As June approaches, brides and grooms across the country prepare to tie
the knot. And, increasingly, they have more on their minds than simply the mutual love and
devotion that they feel for each other. Today, they come before the minister armed with
matching wedding rings and a signed marriage contract or prenuptial agreement in hand.
These pacts have been around for many years, but only in the past fifteen years has
their popularity soared. No longer are they just the domain of older couples with children
and assets from a former marriage, but are commonplace with couples of all ages and
economic stations in life.
The reason is simple: current legislation in most provinces allow both the husband and
wife equal claims on the value of all assets accumulated during the marriage. Any
appreciation of assets held before the couple walked down the aisle is also split down the
middle. Consequently, upon marriage break-up, the value of everything brought into the
marriage is subtracted from total family assets in calculating "who gets what"
upon separation and divorce.
This may seem equitable on the surface but there is one glaring exception -the family
home. For example, lets say you go into a marriage owning a house in which you have
equity of $100,000. Upon splitting up, the laws of most provinces automatically allow your
former spouse a claim to fifty per cent of the property, provided it was used as the
couples principal residence during the time that they were together.
However, if you go into the marriage with the same $100,000 sitting in the bank, and
you buy the house the day after the wedding, you get credit for having brought $100,000
into the marriage and it need no longer be split 50/50 upon marriage breakdown.
Other reasons people sign on the dotted line of a prenuptial agreement include (a)
business arrangements such as limited partnerships that may require a marriage contract to
protect the firm; (b) older couples on their second marriage who have sizable
assets that they want to protect for their children or other relatives; (c) well meaning
parents or grandparents who insist that the couple have such an agreement so that
inheritances and gifts can be transferred between generations without interference from a
former spouse, and (d) marriages that take place between spouses who are several years
apart in age.
These agreements are private contracts between the parties and do not have to be filed
with a court. However, in order to be successfully implement highlights information
containeded in the event of death or divorce, certain basics must be attended to prior to
signing. These include:(a) both parties must have obtained independent legal counsel; (b)
the document must contain full disclosure of each partys assets and liabilities at
the time of signing; and (c) none of the parties must have signed the agreement under
duress (such as any last minute ultimatums just prior to the wedding ceremony).
Negotiating a prenuptial agreement can save couples heartache down the road by exposing
problems in their relationship before they are formally married. Perhaps its greatest
advantage is it provides a reality check...can the couple sit down and talk about one of
the most basic things in life - money?