6 TOPICS TO INCLUDE IN YOUR MARRIAGE AGREEMENTJul 17 2014
In an earlier blog post, we discussed how a marriage agreement can strengthen your marriage. In this post, we cover what you and your future spouse might want to include in your agreement.
If you or your future spouse will be bringing a disproportionate amount of assets to your marriage, then you should plan how these assets, and the income generated by them, will be handled during the marriage and if the marriage ends.
For example, will you retain sole ownership of your assets once you’re married? Will you retain sole ownership if you divorce? If you agree to divide your assets with your spouse, what portion will he/she receive? Will the portion increase as the marriage endures?
You can also use a marriage contract to define ownership of special items, such as artwork and family heirlooms.
2. Income and Windfalls
Earnings are another item typically included in marriage agreements. Will you and your future spouse share joint accounts, or keep your income separate?
The Family Law Act excludes financial windfalls, such as inheritances and insurance settlements, from division. However, you can use a marriage agreement to include an understanding of how you and your future spouse would handle a windfall.
3. Debts and Expenses
A marriage agreement should also state who is responsible for repaying debts accumulated before the marriage. Will you both contribute to repayment during the marriage? What happens if you divorce?
Similarly, you should also include responsibility for household and family expenses. Are you and your future spouse equally responsible for expenses? If so, what happens if one of you stays home to look after your children? What happens if one of you loses your job? A marriage agreement can stipulate how you and your future spouse will handle these financial challenges before they happen.
4. Business Provisions
If you or your future spouse own your own business or are a partner or shareholder in a family business, you should include provisions in your marriage agreement about ownership of the business. Will your future spouse assume part ownership of your business? If so, what portion? What happens if you divorce? Will you opt out of the provisions of the Family Law Act that require equal division of any increase in the value of the business?
5. Child Support
If you’ll be creating a blended family with your future spouse, you should both be clear on your financial and parenting responsibilities for the children during (and potentially after) the marriage. Will the children live primarily with you and your spouse, or with the other parent? Will you be liable for child support if you separate or divorce?
6. Spousal Support
You and your future spouse can agree in advance whether one of you will pay to support the other for a period of time if the relationship breaks down. You should consider whether you plan to have children, and whether one of you will stay home with those children. Without an agreement in place, you may end up negotiating spousal support at a time when relations are acrimonious and money is tight.
By discussing these six topics, and including them in your marriage agreement, you and your future spouse can plan and agree, in advance, how you’ll handle difficult situations that arise. You won’t worry or disagree about who owns what, who’s responsible for what and what will happen if circumstances change. In turn, this discussion and agreement can bring certainty, stability, understanding and even greater longevity to your marriage.