Thinking about the possibility of divorce before you even make your marriage official may seem counterintuitive, or at the very least unromantic. But in this day and age, with about 38% of Canadian marriages ending in divorce, it is only natural when entering into a union to consider and prepare for your long-term wellbeing in the event that the relationship does eventually fall apart.
A prenuptial agreement is the most common tool couples use to protect each spouse’s individual interests should divorce arise. And if you really think about it, working out these types of details with your partner before you marry, when the relationship is at its strongest, will allow you and your fiancé(e) to arrive at the fairest terms possible without being clouded by the contentiousness and emotions that may affect your communication and judgment in the wake of a marriage breakdown. Read on for more information about prenups in Alberta and throughout Canada.
What is a prenup?
A prenup—short for a prenuptial agreement—is a marital contract both you and your partner sign before you marry. This document identifies each of your individual assets and debts, as well as provides directives for how you plan to operate financially over the course of your marriage and how you would handle those issues in a divorce. Consider the following matters your prenup is likely to address:
- The establishment, use and ownership of joint credit, savings and checking accounts
- How you will file tax returns
- Entitlement to spousal support (also known as alimony) in the case of divorce
- Ownership of business entities, especially joint ventures
- Ownership of other valuable assets such as the family home and/or other real property
- Responsibility for paying off jointly accrued debts
- Entitlement to inheritance, life insurance and retirement benefits
- Other lifestyle arrangements such as child support and parental responsibilities, if applicable (sometimes this can be added to your marital agreement as a later modification if your circumstances change over the course of the marriage)
Why would you get a prenup?
Not all couples need a prenuptial agreement before they marry, but it is also a common misconception that prenups are only for the wealthy. In fact, many of the reasons you might want a prenup have to do with practicality. If one or more of the following conditions apply to you, it’s a good idea to meet with a family lawyer you can trust to discuss the benefits and options a prenup might offer you and your spouse-to-be:
- Either of you has been previously married, particularly if one of you pays or receives spousal support (alimony)
- Either of you has one or more children from a previous relationship
- Either of you owns substantial property
- Either of you owns or is set to inherit a business
- Either of you earns income over $100,000 or there is a large disparity between your incomes
How do you get a prenup in Alberta?
Getting a prenup is a fairly straightforward process. The most important distinction of prenuptial agreements is that both you and your partner must retain your own legal counsel—you cannot share a lawyer in this instance. This is because any type of pressure or intimidation into signing the document or agreeing to its terms could render the prenup invalid later on. Additionally, from a practical perspective, the prenup’s main purpose is to protect your individual finances and assets. You need a family lawyer on your side who’s concerned with your interests alone—as does your partner.
Once you and your future spouse each have your own lawyer you can still work collaboratively to draft a prenup that’s fair and protective of your assets while putting adequate consideration into the future of your relationship. Once you’ve settled on the details of your prenup and your lawyers have put it into writing, all that’s left to do is a sign.
What are the legal requirements for prenuptial agreements in Edmonton?
In Edmonton and throughout Alberta, prenups must meet certain requirements and restrictions to be enforceable. Once you and your partner have arrived at the final terms of your prenuptial agreement and the contract has been drawn up you each must sign, in front of your individual lawyers, a written acknowledgement guaranteeing the following:
- That you understand the details of the prenup, what it means, and that it takes effect once you are officially married
- That you consent to the terms of the agreement, even if it affects future claims to marital property (an enforceable prenup supersedes the Alberta Matrimonial Property Act)
- That you are signing the prenup on your own volition and free from any coercion by your partner or a third party
Additionally, a prenuptial agreement may be challenged legally or even overturned if it’s later found that you or your spouse knowingly concealed or failed to disclose financial details, if the prenup contains terms that are deemed illegal or unconscionable, or if it creates some sort of economic incentive to divorce.
Rely on an experienced family lawyer in Edmonton for support throughout the prenup process
Marriage is something to celebrate. With the family lawyers from Chadi & Company by your side, you’ll get the prenup done as smoothly as possible so you can focus on your new spouse and your future as a couple with the peace of mind that you are protected no matter what. To learn more about prenups and our other family law services, call (780) 429-2300 today or contact us online to set up a free consultation.