Top 5 Considerations When Drafting a Domestic Contract
It’s summer, which means it’s wedding season. Every weekend I see countless couples posing for pictures around Ottawa’s hot spots as they celebrate their “I do’s”. While the romantic in me can’t help but smile at their obvious happiness, the lawyer in me can’t help but wonder if they have preserved their assets and protected their rights.
Whether you’re moving in with a new partner or tying the knot, many people think it’s unromantic to discuss what will happen in the event of a relationship breakdown. But if you don’t decide how your assets will be divided or how spousal support will be determined, the governing legislation will decide for you.
In Ontario, the Family Law Act allows people to enter into different kinds of “domestic contracts” establishing their own rules for dealing with financial matters in the event of a relationship breakdown. “Cohabitation agreements” apply if you’re living with your partner, and “marriage contracts” apply if you’re getting married.
Here are the top 5 things to consider when drafting a domestic contract:
- Define the terms used in your agreement clearly;
- Address how assets will be divided in the event of separation or divorce;
- Address how and when spousal support will be paid in the event of separation or divorce;
- Address how the family residence or “matrimonial home” will be dealt with in the event of separation or divorce; and
- Ensure the agreement will survive any challenges by including provisions that contemplate the future changes such as marriage, as well as recognizing that the contract will prevail over family legislation, and ensuring that both spouses receive independent legal advice.
There are certainly other aspects that should also be taken into consideration in drafting domestic contracts. Talk to a family lawyer prior to moving in with your partner or getting married to get a better idea of the issues that could affect you in the event of a relationship breakdown. For more information, read a recent article that provides an overview of the ‘Top 5 Considerations When Drafting a Domestic Contract’