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Prenuptial Agreement Law

The Law in Ontario

Prenuptial agreements in Ontario are known as marriage contracts. They have been given formal recognition in statute since at least 1978. Section 52(1) of the Family Law Act, R.S.O. 1990, c. F.3, as amended, provides:

“Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,

(a) ownership in or division of property;

(b) support obligations;

(c) the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and

(d) any other matter in the settlement of their affairs.”

More generally, a marriage contract is a type of domestic contract. Domestic contracts also include cohabitation agreements, separation agreements, paternity agreements, and family arbitration agreements (section 51 of the Family Law Act).

Form of Contract

A marriage contract must be in writing, signed by the parties, and witnessed (section 55(1) of the Family Law Act).

So long as a marriage contract meets these formal requirements, it will be followed by a court, except as set out below.

What Cannot Be in a Marriage Contract

A marriage contract is not permitted to deal with most parenting issues, particularly custody of, and access to, children (section 56(1) of the Family Law Act). This is because in the legal test for these issues is the best interests of the children, and the court always retains jurisdiction to decide what is in the best interest of the children, regardless of what parents may agree between themselves.

A marriage contract is not permitted to deal with child support (section 56(1.1) of the Family Law Act). This is because child support is considered the right of the child, and parents are not permitted to reduce it on the child’s behalf.

A marriage contract is not permitted to deal with fidelity (section 56(2) of the Family Law Act). This is because family law issues in Canada are decided without regard to fault.

As a practical matter, most marriage contracts deal with the division of property upon a couple separating or one of the parties passing away, and the payment of spousal support (alimony) after the couple separates or one of the parties passing away.

Grounds for Challenging a Marriage Contract

Section 56(4) of the Family Law Act sets out the three grounds for challenging a marriage contract. The first of these is “if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made.” The idea is that a marriage contract is a financial agreement, and to make an intelligent decision as to whether to enter into such a contract, both parties should be fully aware of each other’s financial situation.

The second ground is “if a party did not understand the nature or consequences of the domestic contract.” For this reason, it is recommended as best practice that both parties retain lawyers to advise them about the marriage contract before entering into it. However, this is not a legal requirement and the courts have on many occasions upheld agreements where a party did not obtain legal advice. Generally, if a party was recommended to retain a lawyer, and given the opportunity to retain a lawyer, a court would consider that sufficient.

The third ground is “otherwise in accordance with the law of contract.” This includes any reason that any commercial contract would be set aside, for instance, fraud by one of the parties. The main issue on this ground for marriage contracts is coercion or duress. An example would be something like one of the parties raises the issue of entering into a marriage contract for the first time on the eve of the wedding after wedding invitations have gone out, and threatens to cancel the wedding if a marriage contract is not signed.

Validity of Marriage Contracts

In general, so long as both parties were represented by lawyers in entering into the agreement a court will uphold a marriage contract. Even if both parties do not have a lawyer, so long as both parties understood the basics of the agreement, a court generally will uphold the marriage contract.

A court may decide to modify a term of a marriage contract if it is “unconscionable” – i.e. shocks the conscience of the court. An example of this might be an agreement that leaves one party in such a poor financial situation that the party must rely on social assistance to survive. However, a court will not intervene with a marriage contract simply because it is unfair.

Timing of Entering into a Marriage Contract

A marriage contract may be entered into either before or after marriage. From a legal point of view the timing does not matter.

To avoid an appearance of coercion or duress, often if a marriage contract cannot be completed at least one clear month prior to the wedding, couples on the advice of their lawyers will wait until after their wedding to sign the agreement. It is not uncommon that more complex marriage contracts end up getting signed after the wedding, simply because couples underestimate the timelines involved and the desire to avoid any appearance of coercion or duress by signing just before the wedding.

Inheritances and Gifts from Third Parties Invested in a Matrimonial Home

Whether an inheritance or gift from a third party invested in a matrimonial home is protected in a marriage contract is going to depend on the particular wording of the marriage contract.

That being said, it is normally done. There is a quirk in Ontario family law that the value of the matrimonial home is shared equally by the couple regardless of the length of the marriage or the source of the funds used to purchase the home, unlike all other property.  As a result, it is almost standard that a marriage contract provides that any inheritances or gifts from third parties that are invested in a matrimonial home are exempt from division between the couple.

Ultimate Prenup FAQs

You’ve got questions about prenups? Well, I’ve got answers! Check out below our extensive answers to the most common questions I get asked about prenuptial agreements.

General

What is a prenuptial agreement?

It is a contract between a couple who is going to marry that sets out their legal rights and obligation when their relationship ends. All relationships end at one point or another – either due to separation or due death.

Is a prenuptial agreement legal in Canada?

Yes, prenups are legal in all provinces in Canada provided that they follow all the required legal formalities, such as financial disclosure, being witnessed, and in writing. You can check out my extensive article about this here.

We are already married. Can we enter into a prenup?

