A postnuptial agreement is a marriage contract entered between married spouses after the actual marriage. The Family Law Act permits parties contemplating marriage or who are already married to enter into a domestic contract governing certain aspects of the relationship. When the contract is entered into after marriage that would be a postnuptial agreement.

It is generally less common for married couples entered into an agreement after marriage, typically these contracts are presented prior to marriage but there are circumstances where a contract during marriage can be advisable or quite reasonable. A circumstance, for example, if one of the spouses is about to inherit some money and they might be intending to put some of those funds into the matrimonial home. Normally, under the Family Law Act, if you receive an inheritance during the marriage and you use those funds to pay down your mortgage or improve your home, you will not be able to claim those funds as excluded property if you separate from your spouse under the Family Law Act. To prevent that potentially unfortunate outcome, you would be well advised to ask your spouse to enter into a marriage contract at the time that you received the funds so that it’s clearly recognized that those funds will be excluded in the event that there is a separation. Another circumstance that I’ve come across fairly regularly is that of the family cottage. Again these are often passed on from generation to the next and if received during the marriage and commonly used by the family, it can qualify as a matrimonial home and the exclusion of the gifted property would not be allowed under the Family Law Act. This would be another case where marriage contract would be advisable. Other reasons for a marriage contract is if one of the parties has a business, perhaps there are other owners in the business, and they wish to exclude that asset from a potential legalization claim. A marriage contract can be customized, there’s no particular “one size fits all” formula, and it’s very specific to the needs of the particular parties.

You should know however that there are certain issues that cannot be set out in a marriage contract. You cannot agree in advance in a marriage contract with respect to custody and child support, those will be always be determined on the merits of the time of separation. You can however detail very specifically rights and obligations pertained to property and spousal support; if done properly these contracts are enforceable by the courts and only in very limited circumstances can they be successfully challenged. The formalities of a marriage contract are that it must be in writing, signed, witnessed and dated; those are the basic formalities. It is also necessary in my view to ensure forcibility, that either parties have independent legal advice or it’s clear that they’ve had the opportunity to obtain independent legal advice and moreover that there’s been proper financial disclosure at the time that the contract was negotiated and finalized. That financial disclosure is usually appended to the contract so there’s a record of what the parties claimed they had at that time and there’s no ambiguity.

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