The marriage contract in Canada: What you need to know

The marriage contract materializes the agreements between the spouses. An optional but essential document, it evaporates doubts and dispels misunderstandings that could arise in the event of disagreement. It defines the management of household finances and dictates the distribution of property. Unaware of its importance, some couples hesitate to sign the paper. Understand the value of a marriage contract in Canada through these paragraphs.

What is a marriage contract?

A marriage contract is a legal act, but what does it really consist of? Let’s decipher it.

A notarized document

The place of the notary underlines the specificity of the Canadian marriage contract. The document is signed by the couple under his supervision.

The notary performs several functions. He or she advises the spouses on the drafting of the document. He or she modifies the document according to the situation and the decisions of the spouses. He or she specifies which assets will be shared and which will remain an individual property.

The notary bills his services according to his fees. In addition to the cost of his or her services, the notary charges for publishing the contract in the Register of Personal and Movable Real Rights (a government register that publishes rights to certain property). These fees explain the price of the marriage contract, which often increases.

You can also find a family law lawyer to help you understand your marriage contract and find the ideal matrimonial regime.

A legal document

The marriage contract is primarily a legal document signed by both spouses by an act of will. It sets out the principles governing the household budget and assets.

The contract is often confused with the marriage certificate. Their difference lies in their purpose. While the marriage contract describes the financial contribution and delineates the property of the couple, the marriage certificate serves as proof of the union.

The marriage contract is not a marriage licence. The marriage license is an official authorization issued by the registry office of your province. The marriage contract is optional.

A paper to be signed at any time

There is no law that requires a specific date to be set for the drawing up and signing of the marriage contract. You therefore have the choice between drawing up a marriage contract before or after the wedding. On the one hand, its elaboration before the ceremony does not imply any modification on the property of the spouses. Its broad outlines come into effect from the time of the marriage ceremony.

On the other hand, the contract signed after the marriage makes effective the provisions made from the moment it was signed.

What does a marriage contract contain?

In addition to the division of property in the event of divorce, the marriage contract contains a section devoted to donations and another dedicated to the will.

The matrimonial regime

3 matrimonial regimes exist in Canada:

  • partnership of acquests ;
  • separation of property
  • community of property.

The default regime, partnership of acquests, imposes a 50/50 division of the value of property accumulated throughout the marriage (otherwise known as acquests). It excludes the spouses’ own property, including property acquired before the union and received as an inheritance.

The marriage contract of separation of property refuses to divide the property collected during the marriage, with the exception of the family patrimony. Following a divorce, the regime allows the spouses to take their respective property, after having divided equally the property acquired during the marriage.

The community of property gives full power to the husband. The regime allows him to administer the common property as he sees fit throughout the marriage. Nevertheless, he accepts the wife’s intervention in the handling of complex matters. In the event of a divorce, the joint property is divided in an equitable manner.

Donations

Donations are gifts given to the spouse or children in the event of the husband’s death or during his lifetime. They are used to increase the inheritance of a particular child or partner. They apply to property attached to the donor’s estate.

The living spouse has the right to revoke last living gifts approved by the deceased. In all respects, the intervention of a notary will clarify the attribution of donations.

The testamentary clause

The testamentary clause deals with the distribution of property after death. It describes the last wishes of the deceased on an authentic act (signed and approved by a public officer) or a private act (made by the spouses).

The testamentary clause lists all of the deceased’s property to be given as an inheritance to the spouse. It may also provide for the distribution of property to persons outside the family circle.

The will sets out the distribution of property. It also designates the future guardians of the minor descendants of the deceased.

Why write a marriage contract?

The marriage contract sets out the intentions and expectations of the spouses on paper, hence its importance.

Having a choice about the matrimonial regime

The contract sets out the rules that will govern the life of the couple. The drafting of the contract allows the spouses to choose their matrimonial regime, including the method of separation of their property. If necessary, the notary can create a customized matrimonial regime that complies with the rules in force.

The contract also highlights the expectations of the parties involved. It is of the utmost importance in the event of a divorce. In this context, communication becomes more complicated, but the document reminds us of the basics of property division. No marriage contract means a complicated divorce.

Defining the provisions in the event of death

Throughout the marriage, the family assets of the household accumulate and increase in value. It includes the couple’s property and assets, such as:

  • residences ;
  • vehicles; and
  • furniture; and
  • money related to pension plans.

It does not include shares in an entity, assets acquired before the marriage, TFSAs (Tax-Free Savings Accounts) or specific investments.

The contract may also contain the “contractual institution”, also known as the “last survivor” clause. This clause requires that all assets be paid to the surviving spouse in the event of the spouse’s death. It plays an essential role in the absence of a will.

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