Marriages do not always last. When the relationship between spouses breaks down and they seek a divorce, it comes with emotional and legal challenges. If you signed a prenup before getting married, however, this can make the process easier in several ways.
A prenuptial agreement is a legally binding document that is negotiated and signed at the onset of a marriage. It plays a key role in shaping how a divorce is handled and is an agreement that will be referred to when resolving the issues that can arise from the end of a marriage.
Here is an in-depth look into what happens if you sign a prenup and get divorced.
What Is A Prenuptial Agreement?
A prenup, or prenuptial agreement, is a contract that a couple enters into upon marrying.
A prenup outlines key details about the ownership of personal and financial assets, and how these will be divided up should the marriage end. A prenup also typically contains information about stipulations relating to spousal support and other matters.
Prenuptial agreements are a proactive measure to ensure that assets and liabilities are adequately managed.
While it’s not the most romantic discussion to have before getting married, a prenup offers both parties legal protection and is worth exploring. The four areas most often focused on in a prenuptial agreement include asset division, debt responsibility, financial expectations during the marriage, and terms for spousal support.
Divorce Issues Covered In A Prenuptial Agreement
A prenup dictates how a married couple wants specific aspects of their divorce to be handled.
If you are considering a prenuptial agreement prior to an upcoming marriage or are in the process of getting divorced, here are the areas your prenup document may touch upon.
Property Division
The area where a prenuptial agreement is most often used is with property division.
Under Ontario law, assets are equalized so that each spouse has 50% of the value of property accumulated during the marriage. This operates a lot like divvying assets down the middle but there are some technicalities which affect situations like if a spouse is/has declared bankruptcy.. A prenup, however, can override this standard and specify a different arrangement. In this way, a prenuptial agreement can safeguard individual assets acquired before or during the marriage.
A prenup can include key details of property division in a divorce, such as what assets may be excluded, who will retain ownership rights to specific properties, and outline who will retain the family home.
Spousal Support Under A Prenup
A prenup also often includes terms for spousal support, referring to payments made by one spouse to the other after a divorce.
How a prenup is likely to address spousal support may or may not include the following measures:
- Waiving the right to spousal support by both parties.
- Defining a predetermined amount or duration for spousal support.
- Specifying the conditions under which spousal support is to be paid.
If circumstances have significantly changed from when the prenup was signed to the time of divorce, the courts may override the provisions or the agreement may be legally challenged by the disadvantaged party.
Please note that a prenup is not permitted to dictate any terms relating to child support. Child support is the right of the child and parties are not allowed to negotiate it away. Also, child-related matters in divorce proceedings are always determined based on the child’s best interests at the time of the divorce. Any pre-agreed terms relating to child support, even if they are written into a prenuptial agreement, are not valid.
Debt Responsibility
Each spouse may have their own debts when they enter a marriage.
In an effort not to burden the other partner with one’s independent liabilities, conditions are typically entered into a prenup that clarifies which spouse is responsible for which debt. This pertains to both pre-marital and marital debt.
Business-Related Assets
A prenup is even more recommended when there are business-related assets, such as an incorporated independent business or family business, real estate properties, an investment portfolio, and savings accounts.
Assets acquired before the marriage relating to business and your professional life may be subject to division during a divorce without a prenuptial agreement in place to indicate to the courts any protections that you want applied.
Ensure that these pre-marital or personal assets remain with the original owner in your prenup.
Getting Ready To Sign A Prenup? Here Are A Few Questions To Answer
A prenup is a lot of work to author, negotiate, sign, and file. Hire a family law legal team to help you draft your prenup.
In this process, here are some questions to consider as you’re putting in writing a prenuptial agreement.
- Have you and your spouse engaged in financial disclosure and are you satisfied with the information provided?
- How will spousal support be determined in the event that your relationship breaks down?
- Could having a child alter the spousal support arrangement you are requesting with your prenup?
- How long should you be married to qualify to pay or receive spousal support?
- How much should spousal support be, expressed in either a percentage or dollar figure amount?
- With regards to property division, will assets be valued at the time of separation or at a later/earlier time?
