By Douglas J. Manning, Partner, Certified Specialist in Family Law

Yes!  But why would you want to?

In a recent British Columbia court decision, one of the issues was whether the husband and the wife had entered into an oral marriage contract that excluded the sharing of the wife’s rental property from being shared in the parties division of property when they separated.

Both parties had come from previous marriage-like relationships. The wife owned 2 properties coming into this marriage.  The value of one of the properties increased by about $500,000 during the 3 year marriage.  The parties never occupied the property during the marriage and they never shared the rental income. The husband never paid any of the expenses associated with the property.

The wife’s evidence was that the parties had a verbal contract that the husband would not have any interest in the property, nor would the value of the property or any increase in the value be included in what the wife would have to account for in the sharing of the parties’ net worth.

The husband maintained that they had talked about putting his name on title to the property and therefore he would have been a joint owner and thus the intention was to share the asset and the increase in the value over the marriage should be included in the mix of the property to be shared.

The wife gave evidence that each party agreed to be responsible for their own expenses and pay their own debts and not look to the other for assistance.  The evidence showed that they more or less were responsible for their own individual expenses, never had a joint bank account and each was financially responsible for their own children from their prior relationships. However, the parties did share their living expenses together, including the costs of vacations, etc..

The issue was largely one of credibility. Who did the judge believe?  On balance the court preferred the wife’s evidence as it was more consistent with how the parties conducted themselves.  They had very little integration of their financial matters and this supported the wife’s contention that there was no mutual intention to share the value of her pre-marriage rental property or the increase in its value.

Of course all of this could have been avoided had the parties decided to have a written marriage contract that clearly set out their expectations, rights and obligations.  If you are going into a new relationship and have considerable assets or there is a significant difference in your incomes, it would be wise to consider the use of a cohabitation agreement or marriage contract.