Lauren Walker, Family Law Associate
Valentine’s Day is a great time to reflect on our romantic relationships. For those who may be taking their relationship to the next level – such as by moving in together or even considering marriage – it will become increasingly likely that you and your partner will begin to share property and household financial responsibility.
Many couples do not choose to make a domestic contract, likely because nobody wants to think about the pitfalls of navigating a separation while the relationship is going well. Other couples may not think that there is any benefit to creating such contracts or may not understand the inherent value of the financial disclosure process. Unfortunately, this common misconception is highly problematic and can often lead to difficulties later on in the relationship which could have been avoided had the parties considered a domestic contract earlier on.
As a family lawyer, I know all too well the value of a well-drafted domestic contract. In the event of a breakup, the couple with a contract will be much more prepared, having their respective rights and obligations pre-planned. The domestic contract is like an emergency manual: you may never need it, and you hope to never need it… but if a time comes when you do need it, having a domestic contract in place will prove to be absolutely invaluable for both parties.
Of course, not all domestic contracts are equally valuable. No contract is truly immune from one of the parties claiming that the contract should not be enforceable. That said, these kinds of claims is much more easily rebutted if both of the parties were conscientious about the drafting and execution of their domestic contract at the time that it was first created.
A good domestic contract will include accurate and thorough financial disclosure. Completing financial disclosure for a domestic contract confirms that both of the parties were aware of the other party’s financial situation at the time that the contract was signed. Further, the domestic contract can serve as a useful record of the personal property of each party at the date of marriage or cohabitation.
The latter is especially useful because it becomes much harder as times goes on to remember – or prove- what each party had coming into the relationship. Having a domestic contract in place can help to ease that burden for both parties involved.
Couples who want to create a domestic contract must be committed to understanding what they are signing. Each party has a responsibility to ask questions, and in turn, each party has a responsibility to provide accurate and honest answers.
In my practice, I recommend that couples talk to each other about their financial situation and become comfortable asking (and answering) financial questions sooner rather than later. While these types of conversations may seem foreboding, they do not have to be. Rather, having these conversations can act as a healthy exercise in communication, can serve as a forward-thinking way to check in on the status of the relationship, and can help to ensure that both parties share similar financial goals and perspectives.
The sample questions provided below are a good start because these are what would be asked of each party (and required) in a litigated separation.
- What is your income?
- What are your current expenses?
- Do you have investments?
- What items do you own together?
- Do you have any debts?
- Do you have benefits with work?
- Do you have a pension plan?
- What would you do if you lost your job?
Understanding your partner’s financial situation and perspective (as well as your own) will help you both to make a valuable domestic contract. When both parties collaborate in creating the domestic contract, the final executed document will much more accurately reflect the shared values of the couple. Hopefully, the parties will never need to fall back on the domestic contract; but it is always smart to be prepared.
If you would like more information or assistance with this type of issue, please reach out to Lauren Walker or contact Lister Beaupré LLP directly by phone at 613-234-2500 or by email at email@example.com.
*Note: This post does not address situations where parties have children and/or other support obligations. It is always wise to consult with a lawyer for assistance with your specific circumstances.