Yes you can, but this is a very different situation than for couples who are not married. The reason for this is that once you marry you automatically obtain certain legal rights which you may be giving up in a prenuptial agreement. However, prior to marriage you have not yet obtained those legal rights, so there is nothing to give up. These are called post nups and you can find more information about them over here.

How much does a prenuptial agreement cost?

It depends on what you are looking for. You can see our fees here.

My partner and I agree on everything. Can we both hire you as our lawyer?

The Law Society prohibits all lawyers from representing both people in a prenup. The idea is that even if the two of you agree completely on everything, your interests are not identical. What may be beneficial to one of you may be harmful to the other.

Do we both need lawyers?

There are no hard and fast rules, but generally, the sooner the better. Ideally, you want to start the process at least 4 months before the wedding date. That would allow up to 3 months to prepare and finalize the agreement, with one clear month between signing the agreement and your wedding date. The idea behind the clear month is so that there is no pressure on one party to sign the agreement, and there is time after the agreement to change one’s mind if one regrets signing it.

If your financial or legal situation is more complicated, then you would want to start sooner, and if your situation is not as complicated, you may be able to start later.

If the timing is tight between the agreement and your wedding date, consult with a lawyer as to whether it is appropriate to proceed with the agreement. There are also other options you should consider. The first is postponing your wedding date. The second is what is known as a “stand still” agreement. This is a prenup that basically states you and your partner intended to enter into a prenup prior to your wedding, but were unable to do so due to time constraints. The two of you plan on entering into a prenup after the wedding. The agreement states that if the marriage ends, then you and your partner are to be in about the same position as if the marriage had not occurred. The stand still agreement expires after a time period (typically 6 months to one year), which is the deadline for you and your partner to enter into a properly negotiated prenuptial agreement.

What is financial disclosure?

The idea behind financial disclosure is that you cannot enter into an agreement about your and your partner’s finances without both of you having a clear understanding of each other’s financial situation. To ensure that this is the case, as part of the process of preparing a prenuptial agreement, you must list out your income, assets and debts, and your partner must do the same. This financial disclosure becomes part of the agreement.

Do I need a notary?

A notary is not needed for a prenup. You and your partner will each need separate witnesses when you are signing your agreement.

What is a sunset clause?

This is simply a clause in your prenup stating that at some point in the future, your prenup is no longer to be followed – normal family law rules will apply. A similar kind of clause is what is known as a review clause. This states that at some point in the future, you and your partner will review the prenup to determine whether it still suits your relationship, and if required, will make appropriate changes to the prenup.

 

I have a question not answered above
No problem! Just email us on our contact form and we’ll get back to you within one business day.

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.

When Should I Get A Prenup?

There are no hard and fast rules, but generally, the sooner the better.

Ideally, you want to start the process at least 4 months before the wedding date. That would allow up to 3 months to prepare and finalize the agreement, with one clear month between signing the agreement and your wedding date. The idea behind the clear month is so that there is no pressure on one party to sign the agreement, and there is time after the agreement to change one’s mind if one regrets signing it.

If your financial or legal situation is more complicated, then you would want to start sooner, and if your situation is not as complicated, you may be able to start later.

If the timing is tight between the agreement and your wedding date, consult with a lawyer as to whether it is appropriate to proceed with the agreement or consider another option.

There are also other options you should consider:

1. Postponing your wedding date. I know it sucks, and I don’t think a single client I’ve recommended this to has done so, but it is often the best option, at least from a legal perspective.

2. Consider what is known as a “stand still” agreement. This is a prenuptial agreement that basically states you and your partner intended to enter into a prenup prior to your wedding, but were unable to do so due to time constraints. The two of you plan on entering into a prenup after the wedding. The agreement states that if the marriage ends, then you and your partner are to be in about the same position as if the marriage had not occurred. The stand still agreement expires after a time period (typically 6 months to one year), which is the deadline for you and your partner to enter into a properly negotiated prenuptial agreement. If you and your partner do not enter into a prenuptial agreement during this time, you can make the decision whether to end the marriage, or continue the marriage without a prenup.

3. Enter into a postnuptial agreement. This means that you wait until after your marriage to enter into the agreement. You can read more about post nups here. As that article states, courts are a bit more cautious about agreements entered into after marriage. However, if the agreement is entered into in a few weeks after marriage, it is normally not as big a deal. By waiting until after marriage, you remove the concerns about an agreement being signed under duress due to timing. To choose this option, you must be confident that your partner will still sign the agreement after you get married.

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.

International Prenuptial Agreements

I’m getting married in the United States. Where do I get my prenuptial agreement?
The relevant jurisdiction is the one that you are living in when your relationship ends. Where you get married is irrelevant for these purposes. So, even if, for instance, you get married in New York, if you are living in Ontario when your relationship ends, you would be governed by Ontario law, and you would get an Ontario prenup.

I’m going to be living in both Ontario and another country during my marriage. Will my Ontario prenup be valid in this other country?
This is a question only a lawyer in the other country can answer. Even if your Ontario prenup states that all family law rights are governed by the agreement, the agreement is made pursuant to the laws of Ontario, and the jurisdiction for any adjudication related to the agreement is Ontario, a foreign court may not enforce the agreement (for many reasons – e.g. some countries simply do not enforce prenuptial agreements).

