How to Make a Prenup Work for You
As you prepare to get married, one of the questions you could face is:
“Will you sign a prenup?”
Many people shy away from the idea of a prenuptial agreement. They worry that signing one limits their rights, or that they’re guaranteeing the future failure of their marriage by establishing the guidelines for separation.
Discussing the future and what can happen doesn’t guarantee the failure of your marriage. And prenuptial agreements, or marriage contracts, don’t have to be limiting, even if you’re the spouse with fewer assets or less wealth. With the right preparation and expert advice from family law professionals, you both can ensure your rights are protected.
How Prenuptial Agreements Work
Prenuptial agreements, or marriage contracts, are domestic contracts that, when drawn up properly, are legally binding. These agreements establish the guidelines for how you and your spouse will treat such issues as your finances, debts, assets or property division and spousal support during your relationship and in the event of a separation. They can be signed either before or after the marriage takes place.
To be valid, there are certain criteria a prenuptial agreement in Ontario needs to meet. The agreement has to be in writing, must be signed by both people and the signatures must be witnessed by someone who also signs.
Both partners must be truthful about their assets and finances while negotiating the agreement. If one person withholds any information, the terms regarding division of property or spousal support could be overturned if challenged in court. An advantage of you both compiling lists of your assets and debts before the marriage is that you have a clear view of your financial situation. These lists can serve as a foundation to revisit periodically throughout your marriage so you both know where you stand.
The prenuptial agreement also needs to be fair for both people. To ensure this happens, get independent advice from family law lawyers. Each of you should have your own lawyer to look after your individual rights and responsibilities. If one person is much wealthier than the other, or has a particular asset—a family business or cottage—to protect, speak to a family law professional early in the discussions. Your lawyer can help prevent you from inadvertently signing away a right, while also keeping the terms fair.
What to Consider for Your Prenuptial Agreement
While prenuptial agreements establish how assets and property will be treated in the event of a separation, they can also include the guidelines for how certain aspects of your relationship will work when you’re together. Do you want all your finances to be joint, or separate? Perhaps you want a mix of both. Your agreement could state that each of you will contribute a certain percentage of your income to the joint finances while keeping the remainder separate.
You both might have strong opinions about future inheritances. Maybe one of you considers inheritances to be communal, but the other thinks the money should be kept separate. If you can discuss this issue now and come to an agreement about it, you could save problems later in the marriage.
As you’re discussing your prenuptial agreement, try to look into the future and imagine what your lives will be like in 5, 10 or 20 years. It’s impossible to know the exact details, but you can think about generalities. For example, is having a vacation property important enough that you both want to set aside money and maybe forego traveling to achieve that? Do you expect to have children and want one parent to stay at home with the kids? If so, imagine the impact that decision could have on the family’s finances. Also, if you separate during that time, the at-home parent will need spousal support.
Keep in mind there are certain issues that a prenuptial agreement can’t address. Decisions about child custody, support and access can not be included. These issues are decided at the time of separation or divorce in accordance with the Family Law Act, which protects the child’s rights and establishes certain obligations for parents.
Get Professional Legal Advice
A prenuptial agreement may not be right for you. Or if you’re negotiating one with your future spouse and are not sure about the terms, seek a family law professional. A lawyer who specializes in family law can discuss your options and help you understand your rights and what could be at stake.
Galbraith Family Law lawyers are trained in Collaborative Practice, and we have been named the top firm by the Barrie Examiner multiple times. Our legal insights have also been featured in the Globe and Mail, as well as Lawyers Weekly.
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