What is a Prenuptial Agreement / Marriage Contract?
In Canada, a prenuptial agreement is sometimes referred to as a “marriage contract” or a “domestic agreement”; it’s often just referred to as a “prenup”. A prenuptial agreement is a contract made prior to marriage that determines the division of matrimonial property. It is still possible for a couple to sign a prenuptial agreement (marriage contract) after the marriage, but there might be a little less leverage in negotiations. The purpose of a prenuptial agreement is to specify in advance, what happens if the couple were to split up. Prenuptial agreements are common among partners where one person has significantly more wealth than the other, but can also be effective when couples have similar wealth. Prenuptial agreements are used to streamline the process in the event of a marital breakdown.
Is a Prenuptial Agreement Right for Me and My Partner?
Many couples are hesitant to discuss prenuptial agreements because it may be perceived that a prenuptial agreement shows doubt in the marriage. This does not have to be the case. If you or your partner brings business or personal assets to the marriage, then you can benefit from a prenuptial agreement. A marriage contract is similar to an insurance policy, in that it protects both parties, their families, and it would be great if you never need it, but it is there if you do.
5 Reasons to Consider Signing a Prenuptial Agreement / Marriage Contract
1. Prenuptial Agreements Save You Money and Time
You enter into an agreement now to avoid having to spend lots of money on lawyers later on, in the event of a divorce. Prenuptial Agreements will also save you time as they set the expectations of a divorce prior to the actual divorce. This steers clear of surprises coming up in a divorce trial (which would lead to more work for your lawyer, which will cost you more money).
2. A Prenup (Marriage Contract) Gives You Flexibility and Clarity
A prenuptial agreement gives you both the ability to decide division, ownership, and inheritance of property, and pretty much everything else that is not prohibited by statute or common law. Prenuptial agreements are flexible to a certain extent, but the Courts will not enforce provisions that decide child custody, support, or access in the event of separation and divorce, or any other clauses that the Court considers illegal or immoral. The lawyers at Ahlstrom Wright can help you understand what you can and cannot include into your prenuptial agreement, so if you have questions, don’t hesitate to ask us.
3. You Are Not Willing to Lose Half of Your Net Worth
If you are not willing to lose half of your net worth to your partner in the event of a divorce or separation, then a prenuptial agreement would be a good choice for you. A lot of the time, people sign a prenup because they have received a large inheritance that they want to protect for the future. Another thing that you can include in your contract is present and future profits from a business.
Are you considering a prenuptial agreement?
Our family law team can help walk you through the process and answer any questions you may have.
Ahlstrom Wright has offices in Sherwood Park, AB and Yellowknife, NWT
4. You and Your Spouse Are Taking On Large Debts
Prior to getting married, each partner is responsible for their own debts, and any money that was borrowed debts prior to the marriage will still be the sole responsibility of the borrower. Many people assume that once you get married you will automatically take on any debt your spouse takes on debt. This is not always true. Prenuptial agreements can help in deciding who pays for what later on. The family lawyers at Ahlstrom Wright can help you specify which types of debts belong to whom.
5. This is Not Your First Marriage
Often partners who have been previously divorced are more likely to sign a prenuptial agreement. After divorce, people tend to be more realistic and practical when entering their next marriage. If you have been through a divorce before, you likely know how complicated and expensive it can get. Prenups can preserve relationships between divorcees; this is especially valuable when children involved.
How Do We Get a Prenuptial Agreement?
Entering into a prenuptial agreement may seem like a difficult process. The family lawyers at Ahlstrom Wright are here to help and would be happy to draw up a prenuptial agreement/marriage contract for you. Ahlstrom Wright’s goal is to make sure that all agreements are fair and well understood by both you and your partner.