White. A usual, basic, and thematic color of weddings. It’s in everything on that important day: from the wedding dresses to flowers, and in all aspects of the decor. However, some couples prefer to have another thing of white (a black-and-white, that is) before taking those marital vows — a premarital agreement.
In this article, we’ll discuss premarital or prenuptial agreements, how they’re made, how they work, and how your lawyer can help with such documents.
This article is for those who are wondering if such an agreement is for them and want to know everything else about these agreements.
What are premarital agreements?
A prenuptial (prenup) or premarital agreement is a legally binding contract between two people who will eventually be married. When couples enter a common-law relationship, the agreement is usually called a cohabitation agreement. Legally, they’re also called marriage contracts or domestic contracts. The term marriage contracts are also used when the agreement is entered after the marriage.
These agreements mainly set the bounds of the relationship between the couple (or eventual spouses). It’s not just about the properties of the couples, but also about all other assets and debts during or after the marriage, such as:
- an enumeration of the different property or assets
- the terms of ownership of the properties listed in the agreement
- the method of dividing the properties, in case of separation or divorce
- the rights and obligations after a separation or divorce (e.g., spousal and child support)
As such, it may also govern how the couple or spouses will go through their separation or divorce. However, a prenuptial agreement is not restricted to these topics; it may also cover any other matter in the settlement of their affairs after separating.
Watch this video as a primer of what a premarital agreement in Canada is all about:
We’ll discuss more of these below. But if you want to talk to a lawyer about prenups, check out our directory of the best family lawyers in Canada as ranked by Lexpert.
Laws governing premarital agreements
Premarital or prenuptial agreements are governed by common law. Each province and territory also have their own statutes on family law, usually called Family Law Act, that govern these agreements, among others. In Québec, its Civil Code governs marriage contracts.
It is under these laws that these agreements are called marriage contracts, although it’s also a term used by those who enter them before or after their marriage.
Regardless of the designation, these agreements are the same — a contract that controls, to a certain extent, the rights and obligations of the couple, during and/or after the marriage.
Features of premarital agreements
If you’re wondering whether a premarital agreement (or a cohabitation agreement for common-law unions) is good for you, here are just some of its features to ponder on:
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lays down financial responsibilities: through a prenup, you and your spouse can control who is responsible for any financial obligation that may arise during the marriage; this can be as little as who pays the groceries, or as significant as who covers the mortgage or even hospital bills
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protects separate properties: absent any prenup (or a separation agreement), you and your spouse’s properties will be split into half after a divorce or separation; however, through a prenup or a separation agreement, you and your spouse can exclude some properties, which shall remain yours after the divorce or separation
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ensures child and spousal support: one of the agreements in a prenup is the amount of child and spousal support in the event of a divorce or separation, and all other details related to it (e.g., how it is given or for how long it should be)
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keeps the family business intact: when the family has established a business, or when one of the spouses have a significant amount of business interest in another, having a prenup will help the family facilitate what happens to such business or interests after a divorce or separation
A premarital agreement prevents future problems, both while the couples are still together and even if after they’ve parted ways.
What are the requirements for a premarital agreement to be valid?
As the name suggests, a prenuptial agreement must be made before the wedding. Everything else must be set in writing before the couple exchange “I do’s.” However, the law provides more requirements for a premarital agreement to be legally valid.
The following are the common requirements found among provincial and territorial family laws for the validity of premarital agreements:
- it must be in writing, although there’s no fixed format for it
- signed by the parties, specifically the agreeing couples
- witnessed by at least two, legally capable persons
When not followed, these agreements are invalid and unenforceable. However, some provinces may require stricter requirements, in addition to these three. For instance, some provinces may require that the contract also be notarized.
This is why it’s important to consult with a family lawyer when entering into a premarital agreement, because some formalities must be followed.
What are the rules for premarital agreements in Canada?
Below are some of the general rules for premarital agreements that are applicable in Canada. If you want to know more about specific rules in your province or territory, it’s advisable to hire a family lawyer near you.
Applicability of premarital agreements
Premarital agreements in Canada are enforceable, save for some court interventions where it can set aside or render it ineffective upon certain grounds. Creating such an agreement is also gender-free; however, those who are under the legal age who want to get married may have to satisfy other requirements under the law.
For instance, here’s how prenups or marriage contracts apply in Ontario:
Looking for law firms to help you with your premarital agreement? Head over to our directory of the Lexpert-ranked best law firms in Canada for family law.
