncomfortable, it’s just as important to apply the same values when it comes to partnership with a significant other.

Whether contemplating marriage or living together in an intimate or committed relationship, financial fallout as a result of relationship breakdown is difficult to contemplate. However, the outset of the relationship is the wisest time to grasp understanding of your potential rights and
obligations along with options available to preserve wealth and minimize associated risks.

CONSIDERATIONS FOR A CONTRACT

Situations can vary and outcomes are not necessarily predictable. For example, much to the surprise of many, in the case of individuals unmarried and living together, courts are showing increasing willingness to allow successful claims to be made against
property – even in the absence of significant financial contributions made toward the original acquisition of that property. Property is not limited to real estate and investments; it could include a dental practice. Although we’re not yet at the stage in Ontario where there is automatic sharing in property values – as is the case with married spouses. With each passing year we move ever closer to the possibility that the court and/or the government, will elect to implement that result in the future.

Dental professionals may focus particularly on minimizing risks pertaining to the payment of spousal support (alimony), or desire to preserve the value of a dental practice, investments, or real estate being brought into a relationship. Or it may be enough to consider the appeal of having a reasonable written agreement in place, one that provides for a realistic orderly outcome in advance of an actual separation, and offsets significant dispute later when perspectives have changed and memories have faded. The less dispute and uncertainty on the horizon, the better it is for you, your dental practice and your future profitability.

A MODERN-DAY MARRIAGE REALITY

Marriage Contracts (known as “pre-nups”) and Cohabitation Agreements are becoming increasingly common, particularly in cases involving second marriages. The first step to proceeding with a Marriage Contract or Cohabitation Agreement is to speak with a family law lawyer concerning your particular situation as well as your goals and concerns. These agreements can be negotiated and completed prior to marriage or cohabitation but also after and during the relationship. Contrary to some misconceptions, they can be prepared, negotiated, and finalized in a fully enforceable manner. However, the process followed is critical and may utilize specialized interest-based processes like mediation or collaborative family law to arrive at a signed agreement.

THE VALUE OF AN AGREEMENT

Agreements can be creatively tailored to address, in advance, the resolution of a variety of important issues from the very narrow and discrete (such as how to address a particular home or a dental practice that is brought into a relationship) to all possible issues in the right circumstances. There is no-one-size-fits-all approach to handling these agreements, however, it must always be in a sensitive and fair manner since they’re being negotiated within the scope of an existing committed relationship.

What these agreements expressly cannot provide for is:

  • The right to custody of or access to children, though they can address the right to direct the education and moral training of children; and,
  • A limitation of certain rights a spouse may have with respect to a Matrimonial Home, including a right to possession of a Matrimonial Home.

It is true that many agreements are challenged in court and it’s critical to understand the main reasons behind a successful challenge. This allows you and your lawyer to tailor an approach and process to address the real goals and concerns you have in any given situation.

Some of the main reasons these agreements have been successfully challenged in court in the past include:

  • Inadequate financial disclosure;
  • Lack of independent legal advice for each spouse; and
  • One-sided agreements that provide for unconscionable results.

Apart from agreements that are upheld and fully enforceable, sometimes the mere existence of the agreement itself opens some significant leverage even in those situations where a party seeks to challenge the agreement years later.

IN CONCLUSION…

If you’re entering a new relationship and making plans for the future, consider a consultation with a family law lawyer to ensure you understand the extent of your rights, obligations and options.

 

JUSTIN CLARK is a Partner at the law firm of Simmons, da Silva LLP, a firm located in Brampton, Ontario, in the heart of the Regional Municipality of Peel. He obtained his LL.B from the University of Ottawa. Justin Clark practices exclusively in the area of family law and is also trained to practice in the area of Collaborative Family Law. He has successfully argued family law matters in all levels of Court in Ontario. Simmons, da Silva LLP is a multi-disciplinary firm that practices in the areas of family law, business/corporate law, real estate, wills and estates, and civil litigation. The firm was established in 1969.

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