Is A Prenup Legal?
In not too distant past, prenups were not legal as living together without being married was considered against public policy. However, nowadays they are legal and in fact, several provinces have statutory provisions codifying their legality. In Ontario, section 53 of the Family Law Act is the statutory authority permitting them.
However, just because they are legal does not mean that every prenup will be enforced by a court. They can be found invalid both on procedural grounds and substantive grounds – so the process of entering into your agreement is just as important as what is contained in it. Here are the main circumstances in which they will be found invalid:
1. Signatures and Witnesses. A prenup must be in writing (no oral prenups), and signed by both parties entering into the agreement. Each signature must be witnessed (and it is a good idea to use someone whom you will be able to locate many years into the future if needed).
2. Financial Disclosure. You and your partner must provide complete disclosure of your financial situation to each other prior to entering into a prenup. The disclosure include both income and financial assets. Financial disclosure must be detailed – i.e., it’s not enough that your partner knows you own an RRSP, they must also know its value.
Courts take the view that you can’t intelligently enter into a prenup without this information so if this isn’t done, your prenup risks being invalidated by a judge. It is a good idea to include the financial disclosure as a schedule to your prenup, or at least keep the papers showing financial disclosure was made.
3. Duress or Coercion. As is true for any type of contract, duress or coercion to enter into a contract can result in the contract being invalidated. So, don’t put pressure on your partner to sign a prenup.
Often the pressure won’t come from your partner, but your partner’s family – perhaps their mother or father. That sort of duress or coercion can also result in a prenup being invalidated. In other words, courts only enforce contracts that are entered into by both parties of their own free will.
4. Grossly Unfair. Judges can also invalidate a prenup on the ground that it is grossly unfair. For instance, if after a long term relationship one partner is left destitute while the other is extremely wealthy, a court is likely to step in and address this perceived injustice by voiding the prenup.
5. Illegal Clauses. Certain things are not permitted to be in prenups. The most important of these things are clauses relating to child custody and child support. As well, this includes any illegal acts or “moral” type clauses such as penalties for adultery. If these sorts of clauses are included in a prenup, they normally will be struck out without affecting the rest of the agreement.
In short, if you are fair about things when entering into a prenup, and follow the required rules, the chances are very good that your prenup will be valid.
Don’t believe me? Here’s what the Judges say:
“As both had experienced prior matrimonial breakdowns, they had the wisdom and foresight to enter into a marriage contract on the eve of their marriage.” – The Honourable Mr. Justice F. Bruce Fitzpatrick
You’re Invited to Call or E-Mail!
If you’re considering a prenuptial 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, and Hamilton.