What is typically done in these situations is that the international couple enters into two “mirror” prenuptial agreements – a prenup in both jurisdictions where they will be living that essentially say the same thing. That way you can be sure that regardless of which jurisdiction you live in, there is a valid prenup governing your relationship.

If I get my prenup in Ontario, then move to another country, will my prenup still be valid?
There is no way to prepare a prenuptial agreement that is valid internationally. If you are going to move to another country, you can’t be certain that your prenup will be valid in your new country of residence without obtaining advice from a lawyer in that country.

If you were not expecting to move to this other country, you may be able to obtain a post nuptial agreement. Again, you would need to obtain advice from a lawyer in that country to determine whether this is possible.

I’ve got a prenup from another country. Is this valid in Canada?
Whether a foreign prenuptial agreement is valid in Canada is going to depend on a number of factors, and you will need to sit down and have an in-depth discussion with a lawyer. Some foreign prenups will be; many will not be. Being an international couple is difficult – even agreements that are valid in Canada may not have the effect that you think they will.

This is a complex issue governed by section 58 of the Family Law Act of Ontario. We will need to look at section 58 of the Family Law Act in detail to help international couples. It provides:

The manner and formalities of making a domestic contract and its essential validity and effect are governed by the proper law of the contract, except that,

(a) a contract of which the proper law is that of a jurisdiction other than Ontario is also valid and enforceable in Ontario if entered into in accordance with Ontario’s internal law;

(b) subsection 33 (4) (setting aside provision for support or waiver) and section 56 apply in Ontario to contracts for which the proper law is that of a jurisdiction other than Ontario; and

(c) a provision in a marriage contract or cohabitation agreement respecting the right to custody of or access to children is not enforceable in Ontario.

Let’s parse this provision carefully. In the first sentence, you can see right off the bat that a foreign prenup will be “governed by the proper law of the contract” – that is, by the law that the prenup says it will be governed by. So, this means that for international couples, a prenup will often be valid in Ontario. However, there are 3 exceptions set out in the statute.

The first exception – A foreign prenuptial agreement will be valid and enforceable in Ontario, and subject to the laws of Ontario, if entered into in accordance with Ontario law. In other words, the prenup must be entered into in accordance with the governing statutes and case law in Ontario, which is obviously not normally the case. For instance, a Romanian prenup is likely entered into in accordance with Romanian law, and not Ontario law.

This exception does not mean that the foreign prenup must comply with the entire body of Canadian law. But it must at least meet the formal requirements of Ontario law (made in writing, signed by the parties, and witnessed) and likely satisfy Ontario law requirements of consent and capacity, and likely at least take into account the general legislative scheme dealing with family law.

The second exception – Even where the proper law of the contract is a foreign jurisdiction, a court can set aside provisions in prenups under section 56 or 33(4) of the Family Law Act.

Let’s look at each of these in turn. Under section 56 of the Family Law Act, a court can disregard provisions in a prenup that deal with custody, access, child support, chastity, insufficient financial disclosure, lack of understanding of the agreement by one party, fraud, and duress. Under section 33(4) of the Family Law Act allows a court to disregard a provision for spousal support or a waiver of spousal support if such a provision would be unconscionable or if there was a default in payment. In short, anything that would not be enforced in an Ontario prenup will not be enforced in a foreign prenup.

The third exception – Custody and access provisions are not enforceable in foreign prenups (just like in Ontario prenups).

 

You’re Invited to Call or E-Mail!

If you are an international couple considering a prenuptial agreement — or an Ontario couple who may move abroad during your marriage — 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.

Common Law Relationships

Are You in a Common Law Relationship?
If you are in a common law relationship (living together with someone in a conjugal relationship), then you can enter into a prenup. This kind of prenup has a special name – a cohabitation agreement. A cohabitation agreement works the same way as a prenup. They are different from prenups, as common law couples have different family law rights than married couples, but for most practical purposes, they are the same as prenups, and any discussion about prenups will equally apply to cohabitation agreements.

Why Get a Cohabitation Agreement?

The law relating to common law relationships in Canada is a mess. Unlike for married couples where there are precise rules for how property is divided if a relationship ends, no such thing exists for common law couples. For instance, you and your partner may be equally sharing the cost of a home that is in your partner’s name. If you were married, the house would be shared equally. If you are unmarried, there is an automatic presumption that the house belongs to your partner, as your partner’s name is on the home. To get a share of the home, you must rely on a complicated and expensive legal claim known as unjust enrichment.

It is difficult to know in advance, even for an experienced lawyer, what the result of a claim for unjust enrichment will be. This makes these sorts of cases difficult to settle amicably, which further increases legal fees. You may want to avoid this, and share property equally as if you were married. Or not share property at all. Or share some property.

Many people are unaware that cohabiting couples do not have the same legal rights to property division as married couples. As well, many people are unaware that cohabiting couples have a right to spousal support – in Ontario, after 3 years of cohabitation (or 1 year if you have a child together), it is possible for one partner to claim spousal support from the other partner.

