If an individual wishes to control how their assets are divided, outside of default rules, this is done with a marriage or cohabitation agreements and a will.
Marriage agreements or cohabitation agreements are legal documents that outline spouses’ wishes for the distribution of their property upon separation. A will is a legal document that outlines your wishes regarding the distribution of property upon death.
Statutes such as the Family Law Act (FLA) and Wills, Estates and Succession Act (WESA), provide default rules for the distribution of property when there are not agreements or a will in place. When spouses separate, by default, they each have a right to half of all family property and are equally responsible for family debt. When someone dies without a will, they are said to have died “intestate”. When someone dies without a will, WESA provides default “intestacy” rules for property division, regardless of any prior verbal wishes.
It is important to consider estate planning when drafting a marriage or cohabitation agreement, as this can help to prevent conflict during estate distribution upon death and ensure the will-maker’s true intentions and wishes are fulfilled. Marriage or cohabitation agreements typically will not replace terms in a will. However, these agreements can specify spouses’ expectations and are taken into consideration by the Courts if there are disagreements about a will after death.
The British Columbia Supreme Court in Kuzuk v. Czajkoski, 2016 BCSC 1109, supported a marriage agreement after the surviving spouse applied to vary (i.e., change) her deceased husband’s will. The Court found that the parties’ intentions were made clear when they subsequently prepared their wills to reflect the marriage agreement, therefore, the courts gave more favour to the marriage agreement.
It is also important, when preparing a marriage or cohabitation agreement, that it does not become significantly unfair over time. This is particularly important if the marriage agreement is entered into by young couples with minimal assets at the start of a relationship. An agreement that fails to address issues of unequal resources is unlikely to help if you wish to challenge a deceased spouse’s will. Courts have set aside agreements and varied a deceased spouse’s will when an agreement became unfair with the passage of time, causing a financial dependence on the other. An agreement made in the context of estate planning should stipulate situations where the surviving spouse may have fewer resources than the deceased spouse. An example of this is a provision that the surviving spouse will receive an amount equal to what they would have received on separation or specifically what they will receive in the event of the other spouse’s death.
There are still some statutory rules that spouses cannot contract out of, through a marriage or cohabitation agreement. One of these requirements is that a will must provide adequate support to their spouse and children. The surviving spouse or children are entitled to apply to the court to vary a will. This can include if they believe the will does not provide adequate support to them. In these cases, to determine adequate support, agreements may be a factor the Court looks towards, but the nature of the relationship and considerations surrounding the agreement are provided more weight. As well, agreements cannot prevent a surviving spouse from bringing a claim, to the Courts, to vary the will of their deceased spouse.
Rules under WESA and a properly executed will, typically trump any marriage or cohabitation agreement, but those agreements may hold consideration by the Court in resolving disputes after the death of a spouse.
