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Jun

26

Prenuptial Agreement Forms (Part 1): Introduction…

prenuptial agreement ontario

Prenuptial Agreement

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to getting a prenuptial agreement, you should seek professional assistance (e.g. make a post on Dynamic Legal Forms). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you.

Prenuptial Agreements (Ontario)

This is the first of a series of blog posts I’m writing about prenups or prenuptial agreements for Ontario.

What is a Prenup?
A “Prenuptial Agreement” is a written contract between two people who intend to be married. This Agreement differs from a Cohabitation Agreement because the parties aren’t necessarily cohabiting together (i.e. living together in a conjugal relationship). A Prenuptial Agreement refers to the fact that it is entered into BEFORE marriage. During the course of the marriage, however, the couples may enter into a similar contract which is called a “Marriage Contract”. The name doesn’t really matter: it’s just important to realize that they can be entered into prior to or during the marriage. These Agreements deal with the parties’ respective rights and obligations during and after their marriage (or on death) and can deal with things like: ownership or division of property, support obligations, the right to direct the education and moral training of children, and any other matter in the settlement of their affairs (s. 53 of the Ontario Family Law Act). Importantly, a Prenuptial Agreement CANNOT say who will have custody of, or access to, children if the relationship ends. Furthermore, a Prenuptial Agreement cannot prevent a spouse from being in possession of the matrimonial home – irrespective of who owns it! Finally worth mentioning is that a Prenuptial Agreement does not need to deal with all rights and obligations concerning the relationship: it can only be concerned with one asset (e.g. a house) or one obligation (e.g. support to one party upon termination).

When are they used?
Prenuptial Agreements are used by couples who are not necessarily living together but who plan on getting married. These Agreements are used by parties who want certainty, predictability and control over their financial affairs in case the relationship breaks down. There are a number of reasons why couples or particular spouses may insist in having a Prenuptial Agreement. First, a spouse who is wealthier than the other spouse may want to avoid having to share their increased wealth if and when the marriage breaks down. With a Prenuptial Agreement, certain assets – such as pensions, real estate, etc. – can be kept away from the other spouse if this happens. Second, a Prenuptial Agreement can be used to make special arrangements for particular property in which one or both spouses have an interest. Such property may include business interests (e.g. partnerships, corporations, etc.). The Prenuptial Agreement may allow the parties to determine who owns what upon a breakdown of the marriage, instead of just having legislation and courts make that determination. Finally, a Prenuptial Agreement can be used to establish specific spousal or child support obligations in advance of the marriage breaking down.

What are the legal requirements for a valid and enforceable Prenup?
The legal requirements for a Prenuptial Agreement in Ontario include the following:

  1. The parties must make full disclosure of their financial assets, liabilities, income and expenses;
  2. The contract must be in writing and signed by each party before a witness; and
  3. The contract must be entered into voluntarily (i.e. no duress, undue influence, unconscionability, etc.).

It is advisable that each party retain separate legal counsel to protect their rights and promote their interests.

In the next blog, I’ll discuss how a prenup can be challenged.

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