Why you need a Prenup – The Newest Millennial Trend

Why you need a Prenup – The Newest Millennial Trend

Written by: Nicole Natalie Garcia

 

A marriage breakdown is no easy topic of discussion. For many, even the thought of their marriage deteriorating is difficult. Domestic Contracts are legally binding contracts that are entered into by both married and unmarried individuals which outline both rights and obligations. There are three main types of Domestic Contracts: Cohabitation Agreements, Marriage Contracts and Separation Agreements. Marriage Contracts, commonly known as a “Prenup”, are prepared for those who intend on getting legally married.  Oftentimes this is because one party has or anticipates having assets that they want to ensure are protected from their spouse in the case of a breakdown in relationship.

Some choose to commit to marriage because of the deep love they have for another. Others view marriage as a sacred union, which they believe should be acknowledged by a spiritual or religious ceremony. Marriage, from a legal standpoint, is an economic partnership. If your marriage ends, the value of the property you acquire while you were married, including any increase in the value, will be divided. The division may not always be a 50% split as the amount depends on each party’s net value. After a calculation of your assets and debts are considered, a portion will remain with you and another portion will be given to your ex-spouse. This is when a Marriage Contract can help you immensely because you can dictate in advance what assets should be included, or excluded from that calculation. An experienced lawyer at Watson Labour Law can explain to you what this calculation entails and how to ensure it is in your favour should you experience a marriage breakdown. A common deterrent from preparing a Marriage Contract is the mistaken belief that the process is overly complex and meant for a certain class of individuals. This could not be further from the truth.

Marriage Contracts can be straight forward

A Marriage Contract is important because it is a legal contract between you and your partner that outlines your expectations. A Marriage Contract can be as straight forward or as complex as you choose. A Marriage Contract should discuss the following topics:

  • Assets that each party brought into the marriage;
  • Outline how those assets should be divided;
  • Determine the value of property and which party should retain it;
  • Outline spousal support obligations; and
  • Deal with the distribution of investments and inheritances.

A Marriage Contract can address the method in which your property should be distributed between you and your spouse. You can agree on a mutually beneficial proportion or the exclusion of certain assets brought into the marriage. This is beneficial for individuals who have worked hard to establish themselves prior to marriage either through purchasing a home, receiving an inheritance or investing money elsewhere. In a Marriage Contract you can outline what each party should expect in the case of a breakdown of relationship. Marriage Contracts do not need to be “one-sided”. With an experienced lawyer from Watson Labour Law, your Marriage Contract can be prepared to reflect a mutually beneficial arrangement.

Marriage Contracts are for everyday Canadians

 Some believe that their assets are minimal and so they do not “qualify” for a Marriage Contract. This notion is false. A Marriage Contract is not just for the rich and famous. In fact, the matter has less to do with the status of your life now and more to do with where you see yourself later. Everyday Canadians prepare their Marriage Contracts because they see potential for their assets to grow in the future. With an experienced lawyer, your Marriage Contract can be prepared in contemplation of acquiring more assets.

Marriage Contracts can be entered into after Marriage

If you decide to draft your Marriage Contract before you get married, you are thinking ahead! In some cases, individuals get legally married before choosing to draft a Marriage Contract. Individuals in this camp, mistakenly believe that since they are legally married, they are no longer eligible to prepare a Marriage Contract. That is simply not the case – and if that is your situation, you are not too late! You can enter into a Marriage Contract after you have been legally married so long as the Marriage Contract meets certain formal requirements (discussed below). You may have delayed on drafting your Marriage Contract and that is no problem. At Watson Labour Law we would be glad to help you through the process, no matter what stage you are at in life. We will ensure your assets now or in future are protected in case of a breakdown of relationship.

Marriage Contracts are binding

 A Marriage Contract that is skillfully prepared will be legally binding. Although it is a not a legal requirement that you have a lawyer prepare your Marriage Contract, it would be prudent to ensure that you retain one. A lawyer will explain what legislation should be followed to ensure the integrity of the Marriage Contract is upheld. The following examples may result in the contract being rendered null and void:

  1. Where one of the parties fail to disclose a significant asset, debt or liability;
  2. Where one of the parties does not understand the nature and consequences of the Marriage Contract at the time of drafting; and
  3. Where one party is under undue influence or duress (for example, where one party is being forced to sign a Marriage Contract one week before their wedding).

Failing to retain a lawyer to prepare your Marriage Contract may result in more complications down the line when one party seeks to rely on it.  Retaining a lawyer will strengthen your Marriage Contract if it is later challenged as an experienced lawyer will understand the law surrounding the matter. Other individuals want to avoid the legal fees altogether and as a result decide to prepare their own Marriage Contract. There are inherent risks in deciding to draft your own Marriage Contract such as:

  • Leaving out important formal requirements to ensure the Marriage Contract is binding;
  • Unknowingly forfeiting assets that could have been protected;
  • Including terms that cannot be dealt with in a Marriage Contract such as custody arrangement clauses;
  • Incurring costly litigation if the Marriage Contract is challenged.

Get a Marriage Contract – today!

 As is the case with any important legal document, it is best to receive proper legal advice from a lawyer and avoid the temptation of drafting a Marriage Contract on your own. The process of drafting a Marriage Contract with a lawyer can be straightforward and cooperative. An experienced lawyer at Watson Labour Law will ensure your rights and responsibilities remain our priority. We will go above and beyond to make sure that:

  • You understand your rights under the law;
  • Your Marriage Contract is clear and concise;
  • Your property is protected, ensuring fair and swift division of assets in case of a breakdown of relationship;
  • You retain full control with respect to the method in which assets are distributed such as real estate and investments;
  • You are able to expedite the Divorce process, saving you time and money; and
  • Your risk of litigation is reduced.

Call Watson Labour Law today and speak with our Family lawyer, Nicole Garcia!

 

 

 

 

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