All about the prenuptial agreement in Canada

The prenuptial agreement defines the matrimonial regime and the guidelines to be followed in the event of death or divorce. Less known, the prenuptial agreement plays an equally important role for married couples. What is this specific contract in Canada? What is its interest and how to establish it?

What is a prenuptial agreement?

The prenuptial agreement is a contract of English origin that has spread throughout the world, but what is it?

The definition of a prenuptial agreement

The prenuptial agreement is also known as apre-nuptial agreement. As the name implies, it is a legal document signed before marriage. It is similar to a domestic contract that sets out the terms of the couple’s life together. It also sets out the rules for the property relationship during the marriage and possibly at its dissolution.

The prenuptial agreement is very important in the celebration of the second marriage. It defines the provisions related to the previous spouse and to the child born from the first marriage.

The contract is also a precious help in the management of the family patrimony, fruit of thefamily business. It has the advantage of protecting the patrimony and assets of one of the family members.

The differences between prenuptial agreements, postnuptial agreements and marriage contracts

1. The prenuptial agreement organizes the ownership of property acquired and to be acquired by the couple. Its purpose is to serve and protect the financial interests of each spouse in the event of separation.
2. A post-nuptial agreement is signed and accepted after the marriage is celebrated. It sets out the terms and conditions for the appropriation of personal property and the distribution of joint property.

Apart from the date of signature, theobligation to declare property marks the difference between these two contracts. The bride and groom are not subject to any legal obligation to declare their assets in a prenuptial agreement. Conversely, a postnuptial agreement requires a declaration of assets.

The marriage contract shares the same principles as the two previous contracts with regard to the distribution of property. It is signed during the civil marriage. The marriage contract is decided between the spouses and advised by a family law attorney.

Understanding the outline of the prenuptial agreement

In the absence of a prenuptial agreement, the management of a married couple’s property follows the regime of the legal community (regime applied by default by law). In other words, the partners let the law dictate how their property is divided.

The prenuptial agreement describes the couple’s matrimonial regime. It gives them the keys to managing their joint property and individual property. The legal act goes far beyond the choice of matrimonial regime. It also determines the fate of all the household assets throughout the marriage and until its end.

Furthermore, the prenuptial agreement must be notarized. The participation of a notary opens the doors to many prerogatives for the spouses. His presence facilitates the personalization of the contract, provided that the measures adopted remain legal.

What are the roles of the prenuptial agreement?

The prenuptial agreement prepares you for the upheaval of your life together. Certainly, newlyweds seem optimistic about the longevity of their union. However, divorce is a constant threat hanging over every household. Thus, the contract anticipates the changes that follow a divorce.

The document presents simple or complex clauses. It sets out the separation of assets and the terms of alimony payments.

In the event of a change in financial situation, the prenuptial agreement establishes a mechanism for the division of property beforehand. Indeed, an equitable separation cannot be envisaged if the financial situation of a partner deteriorates over time.

Is a prenuptial agreement a legal requirement?

A prenuptial agreement is not a legal requirement. It is up to the couple to decide whether or not to have one. If some people can do without it and be satisfied with the matrimonial regime by default, others sign the contract in order to set up the rules of management of the movable assets.

An inventory of the assets of each spouse precedes the drafting of the prenuptial agreement. In addition to the notary, thelawyer can collaborate with the couple in the drafting of the contract. He or she highlights the different parts of the document as well as their applicability. His knowledge of the field is essential in order to avoid unpleasant surprises after the breakup.

When to make a prenuptial agreement?

The prenuptial agreement is made before the official celebration of the marriage, but its broad outlines take effect on the big day.

The signature of a spouse under 18 years of age requires the approval of the court, which in turn requires parental authorization.

The postnuptial agreement is made after the marriage ceremony. The measures entered into the contract come into effect upon signature. Therefore, if the contract provides for a change in the matrimonial regime, it puts an end to the previous regime. This change then triggers a division of property before a new regime is introduced.

Why make a prenuptial agreement?

The prenuptial agreement is an optional document that appeals to few couples. However, its signature brings certain advantages.

Define the provisions in case of death

The prenuptial agreement anticipates changes related to the death of a spouse. Its measures may or may not tilt the balance in favor of the living spouse and children, descendants from a previous union or the family of the deceased.

However, the prenuptial agreement does not replace the will in any way. Its scope of application seems more limited. Indeed, it can only designate family members as the main heirs. In contrast, a will is able toaccommodate as many beneficiaries as possible, whether or not they are family members.

