When you marry, it is important to understand how marriage impacts your property rights. A couple might choose to enter a premarital agreement that calls for different rights than the law would impose.
Prenuptial agreements for Toronto high-net-worth divorces can save you time, money, and stress if your marriage fails. Speak with a lawyer at The Riley Divorce & Family Law Firm about creating or enforcing a premarital contract.
The Ontario Family Law Act s.52 governs prenuptial agreements (prenups). It allows you to decide before marriage how to divide your property if you divorce and designate specific property as separate and not subject to division. When creating a prenuptial agreement for a high-asset divorce, it is a good idea to review it closely with a Toronto lawyer to ensure you understand how it impacts your rights.
A prenup cannot alter either spouse’s interest in the matrimonial homes. Under the law, you and your spouse have equal rights to possession of any residence that served as a matrimonial home.
A prenuptial agreement may designate one spouse to make decisions regarding your children’s education and moral upbringing. However, you cannot assign decision-making authority or parenting time through a prenup. Those decisions must be made at the time of separation and be based solely on the children’s best interests at that time.
Assets and debts that you bring into a marriage, with the exception of residences used as a matrimonial home, are considered separate property. However, separate property can become marital property if it is used for the benefit of the couple or the family during the marriage.
For example, if you enter the marriage with $100,000 in a bank account, that money would normally be your separate property. If you use those funds to pay your household debts or as collateral for a loan that benefits you as a couple, the money becomes marital property. A prenuptial agreement can designate certain assets as separate and not subject to division in a divorce, regardless of how you used them during the marriage.
If you have interests in heritage property, a family business, or valuable heirlooms, a prenuptial agreement can ensure it is preserved within your family. Before marrying, you should protect your interests in property belonging to your family of origin by specifying it as separate in your prenup.
A couple can address spousal support in their prenup, and they can waive it entirely. A Toronto lawyer could explain the factors courts consider when deciding spousal support for high-net-worth couples going through divorce and help you negotiate a reasonable provision to include in your prenuptial agreement.
Courts can modify or set aside prenups under certain conditions. A court will not enforce a prenup unless both sides made full disclosure of their assets and debts prior to signing. Your agreement must be in writing, and you and your fiancé must sign in front of a witness.
Challenges to prenups are common in high-asset divorces, and they may be successful if a Toronto lawyer can prove a spouse was pressured to sign or did not understand the implications of the agreement. A court can also set aside an agreement if enforcing it would be shockingly unfair to one party. Challenges are less likely to be successful when both parties had adequate time to consider the agreement and the opportunity to work with independent lawyers before signing.
Prenups formalize your financial relationship with your intended spouse. Should the marriage fail, a well-drafted prenup can greatly ease the divorce process.
The lawyers at The Riley Divorce & Family Law Firm have expertise in negotiating, drafting, challenging, and defending prenuptial agreements for Toronto high-net-worth divorces. We are always available to speak with you, so contact us now to learn more.
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