When couples get married they may choose to sign a marriage agreement (commonly referred to as a “prenup”). A marriage agreement can be used to predetermine what obligations the parties to the marriage will have for one another in the event of a separation or divorce. For example, a wealthy party to a relationship might want their partner to sign a marriage contract limiting the amount of spousal support or property division they would be entitled to in the event of a high-asset divorce. But as we see in a recent decision from the Ontario Court of Appeal, sometimes a marriage contract is not enough to warrant the payment of support altogether.
The marriage contract
The parties were married in 2003. They signed a marriage contract prior to getting married. The marriage contract stated that in the event of the dissolution of the marriage, neither party would be entitled to each other’s property. The wife also waived any right to claim spousal support.
During the original trial, the trial judge found that although the marriage contract was valid and binding as it pertained to the division of property, he went on to state that the wife’s financial status warranted some award of spousal support. The wife’s reported annual income was $15,564, while the husband’s was $25,738.34. The court awarded a lump sum payment to the wife of $40,000, but went on to award the husband an order of costs amounting to $25,738.34.
Husband’s property is not examined
The court noted that when the parties were married, the wife was 42 and the husband was 66. At the time of the trial, she was 57 and he was 80. The husband was married previously, and during that time he acquired a number of properties, a number of which he rented out. At trial, the judge wrote, “It is evident that the (husband’s) net wealth has grown solely due to the increase in the value of his property but not as a result of any efforts from the applicant.” As a result, the trial judge had found that the change in circumstances, particularly the husband’s wealth from his property, meant the agreement was no longer fair. However, the trial judge stopped short of using the husband’s property to impute an income.
The court found that an examination into the husband’s income was not done at trial, adding that the Federal Child Support Guidelines, which also address spousal support, allowed for a court to impute income in the event the “spouse’s property is not reasonably utilized to generate income.”
However, since an analysis of the husband’s income from his property, valued at about $5 million, was not performed at trial, the court ordered that a new trial would have to be held in order to determine how much income should be imputed to the husband.
When a couple with high-value and complex assets is going through a divorce, the standard rules and obligations become more complicated. Difficulties can arise with regard to property division, including an analysis of asset worth, location and accessibility. To speak with an experienced Windsor family lawyer about high-asset divorce issues, call 519.973.1500 or contact us online. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.