When to Get a Cohabitation Agreement?

The best time to get a cohabitation agreement is before you move in together or have a child together. Obviously, this is not always possible or practical, but generally, the sooner the better.

Note that you can enter into a cohabitation agreement at any time – even if you and your partner have lived together for many years.

What if We Marry?

If you marry, your cohabitation agreement continues in effect. There is no need to do anything special to ensure that this occurs.

What’s the cost and process?
The cost and the process is the same as for a prenup. You can read about the cost here and the process here.

You’re Invited to Call or E-Mail!

If you’re considering a cohabitation 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.

20 Reasons Why You Should Have a Prenup

Why should I get a prenup?

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20 reasons to get a prenup

pre marital agreementPrenups have an undeserved bad reputation. The truth is prenuptial agreements can be used to cover many possible scenarios in life and they can be appropriate even for couples without significant wealth. The benefit of a prenup can be applied to any relationship, regardless of assets or income. Here are 25 reasons you should consider getting a prenup before saying “I do.”

Reason #1- Make plans while you are most happy together.
One of the biggest benefits of a prenup is it offers honest and upfront communication while you are both most in love. If the marriage doesn’t work out, any of the issues that could have been addressed early will become major power struggles during the divorce. If the marriage ends in divorce, the prenup will prevent many of the most contentious financial arguments.

Reason #2- Address debt obligations.
Traditionally, prenups have been used to determine what will happen to assets that either spouse brings into the marriage or acquire during the marriage. Prenups can also be used to address any debt obligations that are brought into the marriage, or acquired during the marriage, a benefit that applies to couples of all income levels.

Reason #3- A divorce can lead to financial ruin.
Divorce can cause significant financial problems for years, and is even a leading cause of bankruptcy. While no one wants to think that their happy marriage could end in a contentious divorce, ending up on the wrong side of a divorce can cost you your financial stability, retirement savings, and credit rating. A prenup can protect you against this, and also the significant legal fess that would arise in a contentious divorce.

Reason #4- A prenup protects victims who are blindsided by divorce.
Many divorces take place after months of fighting or a major life event, but sometimes they are the result of one spouse being blindsided. In this case, one spouse may have a divorce sprung on them without anything time to prepare. A prenuptial agreement can at the very least ensure there is a plan in place for a separation.

Reason #5- It can protect a business.
If you enter into a relationship as a business owner or a part owner in a business, a prenup can help you protect your ownership. This can be especially important when a family business is involved.

ontario marriage agreementReason #6- Settle potential alimony issues in a formal agreement.
The amount of spousal support that should be paid is often an acrimonious and expensive issue if a couple separates. The amount of spousal support that is payable can be surprisingly for most people, particularly where one spouse earns significantly more than the other. A prenuptial agreement can allow the parties to waive spousal support, set out a specific amount, or agree to a formula for spousal support. This is an important issue to think about if one spouse wants to stay home to raise children.

Reason #7- Get a better understanding of your spouse’s needs, goals, and concerns before marriage.
While drafting a prenup can bring up difficult discussions sometimes, it’s also an opportunity to have an open and honest discussion about finances, child-rearing, and other important issues before you get married. This can give you an excellent opportunity to learn more about your spouse’s needs, motivations, and concerns before you tie the knot. The very act of coming to an agreement can reveal many things you have in common and potential “dealbreakers” that you definitely want to know before you get married.

Reason #8- A prenup can ensure the marriage is about the relationship, not the assets.
If you have substantial wealth or you are much wealthier than your partner, it definitely makes sense to enter into a prenuptial agreement to protect your assets. This agreement before marriage can also ensure that the marriage is really about your partner marrying you for who you are, not what you own.

Reason #9- A prenup can protect a financially weaker partner.
Many people assume prenups are about protecting the wealthier partner, but they can also offer protection for spouses who are not well off before the marriage or earn far less than their spouse. A prenuptial agreement can be used to ensure the financially weaker spouse receives alimony or sufficient assets in a divorce and is not left destitute.

Reason #10 – You are remarrying.
When you remarry, your legal and financial concerns are often very different than in your first marriage. You may have children from a previous marriage, support obligations, and own a home or other significant assets. A prenup can ensure that when you pass away, your assets are distributed according to your wishes, and that neither your first family, nor your new family are cut off.

marriage agreement ontarioReason #11- You want to protect a specific asset.
A prenup can also be used to protect specific assets. In Ontario, this would most often be a matrimonial home, as matrimonial homes are treated differently than other assets. But it need not be a home – it could be a pension or something else of value.

Reason #12- You want to give up something for your spouse.
A prenup can be used for more than protecting the assets of a wealthy spouse; they can also help protect the interests of a spouse who gives up a career or otherwise makes financial sacrifices for the other spouse. For example, this can be used to protect a spouse who gives up a career to stay home and raise children or a spouse to supports the other financially while they attend school. In these cases, the prenup can offer protection by guaranteeing the spouse receives compensation for this sacrifice if the marriage ends.

