Marriage Agreements, also called “Prenuptial Agreements” or “Prenups” are generally entered into by couples looking to establish their individual financial and property rights before marriage. These agreements may also list the manner in which assets, debts and liabilities will be handled during the marriage.
The family law lawyers at Solimano Law can assist in preparing a comprehensive marriage agreement, which takes into account the financial assets and debts of each party.
Understanding Marriage Agreements
Marriage Agreements in British Columbia allow a married couple to set out how support, assets, and debts will be dealt with in the event of a separation. These agreements are generally entered into prior to marrying or cohabitating. They create visibility for how certain issues will be resolved, in the case that the relationship ends, with the goal of minimizing disputes over those issue.
The main purpose of a Marriage Agreement is to establish clear guidelines on how assets and debts will be divided.
Marriage Agreements are required to be fair to both parties. They cannot be used as a way for one person to exclude the other entirely from sharing into their wealth.
Making a Marriage Agreement ahead of time may save time and costs associated with a contentious divorce full of disputes and disagreements. Although it is possible to enter into a Separation Agreement if your marriage breaks down, arriving at mutually acceptable terms when tempers and emotions are running high is usually quite difficult.
Purpose of Marriage Agreements
Marriage Agreements are mostly financial in nature and may include child custody. This makes it important to have full financial disclosure before entering into an agreement. It is recommended that you get independent legal advice prior to signing a Marriage Agreement to ensure you understand the full consequences of all clauses.
There are many reasons for entering into a Marriage Agreement. The following are some examples:
1. Spousal Support
A Marriage Agreement may provide answers to questions like:
- Which spouse is required to pay spousal support; and
- How long does the couple need to be married for support to be provided. It may also list the amount of spousal support that is required to be paid in case the relationship breaks down.
2. Assets Division
Marriage Agreement may provide answers to questions like:
- When will the assets be valued – at the time of separation or some other date; and
- How will the assets acquired be divided?
3. Debt Allocation
Many couples forget to make provisions for debt acquired during the marriage. Debt allocation may be particularly important when one spouse owns a business and does not want the other to be held liable for the debts accrued. It can also be extremely challenging for one spouse if the other decides to stop contributing towards mortgage payments of their marital home.
4. Estate Division
In some cases – a couple will want their estate to be transferred over to their children rather than their spouse, even when they do not divorce or separate. Without any specific agreement or will in place, your estate will (in most cases) automatically go to your spouse. A Marriage Agreement can include provisions with respect to this.
5. Child Support
Marriage Agreements are useful in clarifying whether the Child Support Guidelines will be followed or whether one spouse will solely bear extraordinary expenses.
Marriage Agreements are Required to be Fair
Issues of fairness are a major concern when drafting Marriage Agreements.
Marriage Agreements are required to meet the test for fairness to be enforceable in British Columbia. Section 93 of the British Columbia Family Law Act enshrines the “fairness test”.
A Court may set aside a Marriage Agreement if any unfairness is discovered in the Agreement following separation or divorce. This makes it important for all parties to exercise caution and special care when making a Marriage Agreement.
Unfairness can take several forms. Some common examples are:
- exploitation of psychological or emotional vulnerability;
- influence through oppression or dominance;
- history of physical, financial, and emotional abuse;
- singular control over finances;
- taking advantage of another’s ignorance of legal matters;
- only one spouse received legal advice;
- preventing access to financial information;
- significant changes in financial circumstances since signing the Marriage Agreement;
- spouse becoming disabled or sick after signing the prenup; and
- spouse becoming solely responsible for all children.
To be remain enforceable, a Marriage Agreement cannot be one sided.
If a Court finds unfairness, a Marriage Agreement may be set aside or cancelled. If set aside, (in most cases) then everything (debts and assets) may be divided equally between the two spouses. This would defeat entirely the reason for having a Marriage Agreement in the first place.
Key Components of Prenuptial Agreements
Generally speaking, there are five things every Marriage Agreement must have to make it enforceable. They are:
1. Full Financial Disclosure
A Court may set aside a Marriage Agreement if full financial disclosure is not made. You must accurately disclose the amount of money you have and earn. For example, a Court may set aside a Marriage Agreement with vague wording, such as ‘both spouses will keep whatever money they have’.
2. Lack of Pressure
Your spouse cannot be under any duress, pressure, or coercion when they sign the Marriage Agreement.
3. Independent Legal Advice/ Independent Lawyer Consultations
It is important for both parties signing the Marriage Agreement to fully understand their rights, obligations, and the consequences of entering the Agreement. It is important that each party to the Marriage Agreement have separate lawyers advising them. Without independent legal advice, a Marriage Agreement may be easily set aside by a Court.
4. Proper Negotiations
To be enforceable, you must have allowed your spouse enough time to negotiate and consider the terms of the agreement. A Court has the power to void the agreement if they find that one spouse has forced the other to sign (i.e., on the day of the wedding without giving their partner enough time to properly review).
5. Legal Compliance
All Marriage Agreements need to comply with the British Columbia Family Law Act and Divorce Act. It is important to not simply download a Marriage Agreement template from the internet. A Marriage Agreement should represent your unique situation and circumstances.
Discuss Your Prenup with Knowledgeable Lawyers Today
The family law lawyers at Solimano Law have experience in drafting many types of agreements, including Marriage Agreements. Contact us today to learn more about your rights and options.
Disclaimer – The information contained herein is of a general nature. It is not intended to be legal advice and it is not intended to address the exact circumstances of any particular individual or entity. No one should rely on or act upon such information without receiving appropriate professional advice and without a thorough examination of their particular situation. Please contact our office if you have any questions with respect to the content of this entry, this website, or our Terms and Conditions .