What Is A Prenuptial Agreement In Ontario?
A prenuptial agreement, commonly called a “prenup,” is a type of domestic contract created by two people who intend to marry. In Ontario, the legislation refers to this agreement as a marriage contract.
Under Ontario’s Family Law Act, people who are married or intend to marry can agree in advance on certain rights and obligations that may apply during their marriage, if they separate or divorce, or upon death.
A marriage contract can provide greater financial clarity by addressing matters such as property ownership, division of property, support obligations, and other financial arrangements between spouses.
Couples already living together may instead have a cohabitation agreement. If the parties to a cohabitation agreement later marry each other, Ontario’s Family Law Act generally provides that the agreement becomes a marriage contract unless the agreement says otherwise.
At Gelman & Associates, our Toronto prenuptial agreement lawyers assist clients with drafting, negotiating, reviewing, and challenging marriage contracts. Contact us at 1-844-736-0200 or book a consultation to discuss your circumstances.
What Can Be Included In A Prenuptial Agreement?
A properly prepared marriage contract can address many of the financial issues that might otherwise become disputed following a separation or divorce.
Under the Family Law Act, spouses may address matters including:
Property Ownership And Division
Couples may agree on how certain property will be treated if the marriage ends. This can be particularly important where one spouse enters the marriage with substantial savings, investments, real estate, business interests, or other assets.
A marriage contract can also be relevant for people concerned about how Ontario’s property division rules could apply if they later separate.
Spousal Support
A marriage contract may contain provisions dealing with spousal support, including whether support will be payable and how the parties intend to address support if the relationship ends.
Support provisions should be drafted carefully. The circumstances existing when an agreement is signed, and the circumstances at separation, can both become important if the provision is later challenged.
Business Interests
Business owners and entrepreneurs may use a marriage contract to clarify how ownership interests, increases in value, or other business-related property will be treated if the marriage ends.
Inheritances And Family Wealth
Marriage contracts can help spouses clarify how inherited property, family wealth, gifts, and other assets will be treated.
This can be particularly relevant in second marriages, blended families, and situations involving significant assets. Our lawyers also advise clients on family law issues involving inheritances.
What Cannot Be Determined By A Prenuptial Agreement?
There are limits on what a marriage contract can accomplish in Ontario.
Parenting Time And Decision-Making Responsibility
A marriage contract cannot fully determine future parenting arrangements. Decisions about parenting time and decision-making responsibility must ultimately be based on the best interests of the child.
Parents cannot use a prenup to prevent a court from making a different parenting order where the child’s circumstances require it.
Child Support
Parties should not rely on a marriage contract as a way to permanently waive or predetermine a child’s right to appropriate support.
Ontario’s Family Law Act permits a court to disregard a domestic-contract provision concerning child support where appropriate under the applicable child support rules. Our Toronto child support lawyers can explain how these obligations are determined.
Statutory Rights To The Matrimonial Home
Ontario law specifically provides that a marriage contract cannot limit the possessory rights spouses receive under the matrimonial-home provisions of the Family Law Act.
Couples can still address many financial issues concerning real estate, but they should obtain legal advice about the special treatment of the matrimonial home.
Are Prenuptial Agreements Legally Enforceable In Ontario?
Yes, marriage contracts can be enforceable in Ontario, but simply calling a document a prenup does not guarantee that every term will be upheld.
Section 55 of Ontario’s Family Law Act provides that a domestic contract is unenforceable unless it is:
- In writing
- Signed by the parties
- Witnessed
Those formalities are only the starting point.
Under section 56 of the Act, a court may set aside a domestic contract or part of one in circumstances that include significant non-disclosure of assets, debts, or liabilities, where a party did not understand the nature or consequences of the agreement, or otherwise under the general law of contract.
Financial Disclosure Matters in Prenuptial Agreements
Each spouse should provide meaningful and accurate disclosure of their financial circumstances before entering into an agreement.
That can include information about income, investments, real estate, pensions, corporate interests, debts, and other significant assets or liabilities.
An agreement negotiated without adequate financial disclosure may be more vulnerable to a future challenge.
Independent Legal Advice Can Strengthen The Process
Each person should consider receiving advice from their own lawyer before signing.
Independent legal advice gives each party an opportunity to understand the agreement, how it changes their legal position, and the consequences of signing it.
Using separate lawyers does not make an agreement impossible to challenge, but it can help demonstrate that both parties had an informed opportunity to consider their rights and obligations.
Avoid Pressure And Last-Minute Signing
A marriage contract should be the result of a voluntary, collaborative process.
Presenting a significant agreement immediately before the wedding, without enough time for disclosure, negotiation, or legal advice, can create unnecessary risk. Couples should begin discussing the agreement early enough to allow both parties to make informed decisions without undue pressure.
How Much Does A Prenuptial Agreement Cost In Ontario?
There is no single fixed price for a prenuptial agreement in Ontario.
