A marriage contract is an agreement signed before or after a wedding that provides a private and custom-made set of rules for dividing the couple's property should they separate and divorce or die. In fact, a marriage contract can overlap in many of its functions with a Will. A cohabitation agreement is essentially the same thing as a marriage contract, but it's designed for people who intend to live together -- or who are already living together -- who wish to set out some rules to govern any separation that they may experience. A cohabitation agreement is automatically converted into a binding marriage contract if the couple gets married. Marriage contracts and cohabitation agreements can also establish some rules and regulations for how the couple manage their day-to-day marriage, not just their separation.
In every Canadian province, marriage creates an economic partnership, the fruits of which will be divided between the husband and the wife should they decide to separate and divorce -- unless a couple agrees otherwise in a marriage contract.
A marriage contract allows couples to opt out of provincial law with respect to property. A marriage contract, if drafted and signed properly, is legally binding. In order to have a properly drafted and executed agreement, you must follow four simple rules:
Michael Cochrane is a lawyer with Ricketts, Harris in Toronto and the author of For Better or For Worse: The Canadian Guide to Marriage Contracts and Cohabitation Agreements (John Wiley & Sons).