Statistics show that people are getting married much later in life, after they have started their careers and begun to accumulate assets and savings. In addition, many others are choosing not to formalize their partnerships through marriage and prefer to live as common-law spouses. In either circumstance, what happens if the relationship does not last? If you are getting married or planning to live with your partner, it can be comforting to know just how your assets and property will be divided in the event that your relationship does not work out – an uncomfortable and all too possible reality in this day in age.
A domestic contract, known by some as a “pre-nup”, is a contract that sets out ahead of time what will occur if the relationship ends. For example, it could set out that “If Mary and George ever separate, Mary gets to keep the tools, the dog, and the house, and George gets to keep the cars, the cottage, and the paintings.” Without this type of written agreement, one party could end up with everything, or end up with assets or property that they do not want (George has always hated the dog, and Mary could not be bothered to use the cottage). In more extreme circumstances, one party could end up sharing half the house that they purchased alone, even if the partner did not contribute to the initial purchase.
Marriage contracts are not just for those who have already accumulated assets that they want to protect; they can be very useful for young couples starting to plan their lives together and for persons with previous marriages or blended families looking for certainty for the future.
Real life circumstances are rarely as simple as the example above. Drafting a domestic contract is highly fact specific and should be discussed on a case-by-case basis with a lawyer to ensure that it will suit your individual lives. Moreover, since this is all about certainty and predictability, using a lawyer to draft your domestic contract will lend greater enforceability to the contract in court should this ever be required.