Also known as a marriage contract, marital contracts are legally enforceable agreements containing customized rules for dividing a couple’s property if they separate, divorce, or die. If you and your loved one are planning to settle down together or already have, you may want to consider investigating marital contracts.
One of the most common misconceptions about marital contracts is that they are a sign of mistrust among couples. On the contrary, these contracts symbolize proper planning before entering into a marriage. Furthermore, as you will find out later in this article, in some cases, marital contracts prove that you care for your spouse.
What is the Purpose of a Marital Contract?
The primary purpose of a marital contract is to provide a guideline on what should happen to a couple’s property or assets if they separate, divorce, or die.
Is a Marital Contract Right for Us?
The simple answer is yes, a marital contract is right for you. Here is why.
Avoiding Divorce Arguments
Most people do not enter into marriages planning for a divorce. Unfortunately, life happens. Even the most love-filled marriage could end up in a divorce.
Divorce processes are not the easiest to handle. They are not only expensive and time-consuming but also stressful. However, you and your spouse can avoid these legal battles by stating what should be done to your property and assets should you divorce.
A marriage contract can protect your spouse from your debt and you from theirs. This means that when you get a divorce or separation, you will not have to pay your spouse’s debt, and they will not need to pay yours as well.
Protecting Your Children
If you are a single parent planning to marry, marital contracts can protect your children’s interests. This is because if you divorce after the marriage, you and your ex-spouse must share the property equally in half. However, you can separate your assets from your ex-spouse when you have a marital agreement. That way, they cannot come after what you own if you divorce.
What is a Cohabitation Agreement?
A cohabitation agreement is a legally-binding agreement signed by two individuals who have chosen to live together but are not married. This agreement includes specific details on property ownership and distribution upon separation.
Is a Cohabitation Agreement Right for Us?
Signing a cohabitation agreement with your partner does not mean you do not trust them. On the contrary, it shows that you care about them enough to discuss sensitive issues that could potentially ruin your relationship during and after separation.
Here is an example.
If you and your partner want to buy a house but are not married, it may be necessary to have a cohabitation agreement. This agreement explains who owns the property and what percentage. It also discloses how the property should be divided between you and your partner should you decide to part ways.
Such an agreement can also help you avoid expensive legal costs. For instance, when you and your partner stop cohabitating, you may need a family law lawyer to help fight for what you are entitled to from the relationship.
Whether it is a car or a house you bought together, chances are you contributed in one way or another. In fact, you may even have contributed the larger percentage, meaning you may be entitled to the bigger share of the property. But you will have a rough time convincing the court if you do not have an agreement with your partner. This is because the law assumes that you and your partner own the property equally
So even if the other party did not contribute anything towards the acquisition of the property, you may still have to share it with them – equally – when you decide to part ways. But this is not something you need to worry about when you have a cohabitation agreement. It contains guidelines on dividing the property and other important issues that might arise while cohabitating.
The Importance of Marital Contracts for Estate Planning During or After a Divorce
Marital contracts explain what should happen to your estate when you and your spouse decide to get a divorce. It is always advisable to sign this contract before marriage to avoid legal issues when you decide to part ways.
But if you did not sign a marital agreement before marriage to protect your estate, you can also do so by signing a post-marriage contract, also known as a postnuptial agreement. This agreement explains who owns what during marriage and might also explain who is responsible for certain obligations.
Marital Contracts for Business Owners or Shareholders
Understandably, it is uncomfortable to talk about marital contracts with your spouse, especially regarding business ownership. But the consequences of not having such a discussion are more severe. As mentioned earlier, life happens, and it is always advisable to prepare for every possible scenario.
For instance, as a business owner without a marital contract, different scenarios could occur if you and your spouse decide to divorce. For instance, your ex-spouse might:
- claim half of your business;
- also claim your business shares; or
- petition to have your business sold to pay out the divorce settlement.
Whether or not they will succeed solely depends on the circumstances of the case. But one thing is for sure; you will spend a lot of money and resources on legal expenses, something you could avoid by signing a marital contract to set the record straight.
How to Choose the Best Toronto Lawyer for Marital Contracts
When looking for the best lawyer for marital contracts in Toronto, consider the following factors:
- Experience in handling marital contracts and family law disputes in general
- Their reputation in this area of practice
- Their availability to handle your case
- Their communication with you (How good are they at communicating? Do they respond to your calls on time? etc.)
- Whether or not they sound knowledgeable
- Whether or not they understand your case
How the Toronto, ON, Lawyers at Bykov Law Can Help
At Bykov Law, we have witnessed countless legal battles that could have been avoided by signing martial contracts. For this reason, our lawyers understand how it feels to lose something you worked so hard for. But what if we told you that you could avoid all the confusion and conflicts by signing an important piece of paper? Contact us today at 416.519.3259 to find out how we might be able to help.