Reason #13- Build a firm foundation for marriage.
Finances are a leading cause of divorce, whether it is due to financial struggles during the marriage, concealed financial problems of one spouse, or some other cause. Sitting down to create a prenup requires both parties take a good look at and reveal their full financial situation. This open discussion about finances can help build a strong foundation for marriage.

Reason #14- A prenup allows both spouses to leave a marriage that isn’t working.
Many people find themselves trapped in an unhappy relationship because they are not financially strong enough to leave. This is especially true when children are involved and one spouse stays home to care for the children or doesn’t make enough to support themselves and their children alone. A prenup can give both spouses the financial protection they need to end a marriage that no longer works.

Reason #15- It can reduce pressure on the relationship.
A prenup acknowledges that the marriage may end, but this can work to reduce stress on both spouses. The prenup can clearly lay out what will happen in the event the relationship ends and give each spouse the financial protection they need to understand that their lives will not be destroyed by a divorce. This can work to relieve stress on the relationship and improve honesty.

ontario prenup agreementReason #16- It protects both spouses from an unfair settlement.
Everyone has heard a divorce horror story, such as a man who lost most of his pension and home in a divorce after a short marriage or a woman who stayed home to raise children for decades only to be left for another woman with no job skills or work history. A positive feature of a prenuptial agreement is it is created when everyone is happy in the relationship for a solid and fair arrangement.

Reason #17- It takes the vengeance out of divorce.
Because a prenup lays out clear terms for a financial settlement, it reduces the frustration of an already stressful situation. Because emotions often run high when a relationship ends, a prenuptial agreement also prevents a vengeful spouse from trying to take everything or holding out purely out of malice.

Reason #18- It avoids the drawn-out legal battle.
A divorce can happen very quickly or it can draw out for years if it is contested and both spouses cannot come to an agreement. A prenup ensures a settlement will happen as quickly as possible because all major financial issues have already been addressed. Instead of spending months or even years in a courtroom and arguing with your spouse, you can move on and begin rebuilding your life.

Reason #19 – It doesn’t need to be awkward or embarrassing.
A growing number of men and women are reporting they are more open to signing a prenup than ever before as more people realize that prenups do not have to be about protecting one spouse’s assets or punishing another spouse. Getting a prenup does not need to be embarrassing or awkward. Instead, focus on the benefits of sitting down with your future spouse and how it can protect the both of you in the event of a divorce.

Reason #20 – To prevent your partner from overturning your estate plan.
In many provinces your partner has certain family law rights that override any estate plans you have made, and that can result in expensive litigation. A prenup is an essential part of an estate plan, because it ensures that your assets are distributed as you want them to be when you pass away.

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.

What Can & Can’t Be In A Prenup

What can be included in a prenup?

A prenup can deal with the following:

(a) division of property on separation or death;

(b) ownership of property (what is owned jointly and what is owned separately);

(c) inheritance of property;

(d) spousal support obligations; and

(e) the right to direct the education and moral training of their children.

You can include pretty much anything else that is not prohibited. So, for instance, you can require that a spouse designate the other spouse as beneficiary of life insurance policies, RRSPs, and pension plans, or state that a certain residence is to be designated a matrimonial home. Another common issue that people deal with in a prenuptial agreement is what happens to any pets.

What canNOT be included in a prenup? There are a number of limitations to what can be included in a prenup. They can’t deal with the following:

(a) custody of or access to children;

(b) child support; and

(c) clauses considered illegal or immoral.

Clauses relating to fidelity or infidelity are generally not enforceable – for instance a clause stating no spousal support is payable if a spouse commits adultery would not be enforced by a court.

Similarly, you can’t put into your prenup any provisions regarding sex during your marriage.

As well, a court is permitted to set aside a provision if the court believes that it is unjust. What may be just now may be unjust twenty years from now, so it pays to carefully consider all possibilities of what can happen in the future.

What can a prenuptial agreement say about a matrimonial home?
Can a prenup protect the matrimonial home? In short, yes.

There is a lot of misinformation out there about matrimonial homes. Yes, a prenup can deal with *the ownership* of a matrimonial home. So, for instance, you can set out in your agreement that one person owns the matrimonial home and retains ownership of it if your marriage ends.

However, note that there are two other legal rights to the matrimonial home that cannot be dealt with in a prenuptial agreement: possession and alienation. Possession deals with who has the right to live in the matrimonial home. Essentially, a prenup cannot kick a person out of the matrimonial home, even if they do not own it. Alienation deals with the fact that you cannot sell or mortgage the home without your spouse’s permission. The idea here is that just because a marriage has ended a spouse cannot find themselves kicked out of the matrimonial home or have it sold underneath their feet.

What can a prenuptial agreement say about assets acquired after marriage?
A question I frequently get is whether a prenuptial agreement can deal with assets that you acquire after you get married. The answer is yes. A prenup can deal with assets, regardless of when they are acquired, either before or after marriage.

