Prenuptial Agreement - Frequently Asked Questions
Shared goals and expectations are the foundations of a good relationship. With that in mind, Prenuptial Agreements can be viewed in a positive light. “Prenups” provide an opportunity for open, honest discussion with your partner and may help avoid future conflict. Here are the top FAQs about Prenuptial Agreements in BC.
What Is a Prenuptial Agreement?
A Prenuptial Agreement is a written, signed contract a couple enters into before they marry to deal with personal and financial matters. The most common reason couples enter into a prenup is to set out how property, debt, and spousal support will be determined if they separate in the future.
We Don’t Own Much... Do We Really Need a Prenuptial Agreement?
Yes. Prenups are not only for the wealthy. A Prenuptial Agreement can address other important matters, such as how pensions will be split, who will be responsible for debt, entitlement and limits of spousal support, what you want to happen to your estate if you die, and how living expenses will be shared during the relationship.
Keep this in mind as well: you may not have much in the way of assets or property going into the marriage, but you will almost certainly accumulate both throughout your relationship. It is better to already be on the same page with your spouse when that occurs.
Prenuptial Agreements are also highly recommended for those entering a second marriage, who have children from previous relationships, or who want to protect a family business, heirlooms, or an inheritance.
- What Are the Benefits of Having a Prenuptial Agreement
If you don’t have a prenup, the default family law rules will apply if you separate. Subject to an agreement or court order that states otherwise, BC family law says that each spouse has a right to an undivided half interest in all family property and is equally responsible for all debt — regardless of the irrespective use or contribution. For spouses with significant income disparity, or where one spouse brings greater financial assets into the marriage, the 50/50 split may not be appropriate. A Prenuptial Agreement allows you to customize the outcome without the need to resort to the courts and the default rules contained in BC family law legislation.
Another major benefit of a prenup is that it will save you in the long run. It is much more difficult to try to come to an agreement at the end of a relationship. If you can’t come to an agreement at that point, a court application will be necessary to reach a resolution, which is a more expensive, time-consuming and stressful process.
- What Do I Need Before Entering a Prenup
Each spouse should have full financial disclosure, and it is highly recommended that each obtain independent legal advice from an experienced family lawyer. Time to discuss, negotiate and review is also important, so neither spouse feels rushed into agreeing.
- Can Common-law Partners Have a Prenuptial Agreement
Yes. In BC, common-law relationships are considered equal to marriage. You are common-law if you and your partner live together in a marriage-like relationship (“cohabit”) for at least two years or if you and your partner have a child together. BC’s Family Law Act treats common-law partners as though they are married. That means the default family property regime will apply to common-law spouses unless they have an agreement or court order that says otherwise.
- What If We Are Already Married or Living Together
It is never too late. BC’s Family Law Act uses the term “agreement” and does not specify a timeline for entering an agreement. You can prepare a prenuptial agreement, postnuptial agreement, marriage agreement, or domestic contract during your marriage or common-law relationship.
- Can We Change Our Prenuptial Agreement after We Are Married?
Yes. In fact, I recommend that spouses revisit, review, and if necessary, revise or update their agreement as time goes on. You and your spouse can agree to new or modified terms or prepare an amending agreement. All other terms of the Prenuptial Agreement will remain intact unless you and your spouse agree to revoke the entire agreement. All changes or new agreements must be in writing and signed by both parties.
- Can a Prenuptial Agreement Be Set Aside?
Yes. A prenup can be cancelled by the courts for several reasons, for example, where one party was forced into signing, where the agreement is significantly unfair, or where full financial disclosure was not made by both parties to the agreement. A prenup may also be unenforceable if it does not meet the requirements of the BC Family Law Act or Canada’s Divorce Act. There is a much greater chance that a prenup will be enforceable if each spouse had legal advice from their own lawyer when creating the agreement.
If you are planning to marry and thinking about a Prenuptial Agreement, contact Valerie M. Little Law Corporation today by phone at 604-526-3333, by email at email@example.com or by completing the form on our contact page. Our law firm is devoted to family law matters and can ensure you fully appreciate the financial, personal and legal consequences of your agreement.