The cost depends on factors such as:
- The complexity of each person’s financial circumstances
- The number and type of assets involved
- Whether either person owns a business
- Whether property is located outside Ontario
- The amount of financial disclosure required
- How much negotiation takes place
- Whether extensive revisions are necessary
- The cost of obtaining independent legal advice
A relatively straightforward agreement where the parties already agree on the main terms may require less legal work than one involving corporations, trusts, multiple properties, substantial investments, support negotiations, or complicated estate-planning considerations.
Rather than relying on a generic online estimate, clients can contact Gelman & Associates at 1-844-736-0200 for free to discuss the legal work likely to be required in their circumstances.
When Should You Get A Prenuptial Agreement?
There is no universal deadline that applies to every Ontario marriage contract, but it is generally better to begin the process well before the wedding.
Preparing an agreement can require time for:
- Initial legal consultations
- Financial disclosure
- Drafting
- Review by the other spouse and their lawyer
- Negotiation
- Revisions
- Final signing and witnessing
Starting early also reduces the risk of one person feeling pressured to sign immediately before a wedding.
If your wedding date is approaching, speak with a family lawyer as early as possible rather than assuming that it is either too early or too late to discuss an agreement.
Who Should Consider A Prenuptial Agreement?
Prenuptial agreements are not limited to extremely wealthy couples.
A marriage contract may be worth considering where:
- One or both partners own a home
- One person owns a business
- There is a significant difference in assets or income
- One spouse expects a substantial inheritance
- Family gifts or intergenerational wealth are involved
- One or both spouses have children from an earlier relationship
- One person has significant debt
- One or both spouses have been married before
- The parties want greater certainty about property or support if they separate
Couples entering second marriages often have particularly complex financial and family considerations. Read our focused guide to prenuptial agreements for second marriages and blended families for issues involving children from prior relationships, established assets, and estate planning.
Prenup Vs. Postnup In Ontario
A prenuptial agreement is generally negotiated before the parties marry.
People who are already married can also enter into a marriage contract. This is commonly referred to as a postnuptial agreement or “postnup.”
The same need for careful financial disclosure, informed consent, appropriate drafting, and independent legal advice can arise whether the agreement is signed before or after the wedding.
Couples who are not married and do not presently intend to marry should instead review whether a cohabitation agreement is appropriate.
Can A Prenuptial Agreement Be Set Aside?
Yes. A spouse can ask an Ontario court to set aside all or part of a domestic contract in appropriate circumstances.
Section 56 of the Family Law Act specifically identifies circumstances involving:
- A failure to disclose significant assets, debts, or other liabilities
- A party not understanding the nature or consequences of the agreement
- Other grounds recognized by contract law
Whether a marriage contract will actually be set aside depends on the specific agreement, the circumstances in which it was negotiated, and the legal issues raised.
For this reason, anyone seeking to enforce or challenge an existing agreement should obtain legal advice rather than assuming that an agreement is automatically valid or automatically invalid.
Frequently Asked Questions About Prenuptial Agreements In Ontario
Do Prenups Work In Ontario?
A properly prepared marriage contract can be legally enforceable in Ontario. Whether a particular agreement or provision will ultimately be enforced depends on the statutory requirements, how the agreement was negotiated, the parties’ disclosure and understanding, and the circumstances of any later challenge.
Do Both People Need Their Own Lawyer For A Prenup?
The Family Law Act does not list separate lawyers as one of the basic formal requirements for creating a marriage contract. However, independent legal advice is strongly worth considering because each person should understand how the agreement affects their own legal rights.
One lawyer cannot provide independent legal advice to both parties about competing interests.
How Long Before A Wedding Should You Sign A Prenup?
Ontario legislation does not establish one universal number of days before a wedding by which every marriage contract must be signed.
However, waiting until immediately before the wedding can create practical and legal difficulties. Starting well in advance provides time for disclosure, independent legal advice, negotiation, and informed decision-making.
Can You Get A Prenup After You Are Married?
Yes. Married spouses can enter into a marriage contract after the wedding. This is commonly referred to as a postnuptial agreement.
Can A Prenup Protect A House I Owned Before Marriage?
A marriage contract can address financial rights concerning property brought into the marriage, but Ontario has special rules concerning a matrimonial home.
If a property may become the spouses’ matrimonial home, obtain advice about how the matrimonial home rules interact with the proposed agreement.
Can A Prenup Protect An Inheritance?
A marriage contract can be used as part of a broader strategy for dealing with inherited or family wealth. However, how an inheritance is treated can depend on what happens to the property after it is received and whether it is connected to a matrimonial home.
Our Toronto inheritance lawyers can advise on family-law considerations involving inherited property.
Speak With Our Toronto Prenuptial Agreement Lawyers
A prenuptial agreement can have significant financial consequences for both spouses. Careful drafting, complete financial disclosure, adequate time for review, and informed legal advice can all play an important role in creating an agreement that reflects what the parties actually intend.
At Gelman & Associates, our Toronto prenuptial agreement lawyers assist with drafting new marriage contracts, reviewing proposed agreements, negotiating revisions, and advising clients about existing agreements.
To discuss a prenuptial or marriage agreement in Ontario, call 1-844-736-0200 or contact Gelman & Associates online to arrange a consultation.
