How Common Are Prenuptial Agreements in Canada?
When people get married, they look forward to a life of bliss and happiness with their partner. Sadly, it doesn’t always end as expected, with almost half of all marriages ending in divorce. While marriages should be based on love and mutual respect, some are more of a financial partnership.
Prenuptial agreements come in handy to help individuals protect themselves from unexpected eventualities. Toronto family law lawyers say that a significant benefit of a prenuptial agreement is that it allows couples to openly discuss their expectations if their union doesn’t go as planned.
Prenuptial agreements are not a very common social trend but are gaining popularity. Skilled Ontario divorce lawyers explain several reasons why you should consider having a prenuptial in Canada:
Discuss Crucial Issues Before Marriage
Talking about how assets will be divided if the marriage doesn’t work can be tricky for couples about to get married. After all, the intention is to live “happily ever after” based on a false optimism that everything will work out to the end. People also believe that discussing a prenup is a sign of uncertainty about the marriage.
The truth is that working on a prenup during the best years of a relationship is likely to produce the best outcome. You’re more likely to be honest with each other, highlighting your best commonalities and significant disagreements. The agreement creates a chance to discuss finances, which is problematic for most couples.
A Prenuptial Agreement Can Protect a Business
Creating a prenup and including a clause about a business you own solely or in partnership with your spouse can help protect your ownership. The clause can be helpful when a family business is involved. The appreciation of business value can be deemed a marital asset if the appreciation happens during the marriage.
That can be the case even if your spouse doesn’t directly contribute to the business or you own it separately. A prenup can prevent a non-owner from accessing the business resources, acquiring a portion of its entity, or getting support based on the income you get from the business. Consult skilled Ontario marital agreement lawyers for legal insights on creating the clause.
Ensure Your Marriage is About the Relationship
The last thing you would want to cross your mind is that your partner is not with you for who you are, but what you own. Unfortunately, this has become a common occurrence among many couples. Some people get into marriages with wealthy people to benefit from their wealth if they divorce.
A prenuptial agreement can help you put the cards on the table. You’ll be in a better position to reaffirm that the marriage is about the two of you, not the wealth or assets involved. Experienced marital agreement lawyers in Ontario can guide you in achieving this goal.
Protect Unequal Assets in the Marriage
In most divorce cases, the spouse with more assets has a higher risk of losing more assets once the issue is settled. Whether the assets were acquired through inheritance or pension, they could make you lose more if you’re the wealthier spouse. A prenuptial agreement acts as an insurance policy to cover valuable assets to prevent you from losing them.
Prepare for Taxes
Prenuptial, cohabitation, and postnuptial agreements are practical tax planning tools. When people break up without the agreements, the court requires the division of assets without considering the tax implications. A prenuptial agreement allows you to specify how you wish to divide your property if the marriage breaks down.
With the help of Ontario marital agreement lawyers, you can utilize optimal asset division techniques. Through their understanding of equitable division laws, they can help you minimize the tax implications as you divide your marital property if your marriage dissolves.
Address Liabilities and Avoid Surprise Debt
Generally, a prenup determines what will happen to assets belonging to either spouse, whether they acquired it before or after the marriage. They also address debt obligations brought into the marriage or acquired during the union.
If you or your spouse are entering the marriage with credit card or student loan debt, it helps to discuss what will become of it if the marriage ends in divorce. That is a benefit that applies to couples of all income levels.
Protect Yourself If You’re Blindsided by Divorce
Divorce often happens after months of fighting or due to a significant life change that adversely affects the marriage. Sometimes, it can happen as a result of one spouse being blindsided. That happens when divorce springs up without giving you time to prepare. A prenuptial agreement is your best bet at ensuring a fair separation plan in such an event.
Reduce Stress and Save Money
A prenuptial agreement benefits you and your spouse by providing certainty about ending the marriage if it fails. It helps you avoid extreme emotional strain associated with separation. With a prenuptial in place, you can also avoid exorbitant legal fees associated with the divorce process, as it significantly reduces the time it takes to settle financial matters around the divorce.
A Skilled Family Law Lawyer Providing Legal Guidance on Marital Agreements
Creating a prenuptial agreement can be a thorny issue, especially if your marriage is flowing as it should. However, the contract can protect you, your family, your future, and your assets if the marriage fails, ending in a divorce. Being prepared is never wrong, and knowing the steps to take if disaster strikes can significantly reduce stress.
Experienced Ontario family law lawyers at K&Y Law can provide legal insights into prenuptial and postnuptial agreements. While we hope your marriage will last, it’s to your advantage to lay out the conditions and terms of what will happen if either of you seeks an end to the relationship. Call us at 647-956-5013 to schedule an initial consultation.