Domestic Contracts
Domestic Contracts are signed by couples who want to agree upon a variety of issues at different stages of their relationships. The Family Law Act has various sections related to Domestic Contracts, of which there are three categories: cohabitation agreements, marriage contracts and separation agreements. These contracts must be in writing and must be signed by each party and witnessed. Like other contracts, the parties to these contracts must each be at least 18 years old and must have the mental capacity to contract.
People who sign Cohabitation Agreements and Marriage Contracts (sometimes referred to as Prenuptial Agreements or Prenups) usually do so to deal with financial matters between the couple while they live together and/or if the relationship breaks down. Although nobody wants to think about a possible break up when the relationship is doing well, these agreements just as often help couples maintain positive relationships by outlining what each person expects.
If you have assets or income to protect, or if your partner raises the issue with you of signing a Domestic Contract, you need the independent legal advice of a Zeidman family lawyer to help you understand what’s at stake in negotiating and signing a Domestic Contract.
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Cohabitation Agreements
A couple who are not legally married but who are cohabiting or who intend to cohabit with one another can sign a Cohabitation Agreement. This is governed by section 53 of the Family Law Act. The term cohabit means living together as spouses whether you are legally married or not. If a couple who signed a Cohabitation Agreement subsequently gets legally married, the Agreement automatically becomes a Marriage Contract by operation of section 53(2) of the Act.
The types of issues people commonly deal with in Cohabitation Agreements include:
- obligations for financial contributions or expenses during the relationship
- ownership and/or division of all property and assets, or specific assets
- obligations for separate or joint debts
- options to purchase or sell specific property and assets
- obligations for financial support
- what happens if a spouse dies
- the right to direct education of children (but not the right to custody or access)
Zeidman family lawyers can help you prepare a Cohabitation Agreement to deal with these issues, or we can help you understand an Agreement that your spouse is proposing.
Marriage Contracts
A legally married couple or one who intends to get married can sign a Marriage Contract. This is governed by section 52 of the Family Law Act. A Marriage Contract can deal with the couple’s rights and obligations during the marriage, after separation, in the event of an annulment, or if one of the spouses dies.
A Marriage Contract cannot limit rights of possession to a Matrimonial Home or other rights to a Matrimonial Home outlined in Part II of the Act. However, a Marriage Contract can deal with certain ownership or division issues related to Matrimonial Homes. For example, a Marriage Contract can exclude the value of a Matrimonial Home in whole or in part when calculating a division of assets on separation, if that is what you want.
The types of issues people commonly deal with in Marriage Contracts include:
- obligations for financial contributions or expenses during the marriage
- ownership and/or division of all property and assets, or specific assets
- obligations for separate or joint debts
- options to purchase or sell specific property and assets
- obligations for financial support
- what happens if a spouse dies
- the right to direct education of children (but not the right to custody or access)
Zeidman family lawyers can help you prepare a Marriage Contract to deal with these issues, or we can help you understand a Contract that your spouse is proposing.
Separation Agreements
A legal separation for a married or cohabiting couple occurs if there is no reasonable hope of reconciling the relationship. It only takes one person to come to this conclusion for there to be a separation. It is not necessary for you and your spouse to live physically in separate residences. A separation can occur if you and your spouse are living independent lives even in the same home.
Separation Agreements are the most common Domestic Contracts. Under section 54 of the Family Law Act, Separation Agreements can deal with any matter in the settlement of a couple’s affairs, including custody and access to the children and including possession and other rights under Part II of the Act. Please see our Separation Checklist for the types of issues commonly dealt with in Separation Agreements.
Separation issues are increasingly complicated. Division of spouse’s pensions as assets, imputing income for support purposes, depletion of assets or income before and after separation, and establishing detailed and appropriate custody and access provisions are just some examples. It’s crucial for you to have the right lawyer to help you through the process, to avoid mistakes, and to protect your rights and/or your children.
Zeidman family lawyers can help you through the process of negotiating a Separation Agreement to deal with some or all of the outstanding issues between you and your spouse, whether you have already verbally agreed on some issues or not. We also can help you understand whether an Agreement proposed by your spouse is fair in the circumstances.
Setting Aside Domestic Contracts
Any Domestic Contract that has provisions related to the right to direct education or moral training of children, or custody or access issues, is subject to the court’s discretion to disregard such provision if it is not in the best interests of the children (see section 56(1) of the Family Law Act). In the same vein, any clauses related to child support are subject to the court’s discretion to disregard it if it’s unreasonable in light of the Child Support Guidelines.
Even if a Domestic Contract meets the technical requirements of the Family Law Act, the Act empowers a court to set aside a Domestic Contract (i.e. declare it to be invalid) upon receiving an application to do so. There are three grounds under section 56(4) of the Act for setting aside a Domestic Contract:
- a party didn’t disclose to the other party significant assets or debts that existed when the contract was prepared;
- a party didn’t understand the nature or consequences of the contract; or
- for grounds available under general contract law (for example: duress, undue influence, repudiation, unconscionable, lack of capacity, etc.).
Section 33(4) of the Act also empowers the court to set aside provisions of an Agreement related to spousal support or a waiver of spousal support on three grounds:
- the provision results in unconscionable circumstances;
- the provision results in a prospective support receiver having to rely on social assistance; or
- if there is default in support payments when the court application is filed.
Given the court’s power to set aside all or part of a Domestic Contract, you should ensure that things are done properly when you have an Agreement prepared. Zeidman family lawyers can help you through the process and ensure that your rights are protected.
