Strategic Toronto Family Lawyers for Prenuptial Agreements and Marriage Contracts
For couples where one or both spouses are bringing significant assets into a marriage, a marriage contract, or prenuptial agreement, is an important part of wedding planning. In the unfortunate event of separation or divorce, it can save both parties emotional distress, and legal expense, by setting out their mutual obligations in advance.
It is advisable to consult with a knowledgeable family lawyer before you enter into a prenuptial agreement with your partner, particularly if you own a business, or have other significant financial assets that you would like to protect in the event of a marriage breakdown.
At Financial Litigation, we offer strategic advice about prenuptial agreements to clients that dives deep beyond the basics that many other family lawyers address. We combine our deep knowledge of family law, with our experience in financial litigation to provide our clients with focused, personalized advice that centres on the financial implications of marriage contracts and helps them with proactive wealth planning.
How a prenuptial agreement works
A prenuptial agreement is a legal contract. Both parties must negotiate in good faith and enter the contract voluntarily. As part of this process, both spouses must receive independent legal advice and have their own lawyer to advise them, review the contract, and protect their best interests.
There are a great number of things that can be addressed through a “prenup”, including:
- How property and assets will be divided;
- Treatment of the matrimonial home;
- Exclusion of personal assets, including inheritances and family trusts;
- Payment of spousal support;
- Treatment of children from previous relationships; and
- Protecting professional and business interests.
Marriage contracts can also be entered into after marriage. This may be desirable if there have been significant changes in the income or financial circumstances of one, or both spouses. For example, if one spouse leaves the workforce to care for children, they may wish to address spousal support obligations. Alternatively, if the couple intends to use one spouse’s inheritance to purchase a family home, they might set out how those assets should be treated in the event of divorce.
Making better investment decisions about marital assets
Although the primary purpose of a prenuptial agreement is setting out a roadmap for how each spouse’s assets will be treated in the event of divorce, it can also help couples make better decisions about how to handle their assets during the marriage.
Prior to entering into a marriage contract, both partners are required to disclose the entirety of their holdings, debts, and assets. By discussing these openly, couples can begin their lives together with a better plan for managing finances throughout the marriage, such as identifying which debts to target first, or using investment vehicles that might maximize returns.
Our team has close relationships with financial experts that can help clients identify and value assets, to help ensure that any marriage agreement properly reflects their financial circumstances.
How Are Prenuptial Agreement Created?
A prenuptial agreement is a written contract created by two people before they are married. Individuals can draft and create their prenuptial agreements. However, without advice and help from a lawyer or legal expert, it’s easy for the agreement to be invalidated or for you to miss important details that should be highlighted in the contract. Both parties need to agree to the terms of the contract and that it fully discloses information about their financials and other assets.
The process of creating a valid prenuptial agreement can be confusing. It’s always important and beneficial for individuals to contact a lawyer specializing in family law matters to guide the parties through the process of creating a prenuptial agreement.
What are the Limitations of Using Premarital Agreements?
Although premarital agreements carefully outline assets, treatment of properties or businesses owned before marriage, the treatment of children from previous relationships, spousal support payments, and more, there are also limitations.
For example, prenuptial agreements cannot include child support, custody, and visitation rights for the children you and your partner share. Prenuptial agreements must also be written, signed by both parties, and should be notarized by a lawyer. Verbal agreements are not recognized by the Family Law Act.
In addition, prenuptial agreements don’t always fully protect you or your partner’s assets. For example, if one person makes significantly more than the other, a prenuptial agreement doesn’t always eliminate spousal support
Do I Need to Make A Lot of Money to have a Prenup?
No, you don’t. Partners can create prenuptial agreements to protect their finances and other assets in case of a divorce, but you don’t need to make a lot of money to get one.
Sometimes, engaged couples who have children from previous relationships can sign a prenuptial agreement to determine how their assets will be divided when they die or when they divorce. This way, they can pass on separate property to their other children while also providing support for their spouses and the children they share.
What Other Legal Documents Might be Helpful?
After getting married, you have the option of a postnuptial agreement or marriage contract. It settles your and your partner’s affairs and assets in the event of a separation or divorce. Like prenuptial agreements, postnuptial or marriage contract agreements need to be notarized by an lawyer and should be written with the guidance of a family matters lawyer.
Toronto family lawyers offering independent legal advice about prenuptial agreements
At Financial Litigation, we focus strictly on the financial elements of family law matters. Our advice is tailored to individuals and couples with high income or significant assets, including entrepreneurs and professionals who may own a business or a practice. As a business owner himself, Eli Karp understands the unique concerns that other business owners may bring to the table in protecting their assets and planning for all eventualities. To make an appointment with our team, call 416-769-4107 x1 or contact us online.