PRENUPTIAL AGREEMENTS IN CANADA

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Prenuptial agreements are enforceable in Canada. Courts in Ontario and other common law provinces of Canada previously considered marriage contracts to be contrary to public policy and unenforceable, but the 1978 Family Law Reform Act (now continued in the Family Law Act) specifically authorizes marriage contracts.

The agreements must be in writing, signed by the parties and witnessed. They may deal with a broad range of matters, including the ownership or division of property, support obligations, matters concerning the education and "moral training" of children (but not issues concerning custody of or access to children) and "any other matter." The legislation precludes spouses from opting out of those provisions in the Act that protect the rights of each of spouses to the matrimonial home.

The Family Law Act provides that a court may set aside a provision for support or a waiver of the right to support in a marriage contract and may determine and order support even though the contract contains an express provision excluding the application of this section:

a. If the provision for support or the waiver of the right to support results in unconscionable circumstances;

b. If the provision for support is in favor of, or the waiver is by or on behalf of, a dependant who qualifies for allowance for support out of public money; or

c. If there is default in the payment of support under the contract or agreement at the time the application is made.

Even as to assets, prenuptial agreements are not insurmountable. A Canadian court might modify or even ignore an agreement in some circumstances, such as if an unforeseen financially disabling or devastating event has occurred. Most Canadian provinces provide for judicial oversight of prenuptial agreements but the standard of judicial review varies from province to province. For example:

-Ontario's Family Law Act permits a court to set aside a prenuptial agreement or any portion thereof if a party failed to disclose significant assets or liabilities, if a party did not understand the nature or consequences of the contract, or otherwise, in accordance with the law of contract. Family Law Act, R.S.O. 1990, Ch. F.3., Sec. 56(4).

-Nova Scotia's Matrimonial Property Act allows for non-enforcement of a prenuptial agreement if any term is “unconscionable, unduly harsh on one party or fraudulent.” Matrimonial Property Act, R.S.N.S. 1989, Ch. 275, Sec. 29.

-Saskatchewan allows a court to redistribute property where an interspousal contract was unconscionable or grossly unfair at the time it was entered into. Family Property Act, S.S. 1997, Ch. F-6.3, Sec. 24(2).

-New Brunswick permits a court to disregard a provision of a prenuptial agreement if the spouse did not receive independent legal advice and application of the provision would be inequitable. Marital Property Act, S.N.B. 1980, Ch. M-1.1, Sec. 41.

-British Columbia's Family Relations Act states that even if there is a valid marriage contract, the court may re-divide the assets on the basis of fairness.5 The Supreme Court of Canada has confirmed that British Columbia's statute has a lower threshold for judicial intervention than do the provisions in other provinces. Family Relations Act, R.S.B.C. 1996, Ch. 128, Sec. 65(1).




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