Amending an existing premarital agreement
As long as it has not been amended or revoked, a premarital agreement is valid and binding among the parties. When amending an existing prenup, the provincial and territorial family law statutes lay down the requirements for it to be valid.
Most of these statutes require similar steps when executing and amending one, such that it must be:
- in writing
- signed by both parties
- witnessed
- notarized
Limitations of premarital agreements
Common law and statutes on family law have put certain limits on premarital agreements. Another reason why consulting with a family lawyer is necessary is that you’ll be able to know how to properly execute a prenup, without any hangups.
Court interventions on marriage contracts and agreements
Of course, courts can review the validity of a premarital agreement whenever a party files a case before it. Based on its determination, it can set aside the whole agreement, or some portions of it, when it violates the provincial or territorial family statute.
It means that the grounds for its setting aside or non-enforceability varies per province and territory. Here are some of the common grounds:
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misrepresentations: for instance, one of the basic requirements in a prenup is that there must be full disclosure of the finances of both parties; when there are grave misrepresentations in these disclosures, those are grounds for non-enforceability
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waiver of support: there are agreements that may limit or even waive the support of a legal dependent (e.g., spouse and children) which are unfair on the person whom the support is limited to or waived
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certain parenting arrangements: if based on the evaluation of the court the provision regarding parenting arrangements (refers to child custody that is effective after the divorce) is not in the best interests of the child
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fraudulent agreements: when the agreement has been entered into without the consent of the other party, or when it’s not clearly understood by the other, or when it’s clearly unconscionable
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fairness on assets: when an agreement is legally unfair to the other party, the court may order that the assets in question be divided and distributed according to what an appropriate statute says
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when asked by a creditor: if a provision in a premarital agreement or marriage contract is done to evade the payment of a creditor, then the creditor can petition the court so that it will not apply to them
A common theme on these grounds is a violation of the law on contracts, including:
- lack of consent and truthful disclosure
- fraud, manipulation, and compulsion
- improper execution of the agreement
If you’re the offended party because these are present in your agreement, it’s proper to consult with a lawyer so that it can be declared invalid by the court.
Matrimonial or family home
One of the explicit exceptions to what can be stipulated in a prenup, or any other pre- or post-marriage contract, is the matrimonial or family home. Under the provincial and territorial family laws, a family home (its full value and/or the increase of its value) must be shared between the spouses after divorce.
By way of example, Ontario’s Family Law Act says that any provision in a marriage contract that limits a spouse’s rights under the same law is unenforceable. Also, if the family home was gifted or received as an inheritance by any or both the spouses, it may not be excluded from being divided equally after the divorce.
How can lawyers help their clients who want to make a premarital agreement?
While it may not be required to have a lawyer snooping around your family matters, drafting a premarital agreement may be one of those instances that you’ll probably need one. Note that each spouse may have to be represented by a separate counsel, just to make sure that each is getting independent advice.
Key contents of a premarital agreement
Family lawyers can help you down to the tiniest details that your prenuptial agreement should contain. Since its goal is to prevent any dispute by laying down the rules in advance, these documents should not be the source of vagueness from the start.
Through a family lawyer, you’ll know what your prenup should contain, such as:
- a full financial disclosure of the assets and debts of both parties
- provisions on spousal and child support, or even parenting arrangements
- division of the family properties after a divorce or separation
- estate planning provisions, which may also be contained in a will
- securing the business interests of one or both spouses in the family business
These are just suggestions, since the specific terms in a premarital agreement will depend on the wants and needs of the family. This is also where your family lawyer can help you — putting the circumstances of the family into perspective, and on paper.
Separating without a prenup
When you choose not to have a premarital agreement, your family lawyer can still guide you on what happens afterwards. However, things will be much easier if you have a premarital agreement with your spouse in the first place.
If you have separated without any prenup, the court will have to intervene to decide on your behalf, especially if you and your spouse cannot agree on certain things. Although post-divorce or -separation matters may also be addressed extrajudicially (e.g., through mediation).
Premarital agreement: that other white in weddings
We may all be familiar with or have even heard about premarital or prenuptial agreements. But while it may seem antagonistic, or cynical even, to do these kinds of things, this white piece of document is a lot more when you come to think of it.
Aside from ensuring that the family and the children are taken care of, it maintains that peace that the family once had, even until after a divorce or separation. While the best we can do is hope that we’ll never have to use that premarital agreement, it’s better to be prepared than not.
If you need a law firm that will help you and your future spouse with a premarital agreement, you can also check out this page of Canada’s Largest Law Firms.