Marriage Contracts (Prenuptial Agreements) and High Net Worth Marriages: Protecting Your Assets in Ontario
Are you entering into a marriage with significant assets or expecting to accumulate wealth? Consider protecting your hard-earned wealth from potential divorce consequences. A “marriage contract” or “prenuptial agreement” can provide certainty and preserve assets.
You don’t have to be getting married either. Where two people are going to just live together, then they can negotiate and sign a “Cohabitation Agreement”. The same principles that we outline in this post apply equally to Cohabitation Agreements.
What is a Prenuptial Agreement?
A prenuptial agreement is a contract outlining financial matters in the event of divorce. It can address:
- Property ownership and division (subject to Ontario’s matrimonial home limitations)
- Financial relationships (separate or joint finances)
- Spousal support
- Limited matters related to child upbringing (excluding child support)
When Do You Need a Prenuptial Agreement?
If you have:
- Investments and personal assets;
- Business interests;
- Significant wealth disparity with your future spouse.
Ontario law equalizes net worth increases from the marriage date to the separation date. A prenuptial agreement can modify this formula, excluding specific assets and liabilities.
If you want to modify spousal support obligations, then within certain limits and under some circumstances, you may be able to deviate somewhat from the strictures of the Divorce Act.
Ensuring Enforceability
To ensure validity and enforceability of the marriage contract:
- Avoid coercion, fraud, duress, or undue influence;
- Provide comprehensive financial disclosure;
- Ensure fairness and avoid lopsided agreements;
- Engage independent legal representation for each spouse.
The Importance of Independent Legal Advice
Don’t risk invalidation. Each spouse should receive separate, expert guidance from a family law lawyer. This ensures completeness, provides an electronic record, and safeguards future enforceability. Trotting down the hall to secure a so called “Certificate of Independent Legal Advice” is ill advised (to say the least).
Expert Guidance for High-Net-Worth Individuals
At the Gene C. Colman Family Law Centre, we provide tailored advice for complex family law matters. Our experienced lawyers will help you navigate prenuptial agreements, protecting your assets and taking every possible step in order to ensure enforceability.
Having lawyers for each side organize and present the financial disclosure is very important. This ensures completeness and provides an electronic record of just what was produced.
Contact Us
Schedule a consultation: 888-389-3099 or message us through our website.
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