It is increasingly common for couples to enter into legal contracts to govern the financial consequences of a breakdown in their relationship. Considering that roughly half of all marriages end in divorce, this is not surprising. These agreements are commonly referred to as “pre-nuptial agreements”, “pre-marital agreements” or “co-habitation agreements” when entered into before marriage and “marriage contracts” when entered into by a married couple. A recent case heard in the Ontario Superior Court of Justice highlights the importance of careful and thorough drafting to avoid potentially unintended consequences. In Caron v. Rowe, Andrea Caron made a claim against the Estate of her deceased husband, Paul Rowe, asserting an entitlement to the entire Estate as his surviving spouse. Paul’s Will left everything to his parents, but it was signed before he and Andrea married and was, pursuant to s. 16 of the Succession Law Reform Act,revoked by the marriage. Paul’s parents took the position that Andrea was not entitled to Paul’s home as a result of the following provision in his and Andrea’s marriage contract: “Paul shall have, at all times, the full right and authority, in all respects the same as he would have if not married, to use, enjoy, manage, gift, sell, assign and otherwise convey the Home without interference, approval or other consent from Andrea and the Home shall remain forever free of claim by Andrea with the exception that she shall have the right to live in the Home for a reasonable length of time following the legal separation of Paul and Andrea, if ever, such occupation to not exceed a term of six (6) months”.Despite these words – and the rather unambiguous-sounding “forever free of claim by Andrea” included – the Court ruled that Andrea had not waived her spousal rights on her husband’s death, and awarded the entire Estate, including the home, to her. In coming to this decision, the Court noted that prior case law had established that “clear and cogent words” are required in a marriage contract to deprive a spouse of inheritance rights under the Succession Law Reform Act.
In the marriage contract at hand, the Court ruled, the parties had addressed rights on separation and divorce, but had not clearly and directly addressed claims arising on death. In the absence of such clarity, the law will side with the party seeking to enforce statutory rights.
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