Should you have a marriage contract?
A marriage contract can sound like one of the most unromantic and uncomfortable topics to discuss with your partner.
However, the fact is that the benefits of having a marriage contract can far outweigh the challenges of an awkward conversation – particularly if you fall into certain groups.
You are a business owner
Owning a business comes with a great deal of responsibility to others, from your employees to your customers. Without taking steps to protect it in a marriage contract, the fate of the business and those affected by it can be in jeopardy.
Depending on factors like whether you and your spouse or fiancé are partners or whether it is a family business, you can specify what will happen to the company in a divorce. You can decide rules for things like categorizing the business and detailing methods for valuation and division.
You have kids from a previous marriage
Suppose you are getting married for a second or subsequent time and have children from previous marriages. In that case, a marriage contract can ensure your children can keep a specific property in the event of a divorce.
Without an agreement, money or specific property you had hoped to set aside for your kids can wind up with your spouse in a divorce.
You want to set your own rules
A marriage contract allows spouses or soon-to-be-spouses set their own rules for handling difficult decisions. Reaching an agreement on financial matters before they ever arise and when you are both on the same page can help you resolve any issues that may occur in a divorce.
A valid marriage contract can be a valuable tool to provide stability and guidance during an unpredictable and tumultuous time.
You have substantial or disparate assets
If one or both of you have significant funds or property, protecting them and your rights to them in a marriage contract can be vital. You can address issues like how and if you will divide the fruits of your economic partnership, as well as debts, and what financial options the lower-earning spouse will have.
Having a marriage contract is not mandatory, but it can prove to be a valuable tool if you fall into any of these categories.
But let us end with a cautionary note: While having a marriage contract is preferable in many situations, there is such a concept as making ‘too good a contract’. If the contract is lopsided in favour of one spouse (particularly re spousal support), then it is entirely possible that a court in later years may not uphold the contract’s terms. Consult with a competent family law lawyer first.
