Should You Obtain a Prenuptial Agreement?

While couples who marry generally do so for love and plan to have their relationship last for a lifetime, it is important to always be ready for unexpected contingencies. The likelihood of divorce in Canada is over 40 percent and the divorce rate is even higher for second and third marriages. Pressures in life can draw people together or away from each other and often couples simply grow apart. Regardless of what triggers a divorce, couples still have obligations to each other.

Many couples are beginning to think of getting married in the same way they think of starting a new job - both are important relationships with legal rights and obligations. With a prenuptial agreement (also known as a marriage contract), couples can negotiate the terms and conditions and come up with a written document which outlines their agreement. A cohabitation agreement can also deal with the same issues before a couple marries and can become a marriage contract if and when the couple eventually do marry. Prenuptial agreements, cohabitation agreements and separation agreements are all domestic contracts.

Benefits of Prenuptial Agreements

Prenuptial agreements are often compared to insurance policies. They exist to protect each party financially in the event of a marriage breakdown, much like life insurance protects a young family in the event of an early death. Engaged couples don’t usually plan for marital breakdown, but having a prenuptial agreement protects them in the event that their marriage does end in divorce.

Prenuptial agreements are particularly beneficial where one spouse has significant assets or has a business. Bringing assets to the marriage is more common as couples marry later in life and have had time to accumulate wealth. A lawyer in Newfoundland and Labrador can discuss the benefits of a prenuptial agreement specific to your situation and advise you on what should be including in the prenuptial agreement itself.

Prenuptial Agreement When Children from a Previous Relationship are involved

Many couples tend to discuss having a prenuptial agreement when they have children from a previous relationship. They may be obliged to provide support for their children by law or they may simply want to ensure that, after their death, their children will receive a significant portion of their estate. Anyone who plans on passing on assets, such as a share in the family business, to children instead of a spouse, may want to have a prenuptial agreement in place to ensure the assets are kept separated and can therefore become part of their estate.

When a Domestic Contract is Not Suitable

There are situations where a signed marriage contract can be set aside by a Court, especially if it was done without consulting a lawyer. If there is coercion, fraud, misrepresentation, or failure to provide full disclosure of assets and income, then the contract could be set aside due to unfairness. Such agreements may also be called into question if one of the parties claims that they signed under duress.

Contents of Prenuptial Agreements

In Newfoundland and Labrador, prenuptial agreements are governed by the domestic contract provisions in Part IV the Family Law Act, RSNL 1990, c F-2. Section 62 of the Family Law Act, defines the contents of marriage contracts. These agreements can contain clauses addressing the following areas:

  • Ownership in or division of property;
  • Support obligations;
  • The right to direct the education and moral training of their children; and/or,
  • Other matters in the settlement of their affairs.

While the right to direct the education and moral training of children is permissible in marriage contracts, custody or access to children and child support are not permitted to be included in a prenuptial agreement. Upon the breakdown of a marriage or cohabitation, issues relating to custody, access and child support are usually dealt with through negotiation or litigation.

All marriage contracts must be in writing, signed by the parties and by a witness.

Prenuptial Agreements in Practice

In Furlong v Furlong, the Supreme Court of Newfoundland and Labrador considered the validity of a disputed marriage contract. Robert Furlong (“Robert”) and Vicki Furlong (“Vicki”) entered into a prenuptial agreement that granted Vicki complete ownership and responsibility for the matrimonial home.

Robert wanted the marriage contract set aside as the purchase of the home was only made possible by financial contribution of his parents. Despite their contribution, Robert’s name could not be on the deed. According to Robert’s testimony, Vicki assured Robert and his parents that she would never challenge his ownership rights to the property. Due to credit issues, in order to close the purchase of the home, Robert had to sign a marriage contract relinquishing his rights to the property.

The Court upheld the contract finding that Robert had been careless in signing it and had done so against the legal advice of his lawyer. Vicki’s sole ownership of the matrimonial home was confirmed.

Courts are not eager to overturn the contractual agreements of spouses when they comply with the Family Law Act. Because a prenuptial agreement is legally binding contract, you should seek independent legal advice from a lawyer in Newfoundland and ensure your spouse does the same.

Contact the Family Lawyers in St. John’s at Gittens & Associates

If you are considering a prenuptial or cohabitation agreement or have questions about your legal rights and obligations if you get married, you should speak with our trusted family lawyers in St. John’s, Newfoundland and Labrador. We routinely draft and negotiate fair prenuptial agreements for our clients, including addressing issues of property division and spousal support. In Newfoundland and Labrador, Gittens & Associates can help you when you schedule a consultation. Contact us at 1-888-592-7171.

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