What is the relationship between prenups and wills?
A prenup deals with what happens when a relationship ends, and a relationship can end via death rather than separation. So, to a certain extent you can deal with what happens to your assets in regards to your spouse if you pass away. However, you will still need to prepare a will.

Typically, a prenup can deal with your estate in one of five ways:

1. It can require a spouse to leave certain (or all) assets to the other.

2. It can allow the surviving spouse to stay in the matrimonial home for a period of time (even the rest of their life), and set out conditions (e.g. how expenses are to be handled).

3. It can oblige the surviving spouse not to contest a will.

4. It can oblige the parties not to change their wills.

5. It can release the parties from any estate law obligations to each other. This is typically done in remarriages, where the couple may have children from a previous relationship whom they want to inherit their assets.

If you’re not sure what you want, then you can simply deal with everything in your will. If you plan on leaving significant assets to someone other than your spouse, it is best to deal with this in your prenup.

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.

Prenup Template

Here is a template of some of the terms that may be included in a prenup:

COMMENCEMENT

  • Names of parties

RECITALS

  • Date of marriage or intended marriage
  • Purpose of agreement
  • Children from previous relationships

PROPERTY DIVISION

  • Property existing on date of marriage
  • All property to be kept separate
  • Some property to be kept separate
  • Particular items of property to be kept separate (e.g. a home or business)
  • Joint property to be divided equally
  • Some property to be shared equally
  • Property acquired after marriage to be shared equally
  • Sharing increases in net equity of property
  • No constructive or resulting trust interests in property
  • No quantum meruit claims
  • Gifts between the parties
  • Valuation of property upon separation or death
  • Sale of property upon separation or death
  • Resolving property disputes

SUPPORT OBLIGATIONS

  • No spousal support
  • No spousal support if short-term relationship, lump sum spousal support if medium-term relationship, regular spousal support if long-term relationship
  • Spousal support only payable if there are children or one party is disabled
  • Calculation of spousal support on separation
  • Length of spousal support on separation

HOUSEHOLD EXPENSES

  • Treatment of living expenses during relationship
  • Treatment of finances during relationship

MATRIMONIAL HOME

  • Description of matrimonial home
  • Ownership of matrimonial home
  • Payment of home expenses
  • Changes in ownership of matrimonial home due to length of relationship
  • Division of proceeds of sale of matrimonial home
  • Upkeep of matrimonial home
  • Renovations to matrimonial home
  • Possession of matrimonial home on separation or death
  • Option to purchase matrimonial home on death of other party
  • Furnishings in matrimonial home

BUSINESS INTERESTS

  • Joint corporate interests
  • Sale of business
  • Valuation of business upon separation or death
  • One party working for other party’s business
  • Shotgun Buyout

OTHER PROPERTY

  • Cottages
  • Investment properties
  • Pensions
  • Life Insurance
  • Debts

TAX CONSEQUENCES

  • Tax consequences of transfers of property on separation or death

ESTATE PLANNING

  • Division of assets on death (can be different than from division upon separation)

MISCELLANEOUS

  • Legal expenses for negotiation and preparation of prenuptial agreement
  • Enforcement of prenuptial agreement
  • Entire agreement
  • Severability of terms of agreement
  • Jurisdiction of laws of agreement
  • Independent legal advice regarding prenuptial agreement
  • Financial disclosure
  • Effective date of agreement
  • Parties’ signatures

Manitoba Prenup Template

Here is part of a Manitoba prenup, to give you an idea what a prenup looks like:

Recitals

1.04 Each of the parties is the owner of certain assets which have been acquired prior to the cohabitation and intended marriage and each party intends to maintain all of their assets as their sole and separate property, free from any claim thereon by the other now and in the future, except as may be varied by the terms of this Agreement.

1.13 The parties wish to provide by this Agreement for a scheme of property ownership, disposition, sharing and entitlement governing each of their assets, debts and liabilities which presently exist or which may exist in the future, and to settle by agreement their financial rights and obligations with respect to each other and with respect to the rights that will accrue to each party in the property and estate of the other by reason of their cohabitation and/or marriage, and to waive and release their rights that exist pursuant to various statutes and at common law, and to accept in lieu of and in full satisfaction and discharge of all such rights the provisions of the within Agreement.

1.15 The parties acknowledge that this Agreement is a “spousal agreement” as that term is defined in The Marital Property Act. 5.01 The parties acknowledge and agree that each has fully disclosed to the other the real and personal property of any significant value in which he or she has any interest and each party acknowledges the sufficiency of such disclosure, both as to form and as to substance.

Property Division

6.01 The Marital Property Act and amendments thereto and specifically each provision therein shall be inapplicable to Arthur’s and to Jennifer’s assets and separate assets, debts and liabilities and, further, wherever there is a conflict between the statute and this Agreement, this Agreement shall prevail. The parties intend that this Agreement shall be and be deemed to be a spousal agreement as defined in The Marital Property Act.