- How will assets be divided if they are purchased before the marriage compared to during the marriage?
- If you own a business, do you want to be solely liable for its debts rather than your spouse?
- If one of you passes away and you are separated but not divorced, will your estate automatically go to your estranged spouse?
It is best for you and your spouse to retain your own independent lawyer to advise each person of their rights and the consequences of entering a prenup.
It is also strongly recommended to take proper time to negotiate and sign the prenup. Do not confront the other person the night before you are to get married or in a time frame when they don’t have the time to review or consider the prenup being proposed.
A lack of time to consider the agreement could potentially result in the agreement being invalidated by the courts at a later date.
Common Misconceptions About Signing A Prenuptial Agreement
While prenups are better understood today than they ever have been, they are still often misunderstood.
Prenups Are Only If You’re Wealthy
Wealthy individuals often use prenups but they are not the only ones and prenuptial agreements certainly are not exclusively designed for high-income individuals. Prenups are for any individual or couple with individual or shared assets, debts, and business interests.
Prenups Establish A Lack Of Trust
Prenups have nothing to do with a lack of trust with your spouse. They are about clear communication, responsible financial planning, and providing a clear expectation on how you and your spouse would move collectively through a divorce with minimal damage to your relationship.
Prenups Cover Anything And Everything
As mentioned, prenups have limitations. As mentioned, any provisions relating to child support or parenting arrangements are likely to be crossed out. These matters will be determined by the court at the time of divorce based on the child’s best interests.
Why A Prenup During A Divorce Is Recommended
If you previously signed a prenup, this is always a positive thing for a couple about to divorce because it means there will be less work involved, both parties will save on time and cost, and the expectations moving forward are already stated.
If you’re about to get married, a prenuptial agreement is always a positive – divorce or no divorce. Here’s why.
Let’s be clear. A prenup is not a plan to divorce. It can certainly feel this way when the difficult conversation is first brought up between two people looking to get married.
As divorce lawyers in Ontario, we at Alves Law recommend that every married couple sign a prenuptial or marriage agreement. Half of all marriages end in divorce and even if yours does not, a prenup is insurance that you are protected no matter what.
Prenups are not about one person holding on to all assets and the other person receiving no benefits. Prenups should be negotiated between spouses to ensure that both are comfortable with the arrangement they sign. If both spouses do not benefit from a prenup, the agreement should be re-examined.
This even applies if one spouse enters a marriage a millionaire and the other has no assets or money to their name.
If those two people get into a prenuptial agreement that exclusively benefits the millionaire and ensures the other spouse does not get anything upon divorce, the prenup is likely to be cancelled by the courts due to significant unfairness. For this reason, one wants to ensure that each spouse receives something in a prenup so that the agreement is most likely to hold up in court.
The true purpose of a prenup is to save time and costs related to the divorce fight that too often occurs when a relationship breaks down.
Benefits Of A Prenup When You Are Getting A Divorce
Divorcing your spouse is as much an end as it is a beginning. No one wants to prolong divorce proceedings longer than is necessary.
The process of divorce for anyone is hard, however, a prenup makes it easier.
Streamline Court Proceedings
As asset division, property division, and financial responsibilities are more or less already handled, divorce proceedings that would normally move far slower will be much faster.
Save Legal Costs
Spend less time on matters that may cause greater conflict between spouses and save potentially thousands in the divorce process when you have a prenup.
Limit Judicial Intervention
An expertly written prenuptial agreement should be respected and enforced by the courts. This reduces a judge’s authority in matters of finance and property, and awards more control over divorce proceedings to the two parties getting divorced.
Prevent Disputes
A large part of the reason why divorces are so emotionally charged is because of the disputes that follow. A prenup can prevent contentious disputes over property, assets, debt, and spousal support, maintaining amicable terms between parties and reducing the bad blood that can often flow in a particularly problematic divorce.
How To Invalidate Or Challenge A Prenup During A Divorce
A prenup can be challenged in a divorce, typically on behalf of parties who are unhappy with the terms and who do not want to honor the agreement.
