What is a prenuptial agreement?
A prenuptial agreement, also known as a domestic or marriage contract, is a written agreement between two people planning to get married. It sets out how their assets and debts will be divided if they get divorced. Prenuptial agreements can also cover other matters, such as spousal support and child custody.
Why do you need a prenuptial agreement?
There are many reasons why couples might choose to enter into a prenuptial agreement. Some common reasons include:
- To protect their individual assets, especially if one spouse has significantly more assets than the other.
- To protect business interests.
- To provide for children from previous relationships.
- To clarify expectations about financial matters during the marriage.
- To avoid costly and time-consuming litigation in the event of a divorce.
What can and cannot be included in a prenuptial agreement?
Prenuptial agreements can cover a wide range of topics, including:
- The division of assets and debts in the event of a divorce.
- Spousal support payments.
- Child custody and support.
- Inheritance rights.
- The use of the marital home.
- Moving expenses.
- Legal fees.
However, some things cannot be included in a prenuptial agreement, such as:
- Anything that would be illegal or void under Canadian law.
- Anything that would deprive a child of adequate support.
- Anything that is unfair or unconscionable to one spouse.
How to create a valid prenuptial agreement
For a prenuptial agreement to be valid, it must meet the following requirements:
- It must be in writing.
- Both spouses must sign it.
- Two independent witnesses must witness it.
- Both spouses must fully disclose each other's financial assets and liabilities.
- Both spouses must have independent legal advice before signing the agreement.
Pitfalls of not having a prenuptial agreement
If you do not have a prenuptial agreement in place, your assets and debts will be divided according to the laws of Ontario in the event of a divorce. This may not be how you would want your assets and debts to be divided.
For example, if you have significantly more assets than your spouse, they may be entitled to a larger share of your assets in a divorce, even if they did not contribute to those assets. Additionally, suppose you have children from a previous relationship. In that case, your spouse may be entitled to claim spousal support on their behalf, even if you were the primary breadwinner during the marriage.
Examples of prenuptial agreements
Here are a few examples of what prenuptial agreements can cover:
- A couple may agree that each spouse will keep their own pre-marital assets and that only assets acquired during the marriage will be subject to division upon divorce.
- A couple may agree that one spouse will receive a specific asset, such as the marital home, in the event of a divorce.
- A couple may agree that one spouse will pay spousal support to the other spouse for a certain period of time in the event of a divorce.
- A couple may agree that the children from a previous relationship will be treated like children born during the marriage.
- A couple may agree to split the costs of legal fees and moving expenses equally in the event of a divorce.
Have looked over by a legal expert
It is essential to have a lawyer look over prenuptial agreements in Ontario for the following reasons:
- To ensure that the agreement is valid and enforceable. Prenuptial agreements are complex legal documents that must be drafted in a way that complies with all applicable laws and regulations. A lawyer can help to ensure that your prenuptial agreement is enforceable so that it will be upheld in the event of a divorce.
- To protect your rights and interests. A prenuptial agreement can significantly impact your financial and personal rights in the event of a divorce. A lawyer can help you understand the terms of the agreement and negotiate a fair and equitable deal for you.
- To avoid costly disputes in the future. A well-drafted prenuptial agreement can help to prevent expensive and time-consuming disputes in the event of a divorce. This is because the agreement will clearly outline the division of property and assets and other vital matters such as alimony and child support.
Here are some specific examples of how a lawyer can help you to protect your rights and interests in a prenuptial agreement in Ontario:
- Explain the Ontario Family Law Act. The Ontario Family Law Act sets out the rules that govern the division of property and assets in the event of a divorce. A lawyer can explain the Family Law Act and help you understand how it will apply to your situation.
- Identify and address potential problems. A lawyer can help you identify and address potential issues with your prenuptial agreement, such as unfair or unenforceable provisions.
- Negotiate the terms of the agreement. A lawyer can help you negotiate the terms of the agreement to ensure that your interests are protected. For example, if you have significant assets, a lawyer can help ensure that the agreement protects your assets in case of a divorce.
- Review the agreement before you sign it. A lawyer can review the prenuptial agreement before you sign it to ensure you understand all the terms and conditions. They can also answer any questions you may have about the agreement.
If you are considering signing a prenuptial agreement in Ontario, I encourage you to consult with an experienced lawyer, like one of ours, to discuss your options. They can help you to understand your rights and obligations under the agreement and to negotiate an agreement that is fair and equitable to you.
Prenuptial agreements can be a valuable tool for couples who want to protect their assets and financial interests in the event of a divorce. However, it is crucial to note that prenuptial agreements do not guarantee that a divorce will be easy or amicable. Please consult with a Law Expert from Tabuchi Law to ensure your T's are crossed, and i's are dotted.