Spousal Support

9.01 Arthur acknowledges that he is not substantially dependent upon Jennifer and is self-supporting and is able to support himself now and in the future, and hereby covenants and agrees that there shall be no obligation on Jennifer to pay maintenance or financial support to Arthur presently or at any time in the future. Arthur releases Jennifer from any demands or claims whatsoever in respect of his rights as husband to maintenance and support by Jennifer, whether such rights arise by common-law or pursuant to any legislation presently in force or which may come into force at any time in the future and in particular under The Family Maintenance Act or The Divorce Act, 1985. Arthur acknowledges that this waiver forever bars any application for alimony, maintenance or support at any future time, notwithstanding any subsequent change in the circumstances of either party, no matter how catastrophic or unforeseen.

9.02 Jennifer acknowledges that she is not substantially dependent upon Arthur and is self-supporting and is able to support herself now and in the future, and hereby covenants and agrees that there shall be no obligation on Arthur to pay maintenance or financial support to Jennifer presently or at any time in the future. Jennifer releases Arthur from any demands or claims whatsoever in respect of her rights as wife to maintenance and support by Arthur, whether such rights arise by common-law or pursuant to any legislation presently in force or which may come into force at any time in the future. Jennifer acknowledges that this waiver forever bars any application for alimony, maintenance or support at any future time, notwithstanding any subsequent change in the circumstances of either party, no matter how catastrophic or unforeseen.

Child Support

10.01 The parties agree that Arthur shall not be responsible for the support of Jennifer’s child, Alexander, nor shall Arthur stand in loco parentis to the said child in any circumstance whatsoever.

10.02 The parties acknowledge and agree that Jennifer is hereby forever and absolutely barred and estopped from bringing any application or claim against Arthur for child support for Alexander under The Divorce Act, 1985 (including an application under Section 17 for a variation of support) or The Family Maintenance Act or any other similar legislation, whether Federal and Provincial, or any successor legislation and that this Agreement may be pleaded and shall be accepted as a complete bar and defense to any such claim that may be advanced contrary to this provision.

Pension

11.01 The parties acknowledge that Arthur has been contributing to a pension plan through his employment with the University of Manitoba. Jennifer releases Arthur from any and all claims and rights that she may have, have had or afterwards may acquire in Arthur’s pension plan(s) or benefits, whether the plan is administered federally or within a province, and will execute such documents as are required to give effect to this intention pursuant to The Pension Benefits Division Act or The Pension Benefits Act.

11.02 Jennifer covenants and agrees that should she at any time receive a portion of the pension benefit credits accumulated by Arthur pursuant to his employment with the University of Manitoba, she shall reimburse Arthur for any and all sums received by her. If, as a result of any application, legislation, Court Order or other reason whatsoever, Jennifer receives any payment or benefit either directly, indirectly or otherwise from Aurthur’s pension plan, Jennifer shall immediately repay to Arthur the entire payment or benefit received and shall, if needed in order to give effect to the intent of this and the preceding paragraphs hereof, consent to a Judgment against her in any amount equivalent to the future benefits or payments to be received and shall in addition reimburse Arthur for any and all costs incurred in his enforcement of this provision. If the said payments or benefits arise as a result of any action or application by Jennifer to alter the intent of this and the preceding paragraphs hereof, the costs shall include all solicitor costs and disbursements necessary to defend or negotiate the actions brought by Arthur. Jennifer agrees that she shall do all such things and sign all such documents as may be necessary to enforce the spirit and intent of this provision and to ensure that Arthur shall retain intact any and all pension plan as if they had never cohabited.

11.03 The parties acknowledge that Jennifer has been contributing to a pension plan through her employment with the Canadian Broadcasting Corporation. Arthur releases Jennifer from any and all claims and rights that he may have, have had or afterwards may acquire in Jennifer’s pension plan(s) or benefits, whether the plan is administered federally or within a province, and will execute such documents as are required to give effect to this intention pursuant to The Pension Benefits Division Act or The Pension Benefits Act.

11.04 Arthur covenants and agrees that should he at any time receive a portion of the pension benefit credits accumulated by Jennifer pursuant to her employment with the Canadian Broadcasting Corporation, he shall reimburse Jennifer for any and all sums received by him. If, as a result of any application, legislation, Court Order or other reason whatsoever, Arthur receives any payment or benefit either directly, indirectly or otherwise from Jennifer’s pension plan, Arthur shall immediately repay to Jennifer the entire payment or benefit received and shall, if needed in order to give effect to the intent of this and the preceding paragraphs hereof, consent to a Judgment against him in any amount equivalent to the future benefits or payments to be received and shall in addition reimburse Jennifer for any and all costs incurred in his enforcement of this provision. If the said payments or benefits arise as a result of any action or application by Arthur to alter the intent of this and the preceding paragraphs hereof, these costs shall include all solicitor costs and disbursements necessary to defend or negotiate the actions brought by Jennifer. Arthur agrees that he shall do all such things and sign all such documents as may be necessary to enforce the spirit and intent of this provision and to ensure that Jennifer shall retain intact any and all pension plan as if they had never cohabited.

