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HomeIssues2020 - Winter EditionALL’S WELL THAT ENDS WELL: Marriage Contracts for Peace of Mind

ALL’S WELL THAT ENDS WELL: Marriage Contracts for Peace of Mind


When we think of families and loved ones, the word “contract” rarely comes to mind. Close relationships are, however, subject to agreements, understandings, and negotiations about how we are expected to behave, and how we expect others to treat us. In these relationships, we are subject to obligations and entitlements that are usually unspoken, and simply assumed. Of course, in the legal world, assuming anything is discouraged. This is especially true for people who are planning marriage. 

At the beginning of a romantic relationship, often couples discuss their expectations for a variety of things: children, finances, work, things that will shape their lives together. Not surprisingly, couples rarely discuss their expectations for a future separation, yet the divorce rate in Canada hovers consistently around 50%. Couples often tell me that discussing a cohabitation agreement (or “prenup”) is not romantic, and implies that they don’t believe the marriage will last. After referencing the above divorce statistic, I explain to them that in many ways, marriage is like a business, and business partners need to plan for the end of their partnership, even if they think the business will last forever. 

A marriage contract or cohabitation agreement, (commonly called a “prenuptial agreement” in the U.S.) is a contract that lays out specific guidelines for how a couple will divide their assets in the event of a divorce or separation. I tell clients that this agreement is the most insurance they can have to protect their financial interests from being pulled out from under them by their ex-spouse during a separation or divorce. A couple who is not yet married can enter a cohabitation agreement to protect their real estate, investments, and other property. If the couple gets married, the cohabitation agreement automatically becomes a marriage contract. If the couple wishes to change any part of their agreement, it is simply a matter of them signing an amendment. 

As we know, some marriages do end. Couples who prepare an agreement have half the work done already. The agreement can save a lot of time and money for people as they get the details finalized for their separation. The agreement can also be used as proof that certain assets are to remain in the ownership of one spouse, and are not to be subject to sharing with the other. For example, if one person owns a rental property in their sole name, they may want to ensure that the rental property always remains their asset and is never shared with a spouse. Another common example is when one of the spouses already owns a home that the couple will live in. The spouse who owns the property may want to ensure that their initial down payment is protected in the event of a divorce or separation. Business assets such as a corporation or professional practice can also be addressed in a cohabitation agreement, along with terms related to spousal support (“alimony”), pensions, investments, and even how the couple will share household expenses during the relationship. A cohabitation agreement can also provide a formula for how couples will treat assets that they have yet to acquire. Ultimately, the most frequent philosophy of a cohabitation agreement is that each party takes out of the relationship what they bring in, proportionate to the investment they each make. 

When a relationship comes to an end, it’s helpful to have some certainty about how things will play out. Attending to these agreements can save both spouses a lot of emotional stress and money in the event that the marriage does break down. It’s a small price to pay for significant peace of mind. 

Kristina Tesser
Kristina Tesser
Kristina Tesser is an associate at Johnson McMaster practicing in the areas of real estate, wills and estates, and uncontested family law. Kristina’s real estate practice focuses on residential purchases and sales, mortgages, re-financing, and transfers of title. She particularly enjoys helping new home buyers navigate the legal aspects of their first home purchases. Kristina’s background as a licensed funeral director provides valuable insight when assisting clients with their wills and powers of attorney, and other estate planning issues. Kristina understands the importance of providing guidance and protection for your loved ones through an effective and clearly written last testament. Kristina’s family practice focuses on assisting clients with simple, uncontested matters like co-habitation agreements (“pre-nups”) and separation agreements. Kristina’s former experience as a litigator in and out of the courtroom is invaluable when assisting clients in negotiating legal resolutions through their separations. Once a strong separation agreement is in place, Kristina can assist you with completing your divorce. Kristina received her honours bachelor specialist degree in History and Political Science with high distinction from the University of Toronto at Mississauga. Kristina then studied law at the University of Toronto where she received her Juris Doctor degree in 2012. She was called to the Ontario Bar in 2013. While in law school, Kristina worked at Downtown Legal Services as a department leader in Family Law. She articled in the Waterloo office of a national law firm and practiced family law litigation for the same law firm for several years. Kristina joined Johnson McMaster in late 2014. In October 2018, Kristina was elected to serve the people of her hometown of Milton as their local town Councillor and has been active in community advocacy and policy as part of her new political role. In her free time, Kristina enjoys spending time with her husband, Chris, their four children, and basset hound, George. She is a travel lover, jazz music fan, and an avid baker and hiker.

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