Let’s have a quick look at the difference between cohabitation and marriage.
Take a relationship of twenty years, with spouse A having owned the house before cohabiting or marrying, and spouse B sacrificing part or all of a career to raise the children. While obviously a gross generalization, this sort of situation is quite common.
In my jurisdiction (Ontario), if the couple had cohabited for all those years without marrying, then spouse B could be tossed out on the street with no notice by spouse A, and with no right to a share of the house.
However, if the couple had married, then spouse B could not be tossed out on the street, and would have a 50% share of the house.
This is the primary difference between marriage and cohabitation in my jurisdiction. Marriage ensures the protection of property rights which cohabitation fails to protect. There is movement toward correcting this, but as the law stands today, marriage provides protection of property rights which are not protected in identical circumstances where the parties cohabit without marrying. Quite simply, marriage is a contract which sets out property rights. A pre-nuptial contract simply allows the parties to define the property rights as they together see fit, rather than force the government’s property regime down on them. It is not a question of whether or not to form a contract, but rather whether the parties or the government should make the terms. Let’s be very clear about this. A domestic contract does not introduce property rights to a marriage. Property rights are already part and parcel of a marriage, regardless of whether or not there is a domestic contract. The domestic contract simply lets the spouses decide the terms rather than the government decide.
Now let’s look at how marriage affects the property rights of two equal people.
Both spouse A and spouse B go into the marriage already each owning their own houses, worth $100K each. They marry, move into spouse A’s house, and sell spouse B’s house. In my jurisdiction, if they were to separate, then spouse A would get half the marital home, totalling $50K, and spouse B would get all the cash from the sold house and half the marital home, totalling $150K. By virtue of marriage and the government’s rules which must be followed on marriage breakdown, party A has lost $50,000 and party B has gained $50,000 simply because the couple had to live somewhere. A marriage contract can prevent this by putting the parties’ rules in place rather than the government’s.
Now let’s look at whether a marriage contract is necessarily one sided. The contract is made between two parties who both have the ability to negotiate. If a mutually acceptable agreement cannot be made, then there are two defaults short of going separate ways. First, the couple can marry without a marriage contract and abide by the government’s terms concerning property. Second, the couple can cohabit without marriage and again abide by the government’s terms concerning property, albeit different terms than set out for marriage. If the government’s terms concerning marriage are acceptable to both parties, then there is no need for a pre-nuptial contract. If the government’s terms concerning cohabitation are acceptable, then neither a marriage nor a cohabitation agreement is necessary. If, however, neither of the government’s schemes are acceptable, then the only solution is a domestic contract. This has nothing to do with one of the spouses trying to beat out the other in anticipation of relationship failure. It is simply a matter of the spouses together trying to find terms that work for them. When one spouse starts misusing domestic contract negotiations to take advantage of the other, then that other’s lawyer will start jumping up and down, crying “Dump the dodo!” In this sense, the negotiation of a pre-nup or cohab can help the parties work toward an open and honest relationship which is not based on power imbalances, and identify early on before it is too late if they should commit to the relationship. This is of particular importance when it is anticipated that one spouse will sacrifice income and career opportunities so as to be the primary care giver.
Let’s for a moment look at what usually happens in a marriage breakdown. Usually one spouse ends up as the primary care giver for the kids, and that person’s standard of living takes a dive. Before becoming committed in a relationship which can easily lead to such inequity, the person has the opportunity of making a pre-nup or cohab and thus ensuring some degree of protection against serious financial hardship for that person and for the children. This has nothing to do with trying to gain an advantage. It is simply protecting one’s self and one’s children against future economic dislocation.
The bottom line? Be it marriage or cohabitation, there are unavoidable property terms, and these terms are laid down by the government unless otherwise set out in a domestic contract. As with any terms, there may be inequities, so a domestic contract provides an opportunity for both spouses identify and mitigate the inequities from the git go, rather than find themselves in later years bound by something they had not even known was there.
Most people marry for love. I suggest that being alert to the contractual nature of marriage and the property rights therein should not change this. However, being in love should not necessarily mean being blind in love.
A relationship requires a great many things to thrive, the least of which would be a domestic contract. Focusing on the failure of the marriage rather than focusing on what must be done to make it blossom would obviously be wrongheaded. But if one decides for the right reasons to marry, and thereby accepts a fixing of marital property rights, then one might as well be a party to the writing of the contract.
