What is a Post Nuptial Agreement or PostNuptial Contract or Postnup?
A post nuptial agreement is simply a prenup that is entered into after marriage. In terms of content of the agreement, it is precisely the same as a prenup, and all the information on this website applies equally to prenups and postnups.
What is the legal status of Postnups in Canada?
Postnuptial agreements are permitted in Canada. You can enter into a prenup at any time, either before or after marriage. As a practical matter, the main difference really is that after marriage these agreements can be difficult to complete, as one party simply drags their feet or refuses to sign.
Will a Postnup really protect me?
It can protect you the same as a prenup can protect you. However, as discussed below, courts treat them with special caution, and when entering into one, you should be thinking in terms of protecting *future* assets rather than currently existing ones.
Are there any legal concerns about Post Nuptial Agreements?
Yes, absolutely. In determining the validity of a postnup, courts treat them with special caution. Even though the agreement may be exactly the same as a prenup, from a legal perspective, they are very different. This is because before you are married, you have no special legal rights or obligations to the person whom you are about to marry. Therefore, in legal theory at least, no one is giving up any rights when entering into a prenup.
However, the day you get married, you acquire various family law rights and obligations to and from your spouse. So, when you enter into a post nuptial agreement, normally at least one person will be giving up legal rights that they already have. There is nothing wrong with this, but a court will be extra cautious in examining the circumstances surrounding why a postnup was entered into when determining the validity of a postnup. So, you will need to be extra cautious in documenting this through legal counsel, and take extra care to ensure that the agreement is fair.
When are Post Nuptial Agreements used?
There is no right or wrong time for a postnup. One of the most common circumstances I’ve seen where a postnup is used is when the parents of one spouse are giving the married couple a matrimonial home as a gift. In that case, the parents may want to ensure that their child keeps the home in case the relationship ends. The parents may make the gift of the home conditional on the married couple entering into an agreement stating that their child keeps the home in case of separation. Such an agreement is likely to be upheld by a court, since: (a) the other spouse gets the benefit of living in a nice home while the relationship is intact; and (b) the other spouse is not losing anything by entering into the agreement – if they didn’t sign the agreement, they would not have a nice home being gifted to their spouse.
Another common postnup example is when couples enter into an agreement because it is required for a business venture. As part of a partnership agreement or shareholders agreement, there may be a requirement to enter into a postnuptial agreement ensuring that spouses of partners or shareholders do not gain any ownership or control of the business. Such an agreement is likely to be upheld by a court.
My spouse wants me to enter into a postnup waiving all spousal support – is this possible?
This is an example of a type of agreement that will likely be found invalid by a court. Once you marry, you have automatic rights and obligations in regards to spousal support. It would be a very unlikely set of circumstances where a court would permit someone to waive these rights completely after marriage. The suspicion would be that the agreement is really just a separation agreement in disguise and is done as a prelude to breaking up.
We were just married recently – what’s the situation for us?
If you were just married recently, you can be a lot more flexible with a postnuptial agreement. The reason for this is that, although when you get married, certain family law rights and obligations arise, it is unlikely that a newlywed couple has significant financial obligations to each other shortly after getting married. As well, many couples start negotiating a prenup prior to marriage, but simply are not able to retain lawyers and get the agreement prepared prior to marriage due to time, financial, and other constraints. Simply because you missed getting your prenup done prior to your marriage does not mean you can no longer go ahead with it.
I’m thinking about separating / I’m having an affair. Can I still enter into a post nuptial agreement?
The short answer is yes – you can still enter into a postnuptial agreement even if you have thought about separation or are having an affair, but you still need to negotiate the postnup in the utmost good faith.
The main case discussing this is: D’Andrade v. Schrage, 2011 ONSC 1174 (CanLII). In this case, the husband tried to set aside a postnup on the ground that at the time it was negotiated, the wife was having an affair and contemplating separation. The court decided that the postnuptial agreement should NOT be set aside because of this. Some of the points that the judge made:
* Spouses often think about separation when their marriage hits a rough patch, but don’t necessarily go through with it.
* How serious do the thoughts of separation need to be? A spouse can be thinking about it but not planning on going through with it.
* Forcing a spouse to disclose that they are thinking about separation or having an affair would likely end the relationship quickly.
* Financial arrangements about divorce are no fault in Canada; looking at thoughts of separation or an affair introduces fault into such financial arrangements.
* Postnups are there to deal with finances, not to enforce personal obligations such as staying in a marriage or being faithful.
In another case, Stevens v. Stevens, 2012 ONSC 706 (CanLII), the husband had an affair. As part of the reconciliation process, the couple negotiated a postnuptial agreement. The husband represented to the wife that he had ended the affair and was committed to working on their relationship. Despite this, he continued his affair throughout the negotiation of the postnup. Despite this, the court found that his conduct was not grounds to setting aside the agreement.
You’re Invited to Call or E-Mail!
If you’re considering a post nuptial agreement — or have already made your decision — you’re invited to call or email us. We’ll explain for free how you can protect your assets and plan your estate. You can call us toll-free at 855-PRENUP-4 or email us using our contact form here. We can help you anywhere in Ontario, including Ottawa, Toronto, Mississauga, Brampton, Hamilton, London, Markham, and Vaughn.