4 Reasons why you should have a Marriage Agreement
The experience of new love is one of life's highest pleasures. In the early stages of the relationship, new couples feel a rush of enjoyable emotions: love, deep affection, commitment, and excitement for life with one another. Love happens to young and old, and all have happy endings in mind when they choose to build a life together.
Many new couples do not realize the impact a future separation could have on their assets and finances. When two people find love later in life, they have different circumstances and responsibilities than those of a young couple. Some have grown children from previous relationships, and some have accumulated significant assets prior to meeting their new mate. Others want to structure their lives and finances as a couple in a less traditional manner. Couples benefit greatly from having an agreement in place that deals with property and other assets they brought into the marriage and assets they acquire during the relationship in the event of separation.
This type of agreement is called a Cohabitation Agreement or Marriage Agreement. These agreements are frequently referred to as "Prenups." In British Columbia, Cohabitation Agreement is the term used for couples who are in a common-law marriage relationship, whereas Marriage Agreement is the term used for couples who are legally married. The contents of these agreements are otherwise the same.
Setting out expectations and making an agreement about spousal support and division of property and debt at the beginning of the relationship ensures there are no surprises should the relationship end. Without this, the provisions of the British Columbia Family Law Act will automatically apply, and the results can be drastically different than what either party expected.
Cohabitation Agreements and Marriage Agreements can be made at the beginning of a relationship or at any time during the relationship.
Read on for 4 key reasons to have a Marriage of Cohabitation Agreement in place before mid or late-life re-partnering.
1. Plan for Success
While a marriage agreement sets out what would happen upon the breakdown of a relationship, it also stipulates what will happen to each spouse's estate if they are together ‘until death do them part'. These agreements permit spouses to leave gifts for each other in their wills, but commonly include a waiver where both agree not to contest each other's wills or make a claim against the estate of the other. Spouses can also customize the treatment of income and expenditures during their relationship in these Agreements. It is helpful for the spouses to set out their intentions as early in the relationship as possible to ensure they have communicated clearly how for day-to-day expenses will be paid.