Family Law
5 minutes reading time

Prenuptial Agreements in Ontario: Everything You Need to Know

Written by:
The Tabuchi Law Team
Published on:
The Tabuchi Law Team
March 20, 2023
The Tabuchi Law Team
March 20, 2023

What is a prenuptial agreement?

A prenuptial agreement, also known as a domestic or marriage contract, is a written agreement between two people planning to get married. It sets out how their assets and debts will be divided if they get divorced. Prenuptial agreements can also cover other matters, such as spousal support and child custody.

Why do you need a prenuptial agreement?

There are many reasons why couples might choose to enter into a prenuptial agreement. Some common reasons include:

  • To protect their individual assets, especially if one spouse has significantly more assets than the other.
  • To protect business interests.
  • To provide for children from previous relationships.
  • To clarify expectations about financial matters during the marriage.
  • To avoid costly and time-consuming litigation in the event of a divorce.

What can and cannot be included in a prenuptial agreement?

Prenuptial agreements can cover a wide range of topics, including:

  • The division of assets and debts in the event of a divorce.
  • Spousal support payments.
  • Child custody and support.
  • Inheritance rights.
  • The use of the marital home.
  • Moving expenses.
  • Legal fees.

However, some things cannot be included in a prenuptial agreement, such as:

  • Anything that would be illegal or void under Canadian law.
  • Anything that would deprive a child of adequate support.
  • Anything that is unfair or unconscionable to one spouse.

How to create a valid prenuptial agreement

For a prenuptial agreement to be valid, it must meet the following requirements:

  • It must be in writing.
  • Both spouses must sign it.
  • Two independent witnesses must witness it.
  • Both spouses must fully disclose each other's financial assets and liabilities.
  • Both spouses must have independent legal advice before signing the agreement.

Pitfalls of not having a prenuptial agreement

If you do not have a prenuptial agreement in place, your assets and debts will be divided according to the laws of Ontario in the event of a divorce. This may not be how you would want your assets and debts to be divided.

For example, if you have significantly more assets than your spouse, they may be entitled to a larger share of your assets in a divorce, even if they did not contribute to those assets. Additionally, suppose you have children from a previous relationship. In that case, your spouse may be entitled to claim spousal support on their behalf, even if you were the primary breadwinner during the marriage.

Examples of prenuptial agreements

Here are a few examples of what prenuptial agreements can cover:

  • A couple may agree that each spouse will keep their own pre-marital assets and that only assets acquired during the marriage will be subject to division upon divorce.
  • A couple may agree that one spouse will receive a specific asset, such as the marital home, in the event of a divorce.
  • A couple may agree that one spouse will pay spousal support to the other spouse for a certain period of time in the event of a divorce.
  • A couple may agree that the children from a previous relationship will be treated like children born during the marriage.
  • A couple may agree to split the costs of legal fees and moving expenses equally in the event of a divorce.

Have looked over by a legal expert

It is essential to have a lawyer look over prenuptial agreements in Ontario for the following reasons:

  • To ensure that the agreement is valid and enforceable. Prenuptial agreements are complex legal documents that must be drafted in a way that complies with all applicable laws and regulations. A lawyer can help to ensure that your prenuptial agreement is enforceable so that it will be upheld in the event of a divorce.
  • To protect your rights and interests. A prenuptial agreement can significantly impact your financial and personal rights in the event of a divorce. A lawyer can help you understand the terms of the agreement and negotiate a fair and equitable deal for you.
  • To avoid costly disputes in the future. A well-drafted prenuptial agreement can help to prevent expensive and time-consuming disputes in the event of a divorce. This is because the agreement will clearly outline the division of property and assets and other vital matters such as alimony and child support.

Here are some specific examples of how a lawyer can help you to protect your rights and interests in a prenuptial agreement in Ontario:

  • Explain the Ontario Family Law Act. The Ontario Family Law Act sets out the rules that govern the division of property and assets in the event of a divorce. A lawyer can explain the Family Law Act and help you understand how it will apply to your situation.
  • Identify and address potential problems. A lawyer can help you identify and address potential issues with your prenuptial agreement, such as unfair or unenforceable provisions.
  • Negotiate the terms of the agreement. A lawyer can help you negotiate the terms of the agreement to ensure that your interests are protected. For example, if you have significant assets, a lawyer can help ensure that the agreement protects your assets in case of a divorce.
  • Review the agreement before you sign it. A lawyer can review the prenuptial agreement before you sign it to ensure you understand all the terms and conditions. They can also answer any questions you may have about the agreement.

If you are considering signing a prenuptial agreement in Ontario, I encourage you to consult with an experienced lawyer, like one of ours, to discuss your options. They can help you to understand your rights and obligations under the agreement and to negotiate an agreement that is fair and equitable to you.

Conclusion

Prenuptial agreements can be a valuable tool for couples who want to protect their assets and financial interests in the event of a divorce. However, it is crucial to note that prenuptial agreements do not guarantee that a divorce will be easy or amicable. Please consult with a Law Expert from Tabuchi Law to ensure your T's are crossed, and i's are dotted.

Subscribe to newsletter

Subscribe to receive the latest blog posts to your inbox every second month.

By subscribing you agree to with our Privacy Policy.
Thank you for subcribing
Oops! Something went wrong while submitting the form.
Probate Tax Calculator

Ontario Probate Tax Calculator

Disclaimer
The information provided on this blog is intended for general knowledge and informational purposes only and does not constitute legal advice. The content on this blog is not a substitute for professional legal advice tailored to your specific circumstances. Laws and regulations are constantly changing, and the information provided on this blog may not be current or accurate. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the information contained in this blog. For specific legal advice regarding your situation, we strongly recommend that you consult with our firm or another qualified legal professional. Do not rely on information found on this blog as a substitute for personalized legal advice.

Here are some more interesting articles:

Information is power!

Executor vs. Trustee: Key Roles in Estate Planning Decoded

Executor vs. Trustee: Key Roles in Estate Planning Decoded

Probate court can be quite challenging and overwhelming to navigate. Executors, who are also referred to as estate trustees have a role, in the process by applying for the Certificate of Appointment of Estate Trustee and overseeing the estate affairs. Trustees are tasked with managing trusts and distributing assets accordingly. In Ontario both executors and trustees can seek advice to fulfill their duties effectively steer clear of pitfalls and handle any disputes that may arise.

Navigating Life's Milestones: Expert Guidance on Inter Vivos Trusts and Estate Planning in Mississauga

Navigating Life's Milestones: Expert Guidance on Inter Vivos Trusts and Estate Planning in Mississauga

Estate planning extends beyond creating a will. Inter vivos or "living" trusts offer advantages such as avoiding probate and protecting privacy. Lifetime gifting of assets allows for active participation in wealth distribution and potentially reduces estate taxes. A tailored estate plan, incorporating trusts and gifting, can align with your wishes and navigate legal complexities. Seek professional guidance from estate attorneys and financial advisors to maximize your planning effectiveness.

Common Law Partners: Legal Rights and Responsibilities for Unmarried Couples
Family Law
5 min read

Common Law Partners: Legal Rights and Responsibilities for Unmarried Couples

In some places common law partnerships even if not officially considered marriage can grant inheritance rights to partners. These rights differ based on the location and legal system in place. To secure these inheritance rights partners might create cohabitation agreements or formal documents detailing their obligations. Additionally asset distribution preferences can be specified in wills or trusts.