Since all married couples are obliged to share the family patrimony in the event of divorce or death, when is it a good idea to have a marriage contract as well?
A marriage contract determines the rules that govern a couple’s financial affairs. It outlines each party’s contribution to household expenses and the division of assets in the event of divorce or death. It only applies to married couples. Common-law spouses can have a similar agreement, known as a cohabitation agreement.
The law stipulates that a married couple’s family patrimony be divided in the event of divorce or death. The patrimony includes numerous items such as family residences, the objects inside the home, and any family vehicles. Money from a pension plan (registered retirement savings plan, pension fund) accumulated during the marriage must also be divided.
Some things, however, are excluded, such as company shares and investments. The same goes for gifts and inheritances. As such, a marriage contract can determine which of these items are divisible in the event of death or divorce.
The main advantage of a marriage contract is to have a clear agreement between spouses. It’s easier to talk about it when things are going well—waiting until you’re in the middle of a divorce can make it harder.
A marriage contract is usually drafted by a notary and the spouses sign it in front of them. It is an opportunity to declare each spouse’s assets, clearly stating what each partner owned before the marriage and which will therefore not be divided. Keep in mind that when you sign a marriage contract before your wedding, it comes into effect on the day of the marriage. If you sign it after you’re married, it comes into effect on the day you sign it.
You can modify a marriage contract or sign a new one. Obviously, the concerned parties must be present and in agreement. Either way, your notary can inform you of the different legal and material consequences of the document.
In Quebec, there are three main types of matrimonial regimes.
If you like, your marriage contract can even allow you to create your own custom matrimonial regime under one condition: it must be legal.
In the absence of a marriage contract, the type of matrimonial regime depends on the date of your marriage. Couples married before July 1st, 1970, are subject to the community of property regime. Those married after that date are subject to the partnership of acquests.
Along with the division of property in the event of divorce, a marriage contract can include other clauses. Here are the two most common.
With that in mind, it’s a good idea to draft a will and think about how you want your patrimony to be divided when you die. That way you can stipulate that gifts be made to other people, name your executor, appoint a legal guardian for your dependent children, etc. You may also want to create a trust.
Whether you’re married or thinking about getting married, signing a marriage contract is always a good idea. You and your partner can discuss a variety of financial matters and come to an agreement. Signing a marriage contract is a good opportunity to figure out what’s best for each spouse and make choices based on your goals and values.
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