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People who marry later in life and have accumulated assets (or debts) or are entering second marriages and have experienced the process of an acrimonious division of assets, are among those who may benefit most from a marriage contract. The question often posed is, ‘Will this contract actually protect my assets or income?’

This article discusses the Supreme Court of Canada decision in Hartshorne v. Hartshorne (2004). In that case, the wife (a lawyer) entered the marriage with no assets but with debt. The couple had one child before marriage and another after. The wife stayed home to care for the children. The marriage contract, signed on their wedding day, provided that the husband’s assets would not be shared with the wife ($1.6 million at the time of marriage), but that she would receive a share in the matrimonial home, and spousal support. She received independent legal advice that the agreement was one sided, but signed anyway. Upon separation, she was entitled to property worth $280,000 (plus support) and he was entitled to property worth $1.2 million. The SCC upheld the contract. Both parties were lawyers; both had independent advice; the wife knew the consequences of disrupting a career to care for children and had made that decision before the marriage; and the husband (a lawyer) was in a position to provide support according to the terms of the agreement.

It is important to note that although the agreement favoured the husband, it was not completely one sided: the wife did receive support and some marital assets. The net property difference between the statutory regime and the marriage contract was around $400,000.

The message from the Supreme Court of Canada appears to be: if the agreement is otherwise valid and there is no undue pressure or unconscionability, and the result is what the parties envisioned when they signed the contract, “a deal is a deal”.

Read the article here.

 

Take away:

  • As long as there is no undue pressure or unconscionability, courts may be willing to uphold a valid marriage contract, even if it is one-sided.

 

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