The Value of Domestic Contracts
A Domestic Contract may have other names such as a pre-nuptial agreement, or a cohabitation agreement. In this memo, we are not talking about separation agreements. Separation Agreements are the documents that are used to define how property will be separated when the spouses go their separate ways or wish to at least resolve financial conflicts between themselves.
A Domestic Contract may be entered into prior to living together, while living together, prior to marriage, or even after marriage.
Purposes of a Domestic Contract
A Domestic Contract may do the following:
Confirm in a clear and understandable way how your rights and the rights of your spouse will be put into effect, in terms of ownership of property, potential spousal support and other property concerns if you should separate or if one of you should pass away while you are still in your relationship.
May assist in defining specific items of property and how they will be distributed between you and your spouse, even if you do not have the items of property as yet. For example, you can put into the contract that if you register a property into the name of one person it is theirs alone, into both names it is always split 50/50 unless there is an agreement to the contrary. This is not the way the law specifically applies and so you can understand how the law would work without a Domestic Contract (this will be explained to you). We would decide what should be put into the document that would make it easier for you to make plans in the future.
Allows for the valuing of certain items, because if the item ever comes into dispute in the future and one needs to know its value as of the date of cohabitation or if there is a marriage, the date of marriage, those values can be defined and this avoids arguments and confusion if there should be a separation.
Allows you to have a lawyer with whom you can speak to about various interests or problems that could arise.
Allows you to think about Wills and the distribution of property if you should pass away without a Will.
If there are children of either spouse in the relationship they can be protected properly.
Divide or resolve any other potential areas of conflict of property, whether it be making sure that a family cottage remain in one side of the family or the other, a business remain one person’s or the other, and particularly describe what will happen to property or other financial interests in the future.
A Domestic Contract exists for years, has no end date unless the parties separate or one of the spouses passes away. A domestic contract can be destroyed, but only if both parties agree that it is of no affect. Otherwise, either party may request a court to consider making the content of the Domestic Contract legally enforceable, and grant court orders or judgements pursuant to what was agreed on.