The first step is to apply to the court to invalidate a prenuptial agreement due to it not being enforceable. For a prenuptial agreement to be legally valid and enforceable, it must meet a certain criteria.
- A prenup must be signed voluntarily, without coercion or duress.
- Both parties must disclose all assets and debts for the prenup agreement to be fair and reasonable.
- The agreement cannot be overly one-sided and must contain fair terms.
- The prenuptial agreement must be in writing, signed by both parties, and witnessed.
A prenup can include all sorts of provisions, however, a court can disregard these if they are unjust. A prenup must be considered fair for both parties involved in order to be accepted by the Ontario courts. If terms do not seem just, the prenup can be invalidated.
If the court does not see a reason to automatically and equivocally strike down the validity of a prenup, you may want to contact a divorce lawyer with experience in navigating prenuptial agreements during divorce to pursue a strategy such as the following.
Coercion
An argument can be made that either party was forced or pressured under duress into signing the agreement. Prenups that are signed on the eve of a marriage present a very big problem for this issue, so we strongly recommend retaining a lawyer to negotiate and draft a prenup at least 6 months before the marriage is set to take place.
Misrepresentation
If a party failed to disclose certain aspects of their financial situation, this could be interpreted as fraudulent and invalidate a prenup.
Unconscionable
If the terms can be argued to be excessively unfair or if they heavily favor one side over the other, there are most definitely grounds on which a prenup can be thrown out.
Lack Of Legal Advice
You may argue you or the other party did not receive adequate independent legal counsel prior to signing the prenup and were not aware of the extent of the consequences of signing.
Getting Married Or Divorced? Find The Right Lawyer To Help With A Prenup
Our family law legal team can help you draft and sign a prenup, ensuring that both parties fully understand the agreement and its implications.
It is key to ensure your prenup document is fair and reasonable so that it is more likely to be upheld in court.
If you are on the other side of your marriage and about to divorce, and if you’re curious about if your prenup is enforceable and how it may be challenged in court, this is another reason to seek out the services of a highly skilled expert in prenuptial agreements, divorce law, and family law at Alves Law.
A prenup may have been valid when it was signed but may not be at the time of divorce. Life evolves, circumstances change. If the relevance or fairness of a prenup is no longer what it was before marriage, don’t hesitate to connect with Alves Law for guidance on how to ensure your rights and interests are protected in the face of what’s stipulated in your prenuptial agreement.
Please contact us for a free consultation and we will connect you with an Ontario divorce lawyer without delay.
Frequently Asked Questions
How much does a prenuptial agreement cost?
The cost of a divorce in Ontario if it makes it to court and involves a trial can be anywhere from $50,000 to $250,000 or potentially more. By comparison, if you have high-value assets and are negotiating a prenuptial agreement with your spouse, you might see total costs come down to $2,500 to $10,000 depending on the complexity of the case. This saves you tens of thousands of dollars in potential future legal fees if you are ever facing a divorce. It makes sense to get your prenup done right and the cost, many will tell you, is well worth it.
Should I consult a lawyer before signing a prenuptial agreement?
Consulting a lawyer is an essential move to make before signing a prenup. It’s expected that the average person is not going to know the ins and outs of how to author and sign a prenup. One or both parties may unknowingly invalidate their own agreement. A lawyer can protect your rights, identify unfair clauses, provide guidance on financial disclosure, and help outline what is or isn’t allowed in a prenuptial agreement to ensure the courts enforce it. Without a lawyer, you put yourself at a disadvantage and it becomes more likely that your prenup won’t hold up in court.
What happens if I break the terms of a prenuptial agreement?
If you break the terms of a prenuptial agreement, you may be held legally accountable which could result in fines and jail time. This includes not adhering to spousal support or property division terms. Prenups are legally enforceable Canada-wide. If you do not believe you should be held accountable for what’s indicated in a prenup, contact a lawyer and seek out the best strategy to challenge the document. This is the best option if you disagree with a prenup. If you do not issue a legal challenge to your prenup and refuse to honor the deal, this is where you may encounter severe consequences.