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HomeMy WebLinkAboutThe Citizen, 1987-02-04, Page 18PAGE 18. THE CITIZEN, WEDNESDAY, FEBRUARY 4, 1987. = <T7 Partners should understand terms of a marriage contract Marriage contracts - legal doc­ uments specifying who gets what property and maintenance when a marriage ends - will become the norm in Ontario as one result of the new and far-reaching Family Law Act, some lawyers say. I he reason, they say, is thatsuch a contract enables the separating couple to avoid the consequences of the new law, which, on marriage breakdown, requires the equal sharing of all assets, including business assets, acquired during the marriage. Of course, the contract holds whether a legal marriage or a com mon-law relationship is involv­ ed, and will cover marriages that end because of the death of a spouse, as well as separation. “This act will apply to every married person in the province, either when they’re alive or after they go,’’ says Lome Wolfson, a civil litigation lawyer in Toronto whopracticcsextensively in family law. Mr. Wolfson says the act takes precedence over a will, when it comes to dividing the assets of a marriage when one spouse dies. But a marriage contract enables a couple to “opt out” of the act, so t hat the wishes of a testator in his or her will won’t be frustrated by the new law, he explains. Marriage contracts were also available in the old act so spouses could opt out of its property division and maintenance sections when a marriage dissolved. Under the old law, only family assets acquired during the marri­ age - such as the matrimonial home, cars and cottage - were subject to an equal division when a marriage broke up. One spouse, usually the wife, would have to ask a court to give her a share of the other spouse’s business assets, but there was no guarantee she’d get it. Butunderthenewact, all assets, including business assets, invest­ ments and pensions, acquired during the marriage by either spouse, are subject to equal division, as is the growth in value of assets brought in the marriage by either spouse. And the matrimonial home, even if brought into the marriage by one of the spouses, is always subject to equal division. The Canadian Bar Association - Ontario thinks the law has such wide implications it scheduled a special two-day seminar on it for lawyers last year. Family-law solicitors attending were given seven papers totalling hundreds of pages on different aspects of the law, ranging from its basic ideas to domestic contracts and estate planning. Mr. Wolfson has prepared his own paper on the law, in which he predicts that marriage contracts will become as common as wills. Attorney-General Ian Scott isn’t so sure, but does think the law will force people to examine the economic consequences of marri­ age more closely. “You’ve got to approach marri­ age or cohabitation conscious of the economic responsibilities you’re undertaking and they are more onerous than they used to be,’’ he says. The government, however, doesn’t expect people will need to acquire economic degrees to figure out how the act works, he says. In any event, some people “are so romantically inclined (when they marry) they wouldn’t consider economic considerations if you blew it in their ear,’’ Mr. Scott says. Here ’ s how the division of assets is to work in a situation where there is no marriage contract: The key phrase in the law is “net family property,’’ or NFP, which is defined as the value of all property owned by a spouse on the valuation date, which is defined as the date of separation or divorce, or the day before the death of a spouse. Such things as a spouse’s debts and liabilities and property other than the matrimonial home brought into the marriage are deducted from that spouse’s NFP. Also excluded from the NFP is property acquired during the marriage by a spouse by way of a gift or inheritance, damages a- warded by a court for injuries or for compensation for the loss of a relative, and the proceeds or the right to the proceeds of a life insurance policy. On a marriage breakdown, each spouse adds up the value of his NFP; the spouse with the smaller amount is entitled to cash or property equal to one-half of the difference between his total and the other spouse’s total. For example, if one spouse has anNFPof $50,000 and the other $100,000, the spouse with the lesser amount is entitled to $25,000 from the other spouse. When one spouse dies, the situation becomes a little more complicated. If there is a will, the surviving spouse has the choice of applying for the assets under the law, or under the will, but not both. At Total Approach we offer a complete range of services to make your wedding day as special as it should be. •Facials •Manicures •Wax Depilation •Make-up •Lash Tinting SPECIAL BRIDAL PARTY MAKE-UP PACKAGES ‘ Give a gift certificate Call Brenda Lalonde Certified Aesthetician This, says Mr. Wolfson, will lead to situations where the surviving spouse will have to calculate which method provides the greater bene- fit and could lead to some real problems. If a wealthy spouse dies, leaving his entire estate to his children by a previous marriage, the surviving spouse has the right under the law to some of the estate. 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