I RECENTLY GOT ENGAGED. SHOULD WE PREPARE A PRENUPTIAL AGREEMENT OR DOES THAT SIGNAL UNCERTAINTY ABOUT OUR RELATIONSHIP?
No one likes to consider the possibility of separation and divorce when they’re just committing to a lifelong marriage but that reluctance can be very costly – emotionally and financially – if the unimaginable happens and the marriage one day breaks down.
The real benefit of preparing a domestic contract – more commonly known as a ‘prenuptial agreement’ – is honest and open communication about important issues like finances. It allows you to give careful thought to how you’d want assets divided in a way you both believe is fair and right. Otherwise, like dying without a will, those decisions would be determined by provincial laws and can be fraught with anger, hostility and even deception.
Our firm has received calls from prospective clients wondering if they should dispose of or transfer assets into other people’s names before getting separated in order to protect them from Family Law act requirements to divide them. Such untoward actions could trigger some of the nastier provisions under Family Law Act while also putting you in contravention of the Fraudulent Conveyances Act but the consequences of a marital split may have been avoided with a domestic contract. The domestic contract allows you to determine the fate of assets like a family cottage that has been passed down from one generation to the next or a business established before getting married.
In an era when many people have already launched careers and started building assets before tying the knot – perhaps even buying a house – the need for a domestic contract is an important consideration. The contract can also be an important part of an estate plan, a valid concern if one or both of you have children from previous relationships. A prenuptial agreement can also address any debt each partner brings into the marriage, such as student loans.
In order for a domestic contract to be valid, both people involved needs to sign and voluntarily agree to make the contract. Both parties should obtain independent legal counsel. Each spouse must also disclose all of their financial assets and liabilities. A domestic contract can also be drafted after a marriage takes place.
Family lawyers at Kelly greenway Bruce can provide expertise to ensure the proper drafting of your contract and its future enforceability should the need arise
The above information is of a general nature and is not intended to provide legal opinions. Readers should seek professional legal advice on the particular issues which concern them. We would be pleased to elaborate on any information contained above and how it may apply to your specific circumstances.