The New York Daily News reported on December 9, 2010 that there were reports that Jessica Simpson would be signing a pre-nuptial agreement prior to her marriage to former NFL-star Eric Johnson. It is has also been reported that prior to her marriage to Nick Lachey, the couple did not sign a pre-nuptial agreement and this could have cost her millions of dollars.
What if the two were marrying in Ontario?
In Ontario, pre-nuptial agreements are known as marriage contracts. Pursuant to s. 52 of the Family Law Act, two people who are married or intend to get married can enter into a contract in which they agree on their respective rights and obligations under the marriage or on separation. The contract can deal with issues such as:
- ownership in and division of property;
- support obligations;
- the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and
- any other matter in the settlement of their affairs.
With respect to Jessica and Eric, they can agree to how they will divide their property if they were to divorce in the future, which party would owe support (if any) to the other, and any other matter which they feel would assist them in settling their affairs upon separation.
It should be noted that while the two can agree on the upbringing of their children, they are not allowed to agree in a marriage contract on who would have custody of and access to any children they may have in the future. Furthermore, they are not able to agree in their marriage contract on the limiting of either of their rights to the Matrimonial Home. If there was a clause which was put into the contract limiting the rights to same, it would be unenforceable.
Looking to the future, and the potential that the couple decides to separate, either party may apply to the court to have the contract set aside for one of the following reasons:
- a party has failed to disclose to the other significant assets or debts that existed at the time the contract was entered into;
- a party did not understand the nature or consequences of the contract; or
- for general reasons such as undue influence, duress, mistake, etc.
In the event that the agreement is set aside in the future, this matter would be dealt with by the Court as if there was never a marriage contract in place. Therefore, before Jessica and Eric sign their marriage contract, it would be prudent that they ensure that, to the best of their ability, the above will not cause them problems in the future.
Often when parties have marriage contracts in place and they attempt to have them set aside, they may argue that specific clauses were not clear enough or they did not understand their consequences when signing the contract. In these situations, the Court must look for an interpretation that is in accordance with the parties' intention at the time the contract was signed. Furthermore, if there is an interpretation that would produce a result that the parties would not have reasonably expected at the time they entered into the contract, then that interpretation should be rejected.
Again, for Jessica and Eric, the more clear and specific they can make their contract, the better it will be in the future should they separate and seek the assistance of the Court in interpreting what portions of their contract means for them on the Date of Separation. You may find further information on marriage contracts on our website.