While the Canadian divorce rate is lower than it is in most industrialized nations, there is still a chance that your marriage will end. Signing a prenuptial agreement is one of the most fiscally responsible things you can do.
For one thing, it’s cheaper than negotiating an eventual divorce agreement. A properly executed prenuptial will address everything but child custody and child support. It may even mean all the major issues of your divorce are dealt with in advance. For another, it can help protect premarital property like an existing business, intellectual property, or an inheritance.
If your spouse-to-be has a great deal of debt a prenuptial agreement can also keep that debt from becoming your debt. Thus, it’s a good idea even for individuals who don’t have a lot of money on their marriage date.
What does a prenup do?
A prenuptial agreement creates provisions for the division of assets in the event of divorce or death. It’s a financial planning tool, not a tool for strong arming a partner or communicating distrust.
In fact, the best prenuptials are mutual agreements that protect both parties. It allows you to plan for the worst while you’re still at your best. It should address all your current assets and debts and create provisions for how marital property will be divided.
It can even cover future spousal maintenance.
There is a long list of provisions which a prenuptial agreement should include, and you should consult with your lawyer to make sure you catch all of them. Some will vary according to what your current situation looks like.
What is a postnuptial agreement?
Some couples realize they should have thought to sign a prenuptial agreement before they got married. They decide to go ahead and create a division of property agreement after the fact. This is called a postnuptial agreement, and is just as legally binding as a prenuptial agreement so long as it’s set up correctly.
Each spouse will need to have their own lawyer, just as they would for a prenuptial agreement.
In addition, it’s wise to revisit prenuptial agreements every 5 to 10 years and make new postnuptial agreements that reflect the current state of your assets. Financial situations change, and you want to make sure the agreement reflects your most current reality.
Can prenups be overturned?
Yes. Prenups that weren’t properly put together in the first place may be overturned by a judge. Prenups will not hold up in a court of law if:
- They were signed under duress.
- One party gave the other fraudulent or misleading information about assets or liabilities.
- The prenup contained inappropriate or unenforceable provisions.
- Both parties didn’t have their own lawyer during the prenup process.
Prenups can also be rendered ineffective if they are out of date and the original provisions no longer apply.
Why Merchant Law?
Asset division and anticipation of future needs are both complex areas of family law. Our team has 30+ years of experience helping couples plan their financial futures. Our team is compassionate, responsive, and keeps your best interests front and center through the entire process.
Call (604) 609-7777 to consult with one of our lawyers today.