What is a Prenuptial Agreement
A prenuptial agreement Ontario is a legally binding contract you enter before marriage. In Canada, it is recognized under the Family Law Act, Section 52 and is referred to as a marriage or domestic contract. A prenuptial Agreement in Canada will sets out what will happen to your income, child custody and assets should anything unfortunate happens, such as divorce, death or a separation. These agreements mainly cover how property and spousal support is divided, but can also cover savings, investments inheritance, cars, credit card balances and also insurance policies as well as child custody arrangements in some cases. You must also disclose how much debt you have when making a prenuptial agreement. In the event of a divorce or separation, it means the inventory of assets remains the possession of the previous owner before the marriage. A prenuptial agreement is often associated with something you would do before getting married, but some couples do have them drawn up to protect their assets just in case.
Why do you need a Prenuptial Agreement?
Why is it important to have a Prenuptial Agreement in Ontario?
Prenuptial agreements are important, especially so if you own a business, you partner has previous debt or you or they have children from a previous relationship, or marriage, for whom you or your partner would want to protect your assets for. This means that in the event of re-marrying, your assets will then be protected for your children, and be passed to them, rather than going straight to your new partner. Guardianship, custody and child support cannot be agreed upon in a prenuptial agreement.
Prenuptial agreements are often best drawn up when you are at a happy point of your relationship as you can be honest with your partner and any issues that arise can then be sorted. This is in direct contrast to the divorce stage of a relationship, where sadly, things can often become very strained. Divorce can in some cases lead to financial ruin for a person as it can become very costly, both in terms of legal fees and in terms of what you could lose if your assets are not protected. Divorce can impact everything, even your credit rating, but a prenuptial agreement can protect you as everything has been agreed before which means you’re unlikely to mount up large legal bills wrangling over property and such at the divorce stage. Finances are a prominent cause for divorce, so the agreement sets a solid infrastructure for the struggles that may have caused the separation and makes sure everything is fair.
Getting a prenuptial agreement can also help you gain a better understanding of what your partner’s needs and goals before marriage and it will make it all about the relationship, as all the assets have been agreed beforehand. It will also reduce the pressure of the marriage, as some people may not feel like the can leave their partner as they are financially dependent on them, so this will give them the strength to leave as they will have support if and when it does end.
Why you should hire a Family Lawyer as opposed to using an online template?
Please do not use online Templates for Prenuptial Agreements. It would be reasonable when thinking about hiring a lawyer to draw up your prenuptial agreement, that you actually hire two as you want to make sure your agreement stays valid and shows you’ve both been given legal advice in your best interest. Should this come to court in the event of separation or divorce, then you will need a lawyer each so you both have different people representing you. Lawyers can also help you understand different issues and give you the correct advice on certain situations which online templates cannot do. Only having one lawyer to do the whole agreement for you both will be seen an unfair as there may be a conflict of interests.
If you decide to go down the online route, then your marriage contract may not be seen as binding in court. Having lawyers can strengthen the agreement as a legal protocol has been followed. A lawyer will ensure that your Prenuptial Agreement has complied with all the Legal Requirements under the Family Laws. One party could claim that they did not know what they were signing, which would make it non-binding, whereas lawyers will make sure that the contract is indisputable.
Whilst everyone should enter a marriage feeling like it will last forever, it is only reasonable that each party protect their assets in case things do go wrong later down the line.
IT IS NOT WORTH SAVING FEW DOLLARS WHEN IT COMES TO IMPORTANT DECISIONS IN YOUR LIFE!
Prenuptial Agreement Meaning
Not just for the well-to-do
We often think that prenuptial agreements are to protect the wealthy, but it can work both ways. If you consider yourself weaker, financially, then they will help decide what support you should receive after any divorce and will leave you with an ample amount of assets. One of you may give up your career to take care of children and become a stay at home parent. If so it is likely that person is not developing new skills for a job, so the prenuptial agreement could give that partner protection so they will receive settlement for making that offering.
People often believe prenuptial agreements are about protecting assets and property, but they can also cover debts that are brought into the marriage or that you obtain during your marriage. One of you may be entering the marriage with significant debt. If you separated, then this debt would be halved, just like anything else if you don’t have a prenuptial agreement. You can disclose that any debt brought into the marriage before will not be transferred to other partner and will stay as their debt when drawing up these agreements.
Another example would be if one of you was expecting to receive some inheritance during the marriage. You may not wish to share that with your partner. You can protect that with the contract to ensure it stays as yours rather than being shared, but you would need to make sure you keep the inheritance separate from anything communal.
Pensions can be a large asset in a prenuptial agreement and need to be discussed. You will be asked to sign a record that says you are waiving your right to any retirement investment in the event of a divorce. This may be separate to your agreement but will be attached to the document and will be released to everyone involved in the pensions, such as employers and pensions plan administrators on this notice.