Prenuptial Agreements — or Marriage Contracts as they are known in Canada — do hold up in Court. However, they hold up in Court if they are based on full disclosure as to income, assets, debts and liabilities and, most importantly, they seem fair.
A Prenup, which is completely one-sided, may well be set aside by the Court because it looks and seems unfair. Also, Courts in cases of long traditional marriages or middle length marriages where there have been children, are not eager to enforce a complete release of spousal support.
Not only that, but Marriage Contracts run the risk of souring a marriage before it even occurs.
A Marriage Contract that is suddenly demanded a few days before the marriage without prior warning or, at least, warning as to the content, may well be looked upon by the Court as coercive and may not be enforced.
If you want a Marriage Contract signed, then start well in advance of the wedding date, and discuss it with your intended spouse, making sure that it is fair and addresses the concerns of both sides. If someone is being asked to give something up, then they should get something in return.
Years ago, I had a client who had been married before and badly burned in the divorce. He wanted his intended bride to give up any interest in his business so that the bank would continue to fund it. He wanted a Marriage Contract, as the bank badly wanted the contract to be signed as well.
In lieu of her obtaining an interest in his business, he set up a gifting program by way of RRSP each year, so that his future bride would have her own assets over which she would have full control, and which would also be omitted from any future sharing with her. Also, because he brought a house into the marriage, he wanted it to be exempted from sharing — but agreed to give his future wife 5% interest in the home for each year of marriage, which meant that after ten years of marriage she would be a half owner.
The contract felt fair — and was fair — and was signed. The parties are, at the time of this writing, still happily married after more than 20 years.
Also provide for full independent legal advice. You can’t have one lawyer. Each person must have an independent lawyer, and if you want a spouse who is in a weaker bargaining position and has fewer assets to sign giving up rights, then you pay for them to have excellent legal advice. It does not make their lawyer your lawyer, but it does provide a measure of confidence to the other side that you are serious about having them protected and well guided.
The key notes to a successful Prenup are, therefore,
- Advance notice;
- Full disclosure;
- Fairness;
- Not asking for no sharing of any assets or, indeed, full release of spousal support unless something is given in return;
- For a Marriage Contract, both sides should have an experienced family law lawyer, because Prenups require excellent bargaining skills and, again, require both sides not to feel cheated.
Judith Holzman is a collaboratively trained family lawyer who has practiced for over 33 years in the Toronto and York Region area. She has participated in amendments to the Family Law Act (provincial) and the Divorce Act (federal) in the area of religious divorce.
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