Prenuptial Agreement in Ontario: What It Can and Cannot Cover

If you are drafting a prenuptial agreement, you probably have a list of things you want to settle: who keeps what, how debts are handled, what happens if you separate. Some of those wishes fit comfortably within Ontario law. Others do not.

In Ontario, the legal name for a prenup is a marriage contract. This article sets out what the Family Law Act allows it to cover, what is off limits, and where courts keep the power to step in.

What the Act lets you cover

A marriage contract may deal with ownership in or division of property, support obligations, and any other matter in the settlement of the couple's affairs. The agreement can address rights and obligations during the marriage, on separation, on annulment or dissolution, or on death.

• Ownership of and division of property.
• Support obligations.
• Other matters in the settlement of the couple's affairs.
• The right to direct the education and moral training of the couple's children, though not decision-making responsibility or parenting time.

Property and debts

Without a contract, the default rules calculate each spouse's net family property: what a spouse owns on the valuation date, after deducting debts and other liabilities and the value of property owned on the date of marriage, other than a matrimonial home. A spouse with a negative result is treated as having zero.

A contract can change this. Property that the spouses agree by a domestic contract is not to be included is excluded from net family property. Some property is excluded even without a contract, such as gifts or inheritances from a third person received after the date of marriage (other than a matrimonial home), personal injury damages and life insurance proceeds.

A special case is a matrimonial home owned before marriage, or gifted or inherited. Without a contract, Ontario's guidance says its full value must be shared unless the spouses agree otherwise. Whoever claims a deduction or exclusion has the onus of proving it.

Support: you can address it, but courts can step in

A marriage contract may deal with support obligations. However, a court may set aside a support provision or waiver on three grounds: it results in unconscionable circumstances, it favours or is waived by a dependant who qualifies for support out of public money, or support under the contract is in default when the application is made.

For divorcing spouses, the federal Divorce Act also treats an agreement about support as a factor the court weighs, not a bar to support. Unmarried partners can claim spousal support in certain cases, for example after three years of continuous cohabitation.

What is off limits

On child support, a court can award an amount different from the guidelines in limited situations, such as where special provisions in a written agreement make the guideline amount inequitable, or with both parents' consent if reasonable arrangements are made.

The matrimonial home

A property is a matrimonial home if the spouses ordinarily occupy it, or occupied it at separation, as their family residence. Both spouses have an equal right to possession, whoever owns it. A spouse generally cannot sell or mortgage an interest in it without meeting a listed condition, such as the other spouse's consent or a court order.

Ontario's government says contracts can cover who moves out of the home. Even so, a term limiting Part II rights is unenforceable, and a court may order exclusive possession to one spouse. If only one spouse has an interest in the home, the other spouse's right of possession ends when they stop being spouses, unless a separation agreement or court order says otherwise.

What to do next

• Write down what you want to settle, then sort it into property, debts, support and everything else.
• Set aside anything about parenting time or decision-making for children; the contract cannot decide it.
• Do not rely on terms that limit matrimonial home rights.
• Disclose significant assets and debts fully, since non-disclosure can lead a court to set the contract aside.
• Have the final document written, signed and witnessed. Ontario's government also advises that each of you speak to a different lawyer and that you exchange financial information before signing.

Frequently asked questions