In high-asset divorces, business interests often become a source of tension. Beyond their value, there may be ongoing obligations and...
Many couples are cynical about the idea of preparing for divorce before getting married. However, it is essential to remember that marriage is both a legal and financial union. If one or both of you have significant wealth, it is crucial to consider how you will handle those aspects of your relationship if the marriage does not last.
Rather than thinking of it as preparing for divorce, it can be helpful to reframe it as a way of preventing future financial disagreements. At The Riley Divorce & Family Law Firm, our skilled lawyers could help you and your partner work through these issues before you marry.
Canadian law stipulates that spouses should share equally in the benefits of marriage. In the event of divorce, the spouse whose net worth increased the most during the marriage splits the difference with the other spouse.
Although the formula appears simple, it can be challenging to apply in practice. When substantial assets are involved, both you and your fiancé need to understand how they will be divided if you divorce. You should also consider the potential tax implications.
The equalization standard may not be ideal in your circumstances. If you and your partner agree—and follow certain legal formalities—you can enter a contract to divide your property in a way that feels fair to both of you. Both parties should seek advice from independent legal counsel to ensure a court will enforce your agreement if you later decide to divorce.
You may have earned your assets, but if your family has wealth, you also need to consider their interests—ideally, before your wedding. Without careful divorce planning, your spouse could gain interests in legacy homes, businesses, and personal property that have sentimental value for your family, such as antiques and jewelry.
Property owned by one spouse before marriage is typically excluded from the net family property calculation during the divorce process, but the exclusions are not absolute. If you own a property but share it with your spouse—or if you both live in a family-owned property—you could unintentionally give your spouse a legal interest in it.
Similarly, if a family business increases in value during your marriage, your spouse could have a right to a share of the appreciation. When there are insufficient liquid assets to pay your spouse their share, the continued viability of the business could be at risk.
A lawyer could help you draft a marriage contract that reflects your wishes on equalization and separate property in the event of divorce. The process requires you and your fiancé or spouse to fully disclose your holdings so you both have a clear picture of your financial resources. This provides you with an opportunity to have candid discussions about financial goals and expectations.
It is possible to enter a marriage contract before or after you legally wed. Whenever you begin, each of you must seek help from a skilled matrimonial lawyer. You may also wish to consult financial and tax professionals as you craft your agreement.
No couple wants their relationship to end in divorce; however, if you or your partner has significant wealth, it is crucial to get clarity on financial matters before marriage and plan accordingly. Reach out to our lawyers at The Riley Divorce & Family Law Firm today for guidance through the marriage contract process.
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