The prenuptial agreement contains a clause called an ” institution of contract “. Also known as the ” last survivor clause “, this part provides for the return of the deceased’s property to the spouse. Its presence thus benefits the surviving partner

Determining asset management in the event of divorce

The prenuptial agreement anticipates the possibility of a divorce. Its establishment is crucial, because it will ensure a “fair” distribution of assets in a household suffering from a great disparity of fortunes. An “equitable” division means a reallocation of assets according to the share held by each owner.

The contract also determines the law applicable to the divorce. If the contract is not in place, the judge in charge of the divorce will apply the domestic law imposing an equal division.

Having the choice on the matrimonial regime

The prenuptial agreement has the advantage of being flexible and adaptable to the wishes of each spouse. Its drafting gives you the choice of a matrimonial regime adapted to your financial situation. As a reminder, the matrimonial regime sets out the rules for the management and administration of property throughout the marriage. It also establishes the terms of their division in the event of divorce or the death of a spouse.

The prenuptial agreement gives the spouses the opportunity to make the right choice between the 4 available regimes. They also have the right to create one. The new custom-made plan will then have to comply with the law without compromising public safety.

How to make a prenuptial agreement?

Previously, the prenuptial agreement was signed in public. Now, it is signed in a private setting.

Procedures for making a prenuptial agreement

Its establishment requires :

• an information sheet attesting to the civil status of each spouse (full name, date and place of birth, address, occupation and place of work);
• an extract of their original birth certificate;
• a copy of their identity card;
• a copy of their divorce certificate (in case of a previous union).

The notary or lawyer in charge of setting up the matrimonial regime will give you a detailed overview of the mechanism behind each matrimonial regime. He or she will help you make the right choice and guide you through the drafting process.

The notary or lawyer also has a public authority mission. This task consists of taking note of and archiving the commitments of each spouse at the time of signing.

Conditions for drawing up a prenuptial agreement

Prenuptial agreements ensure the family succession. They divide the assets intended for the children and those reserved for family members in the event of death. In the event of a divorce, it saves you from negotiations over personal property.

The legal and notarized document cannot be validated without the signature of both parties. The operation is carried out in the presence of a witness (the lawyer or the notary). The legal expert verifies the content and ensures its legal conformity.

For security reasons, the contract is written on paper. The document written in black and white prevents the risk of fraud.

The rules of the prenuptial agreement

The prenuptial agreement is subject to a few rules. It delineates the rights and duties of the spouses, namely:

• mutual respect ;
• assistance (material and moral) ;
• fidelity.

As a reminder, the spouses take in hand the moral and material direction of the family. They have the duty to provide an appropriate education to the children.

As for the family residence, its management is in the hands of both spouses. The spouse cannot sell the property without the consent of his or her partner, even if he or she is the owner. This rule also applies to movable property in the home.

The partners are responsible for the common expenses related to the maintenance of the residence and the development of the children.

Matrimonial property regimes in the prenuptial agreement

The prenuptial agreement includes 4 matrimonial regimes: the regime of universal community, the regime of separation of property, the regime of community and the regime of participation in acquests.

The universal community regime imposes the pooling of assets acquired before and during the marriage, including debts incurred. The regime turns a blind eye to one’s own property.

The regime of separation of property does not allow any pooling of property. Each spouse is free to place his or her personal effects in the category of own property (individual property). Community property acquired during the marriage will be subject to joint ownership (an allocation of a share to each owner) in the event of separation.

The regime of the reduced community of acquests knows the own property and the common property. Own property” is property acquired before the marriage, received by donation or inheritance. Common property is property acquired during the marriage. Only this category is subject to a division by half upon separation.

The participation in acquests is situated between the regime of the reduced community of acquests and the regime of the separation of goods. Throughout the marriage, it follows the operation of the separation of property. In the event of divorce, the spouse with a low budget appropriates a share of the other spouse’s wealth.

How to modify the prenuptial agreement?

The modification of the prenuptial agreement is possible under certain conditions. It must be more than two years old. The change requires the consent of both spouses and the presence of a notary.

The modification is easy if there are no children. If there are no children, the court must approve the new prenuptial agreement, ensuring that the interests of the descendants are respected.

However, if the modification is detrimental to the interests of a creditor, he or she can take the matter to court in order to win the case. For example, a car used as a pledge that is in danger of being seized by the dealer cannot be the object of a donation. The dealer will ask the court to seize the vehicle against the new provisions.

Conclusion

This specific marriage contract is a new alternative for future spouses and will allow you to effectively protect your personal assets while protecting your financial interests. Take the help of a lawyer who will be able to answer your needs and allow you to choose the best contract adapted to your situation.