Prenups: Protect Your Future in Mississauga

Entering into a marriage is an exciting, emotional time. But it's also important to consider your financial future. A prenuptial agreement, also known as a marriage contract or domestic contract, can help protect your assets and provide clarity around spousal support and the division of property if your marriage ends. As an estate planning firm in Mississauga, we've helped many many navigate this process. Here's what you need to know.

• What is a Prenup?
• Why Get a Prenup?
• What Goes in a Prenup?
• When to Get a Prenup
• How to Get a Prenup
• Enforceability of Prenups
• Alternatives to Prenups

What is a Prenup?

A prenuptial agreement, also known as a marriage contract or antenuptial agreement, is a legal contract entered into by a couple before they get married. It outlines how assets and liabilities will be divided, as well as any arrangements around spousal support, if the marriage ends in separation or divorce. Well, here's the thing - a prenup doesn't mean you're planning for your marriage to fail. Rather, it's a practical way to provide clarity and certainty around financial matters, which can help reduce conflict and stress down the road.

Why Get a Prenup?

There are several good reasons to consider a prenuptial agreement, especially if you or your partner have significant assets, own a business, or have children from a previous relationship. A prenup can help protect your separate property - assets you owned before the marriage - and ensure they remain yours in the event of a divorce. It can also outline how marital property, or assets acquired during the marriage, will be divided.

Another key benefit is that a prenup can predetermine spousal support obligations. This can provide financial security and certainty for both spouses. Without a prenup, spousal support is determined based on a number of factors outlined in Ontario's Family Law Act, which can lead to drawn-out, contentious negotiations during a separation.

Ultimately, a prenup can help you and your partner have open, honest conversations about your finances and future goals - and get on the same page before you tie the knot. This can strengthen your relationship and set you up for long-term success.

What Goes in a Prenup?

A prenuptial agreement can cover a wide range of financial and practical matters, including:

• Division of assets and liabilities - how property, investments, debts, and other assets will be divided in the event of a separation or divorce
• Spousal support - whether one spouse will pay support to the other, and the amount and duration of those payments
• Ownership of the matrimonial home - who has the right to stay in the home if the couple separates
• Treatment of future inheritances or gifts - whether these will be considered separate or marital property
• Management of a family business - how the business will be handled in a separation
• Dispute resolution - how any disagreements about the prenup will be handled, such as through mediation or arbitration

It's important to note that a prenup cannot deal with child custody or child support, as these are determined based on the best interests of the child.

When to Get a Prenup

The best time to start discussing and drafting a prenuptial agreement is well before the wedding date - ideally, several months in advance. This gives you and your partner plenty of time to have open, honest conversations about your finances and goals, and to seek independent legal advice.

Some key times when a prenup may be particularly beneficial include:

• If one or both partners have significant assets, such as real estate, investments, or a business
• If one partner will be giving up their career or earning potential to support the other partner or raise children
• If either partner has children from a previous relationship
• If there's a significant disparity in the partners' net worth or earning potential

Ultimately, the decision to get a prenup is a highly personal one that depends on your unique financial and family circumstances. The important thing is to have open, honest conversations with your partner and seek legal advice to ensure your interests are protected.

How to Get a Prenup

Creating a prenuptial agreement involves several key steps:

1. Have open discussions with your partner about your finances, goals, and concerns. This will help you determine what to include in the prenup.
2. Each partner should seek independent legal advice from a lawyer who can review the proposed agreement and ensure it's fair and legally binding.
3. Draft the prenuptial agreement with the help of your respective lawyers. This document should be clear, detailed, and tailored to your specific situation.
4. Review and revise the agreement until you and your partner are both satisfied with the terms.
5. Sign the prenup in the presence of witnesses, ideally at least 30 days before the wedding.

It's important to note that both partners must fully disclose their financial situation and assets during the prenup process. Failure to do so could jeopardize the enforceability of the agreement down the line.

Enforceability of Prenups

In Ontario, prenuptial agreements are legally binding contracts, but they must meet certain criteria to be enforceable. Some key factors that can impact the enforceability of a prenup include:

• Full financial disclosure by both parties
• Independent legal representation for each partner
• Fairness and reasonableness of the agreement's terms
• Absence of coercion, duress, or undue influence
• Timing - the prenup must be signed at least 30 days before the wedding

If a prenup is challenged in court, a judge will review these factors to determine whether the agreement is valid and enforceable. It's critical to work with experienced estate planning lawyers to ensure your prenup meets all the legal requirements.

Alternatives to Prenups

If a prenuptial agreement isn't the right fit for your situation, there are other options to consider:

• Cohabitation agreement - a contract that outlines the rights and responsibilities of unmarried partners who are living together
• Separation agreement - a contract that outlines the terms of a separation, including the division of assets and spousal support, if a married couple decides to part ways
• Will and estate planning - ensuring your will, powers of attorney, and other estate planning documents are up-to-date and reflect your wishes

Ultimately, the best approach will depend on your unique circumstances and goals. The team at Tabuchi Law can help you explore all of your options and determine the right solution for you and your partner.

FAQs

Do I need a prenup if I don't have many assets?

Even if you don't have significant assets, a prenuptial agreement can still be beneficial. It can help provide clarity around spousal support, the division of any future assets acquired during the marriage, and other important financial matters. Ultimately, a prenup is about more than just protecting assets - it's about having open, honest conversations with your partner and setting yourselves up for long-term financial success.

Can a prenup be changed after marriage?

Technically, yes - a prenuptial agreement can be amended or revoked after marriage. However, this requires the consent of both spouses and must follow the same legal requirements as the original prenup, such as independent legal representation. In practice, post-nuptial changes to a prenup are quite rare, as the whole point is to have the terms set in stone before the wedding.

Do prenups expire?

No, prenuptial agreements in Ontario do not expire on their own. The terms of the prenup will remain in effect for the duration of the marriage, unless the agreement is later amended or revoked by mutual consent of the spouses. It's important to review your prenup periodically, especially if your financial or family circumstances change, to ensure it still reflects your wishes.

Can a prenup be overturned in court?

Yes, it is possible for a prenuptial agreement to be overturned or declared unenforceable by a court, but the bar is quite high. As mentioned earlier, the prenup must meet strict legal requirements around financial disclosure, independent legal advice, and fairness. If these conditions are not met, a judge may choose to invalidate some or all of the prenup's terms.

Do I need a lawyer to get a prenup?

Yes, it is strongly recommended that both partners have their own independent legal representation when drafting and signing a prenuptial agreement. This helps ensure the agreement is fair, fully understood by both parties, and legally binding. While you could technically draft a prenup yourselves, having experienced estate planning lawyers on your side is the best way to protect your interests.