Payment

12.01 Arthur agrees to pay to Jennifer the sum of $20,000.00 within thirty-one (31) days of the date of the marriage.

12.02 In the event that Jennifer challenges the validity of this agreement in any manner whatsoever, Jennifer agrees that she shall immediately repay to Arthur the sum of $20,000.00 plus interest at the rate of 6%, compounded annually, the calculation of the interest to commence on the date upon which Arthur paid to Jennifer the sum of $20,000.00.

Opt Out of Family Law Regime

15.01 Each party hereby waives and renounces any and all rights and claims which he or she may have now or in the future, to advance a claim in equity against the assets of the other, and more particularly, each party hereby waives and renounces the right to advance a claim by way of constructive trust, resulting trust, unjust enrichment, quantum meruit or other equitable remedy as against the other. This provision may be plead as a specific bar and complete defense to any such action.

15.02 The parties specifically intend and agree that The Marital Property Act including Part IV, The Homesteads Act, The Dependents Relief Act, The Homesteads, The Marital Property Amendment and Consequential Amendments Act, The Intestate Succession Act, The Family Maintenance Act, The Married Women’s Property Act, and corollary relief under The Divorce Act or any like legislation or law of Manitoba or the Government of Canada shall not apply to them, their estates and their property, except as specifically provided herein.

Indemnification

18.01 The parties hereto mutually covenant and agree each with the other that each shall save harmless and shall indemnify the other with respect to all and/or any breach or breaches of this Agreement including but not restricted to any fees, costs or disbursements incurred by the other party in defending or prosecuting any action resulting from the action of the other inconsistent with the provisions hereof, including any attempts to set aside, invalidate or vary any of the provisions herein, except where mutually agreed to in writing and executed with the same formality as this Agreement, and with independent legal advice.

Parties Understand Agreement and Rights; No Duress

23.01 The parties each acknowledge that:

(a) Arthur and Jennifer have each had independent legal advice and each has full knowledge as to the significant assets, debts and liabilities of the other;

(b) Each has read this Agreement in its entirety and has full knowledge and understanding of the contents hereof and signs the Agreement and accepts the same to be a satisfactory and fair settlement of the rights of the parties;

(c) Each understands their respective rights and obligations under this Agreement, the nature of this Agreement and the consequences of this Agreement;

(d) In signing this Agreement, each does so voluntarily and without undue influence, duress, fraud, coercion or misrepresentation;

(e) Each party represents that they are not suffering from any psychiatric, psychological or emotional impairment that would impact upon their ability to understand the nature, meaning or consequences of this Agreement.

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.

Who Needs a Prenup?

Do you need a prenuptial agreement? There are a wide range of people who can benefit from a prenuptial agreement:

  • people who believe family law treats unmarried couples unfairly
  • people who want to avoid an expensive legal case if their relationship ends
  • people entering second relationships
  • people with estate plans
  • people who own a business
  • people who own a home
  • people with more assets or a higher income than their partners
  • people who expect a signficant inheritance or who will be taking over a family business
  • couples where both parties have significant assets
  • couples where one party has significant debts
  • people who are economically weaker than their partners and want economic protection upon separation or the death of their partner
  • people with children from a previous relationship
  • people who are foregoing a career due to the relationship

Even if you decide that a prenup is not appropriate for you, going through the discussions with your partner is beneficial. It is a good idea to know what your partner’s assets, liabilities, and income are, what their attitude to handling money during is, and what they would consider fair if your relationship ever ended. And it cannot hurt for you to obtain a basic knowledge of what family law is all about.

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.

Prenup Thoughts

To many people, the idea of a prenup is repulsive. But the reality is that if you are cohabiting with someone else, you already have a cohabitation agrement, whether you know it or not. This contract or agreement is provided to you courtesy of the government. It is normally known as the Family Law Act or Family Relations Act.

This Act sets out what happens when your relationship ends. Who gets what. How much support is payable. What happens with the children. And your relationship will end – if not by separation, then by death.

The problem is that the government’s contract is not always fair, nor does it provide what you want or expect to happen if your relationship should end. In many cases, the law is uncertain and it is expensive to go to court to secure the rights you may have.

For instance, did you know that in some provinces if you live with someone without marrying, you could find that at the end of a 20-year or longer relationship, you wind up with nothing while your partner ends up with everything. Again, there are ways to find that your spouse has been unjustly enriched at your expense, but that is one of the most complex and unpredictable areas of family law, and you will need to pay a lawyer tens of thousands of dollars to fight this, spend many months or even years fighting this, and there is no guarantee you will be successful.

Did you know that a prenup can be a useful estate planning tool? Without a cohabitation, your partner may be entitled to more than what you provided for your partner under your will.

As well, you will be putting your business at risk if you are in business with someone who does not have a prenup.

We see a lot of people every day going through separations who are getting hurt tremendously. A lot of this could have been prevented if they had entered into a prenup. Don’t fall into this same trap!

It is never too late to enter into a prenup. Even if you are in a relationship, you can still enter into one.

So, take the time to browse through our site and see whether a prenup is right for you.

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.

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Prenup Agreement Lawyer