All About Estates

Marriage Contracts; The Importance Of Their Review In Estate Planning And “Consenting” Out Of Living Separate And Apart

In the context of estate planning, I constantly am reminded of the need for a proficiency in family law.  Here’s one reason why.

One of the key questions we ask clients is, “Do you have a marriage contract?”

The role of a drafting lawyer isn’t, in my view, to simply draft documents.  Rather, it’s to anticipate where issues may arise and ensure those issues are considered as part of the client’s estate plan.  The existence of a marriage contract is one of those issues that should make drafting lawyers alert to possible contractual obligations that may need to be satisfied on a client’s death.  Perhaps the marriage contract creates (i) obligations that are intended to be satisfied by your client during their lifetime, and (ii) obligations that are intended to be satisfied by the estate of your client, on their death.  Both of these obligations may need to be considered during the estate planning process to protect the estate (and the overall estate plan) from a claim by a spouse.  Such spouse may argue that your client’s obligations under the relevant marriage contract were not fully satisfied and therefore essentially are the responsibility of your client’s estate.  This is one of the reasons obligations created by a marriage contract are a relevant consideration in estate planning.

In reviewing a marriage contract, an interesting question arose.

Can a party contract out of one of the ways in which marriage breakdown is established under Canada’s Divorce Act[1] (the “DA”), specifically being the requirement under s. 8(2)(a) of the DA that “the spouses have lived separate and apart for at least one year immediately preceding the determination of the divorce proceeding and were living separate and apart at the commencement of the proceeding” (the “Requirement”).  The goal of contracting out of the Requirement being to facilitate separation and overall security for the estate plan.

A review of case law and legislation suggests that the Requirement may not be able to be contracted out of.[2]

Regarding case law, in Dupere v. Dupere[3] (“Dupere”), the New Brunswick Supreme Court found that spouses could not “elect to opt out of the marriage”, stating, “A mutual opting out in such circumstances would be little more than divorce by consent, something Parliament has not yet provided for.”  While the spouses in Dupere did not opt out of the Requirement through a marriage contact but rather were trying to consent to a divorce once married, the court’s reasoning that the government has yet to permit divorces by consent may apply in the context of a marriage contract. *I note that while Dupere is not an Ontario decision, the court was interpreting the DA, which is federal legislation.  Further, the decision was affirmed on appeal[4] and has not been overturned.  In addition, Ontario courts have not considered the issue of opting out of the Requirement in the context of marriage contracts.

Regarding legislation, the possibility that the Requirement may not be able to be contracted out of is supported by the fact that Ontario’s Family Law Act[5] (“FLA”) expressly provides a provision authorizing terms of domestic contracts to prevail over provisions of the FLA, unless provided otherwise in the FLA, and a similar provision does not exist in the DA.  Presumably, if Parliament wanted to permit divorces by consent, a similar provision to that in the FLA would appear in the DA (as supported by the statement in Dupere that Parliament has not yet provided for divorce by consent).

[1] (R.S.C., 1985, c. 3 (2nd Supp.)).

[2] This is my personal opinion and NOT legal advice.  Contact appropriate legal counsel for assistance with personal or client matters.

[3] 1974 CarswellNB 7, [1974] N.B.J. No. 24, 19 R.F.L. 270, 1 A.P.R. 554, 9 N.B.R. (2d) 554.

[4] 1974 CarswellNB 187, [1974] N.B.J. No. 169, 10 N.B.R. (2d) 148, 4 A.P.R. 148.

[5] R.S.O. 1990, c. F.3.

About Tamar Silverbrook
Tamar Silverbrook is an associate in the Trusts, Wills, Estates and Charities group at Fasken. Tamar’s practice is focused on domestic and international trusts, as well as wills and estate planning. Tamar works closely with clients and/or clients’ advisors to draft the appropriate documents to facilitate estate and business succession plans that fulfill clients’ unique objectives. This includes providing advice on probate planning, disability planning, charitable gifting, asset protection strategies, cross-border estates and tax issues, personal privacy, family law matters and the interpretation of trusts’ provisions and the corresponding scope of authority provided to trustees. Tamar also advises trustees in administrating a range of complex trust matters.

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