What Is a Prenuptial Agreement?
Many couples aren’t aware of what this type of agreement encompasses, how it can benefit them, and whether or not they should go for one.
In this article, we explain all the burning questions about prenuptial agreements.
What Is a Prenuptial Agreement?
A prenuptial agreement is a contract signed by two people before the beginning of a marriage. It concerns how they will manage the property and financial assets during and after the marriage, if the latter scenario transpires.
When two people decide to sign a prenup, they have agreed to set ground rules when it comes to the obligations each party has towards the other should the marriage end in divorce or upon the death of one partner.
The document needs to be in written form and signed by the two spouses and two witnesses for each party. One such agreement can cover a variety of matters:
- Support obligations
- Property ownership and division
- Children’s education and moral training
However, custody and child access issues can’t be regulated with a prenup.
When’s the Time to Sign the Prenuptial Agreement?
There are no deadlines for when a prenuptial agreement should be signed. However, the closer you get to the wedding date, there’s more chance of issues arising. One party can say they were under duress because they already paid the caterer, or the guests were in town, etc.
It’s recommended to start drafting the document at least six months before the wedding date. It’s best to do so prior to making deposits to the caterer or the venue.
Who Needs to Sign the Prenuptial Agreement?
People who have already signed up for a cohabitation agreement and decide to get married don’t have to sign a prenup. The cohabitation agreement automatically becomes prenuptial once the wedding takes place.
Recently, prenups have become popular among partners who have obtained significant amounts of money or assets before the marriage. That’s why many celebrities have such agreements in place. However, prenups aren’t only for the rich.
Here’s why any couple may want to sign such a contract before starting a marriage:
- Settle grounds for passing property to children from a previous marriage
Couples who have children from previous marriage(s) can benefit from prenups to determine what happens to their property upon their death. A partner can decide to pass some property to their children while still providing for the other partner. No prenuptial agreement means the surviving spouse can claim the deceased party’s property and leave little or nothing to the kids.
- Avoid future arguments
Another reason to sign a prenuptial agreement is to avoid arguments upon divorce. Couples may want to determine how exactly their properties will be managed or set grounds when it comes to alimony.
- Debt protection
Signing a prenup can also protect one spouse from the other party’s debts. They may be held accountable for paying them off even if they had little to do with how the debt accumulated.
What Happens If You Don’t Sign a Prenup?
When you sign a prenuptial agreement or a marriage contract, you’re entitled to specific property rights. In the absence of these agreements, spouses have the following rights:
- Accumulate debts the other spouse may be liable to pay for.
- Share the ownership of property obtained during the marriage and agree that the property can be divided in case of divorce or death.
- Share the community or marital property control and management. This can include the right to give it away or sell it.
If you don’t sign a prenup, your local legislature determines ownership of the property obtained during the marriage and what will happen to it in case of death or divorce.
If any of the marital property or divorce laws aren’t to your liking, it’s worth considering a prenuptial agreement.
Can a Prenup Be Revoked?
Yes, Ontario Family Law Act allows the court to revoke the agreement or any part of it in the following circumstances:
- Any of the parties didn’t understand the agreement’s nature and consequences.
- Any of the parties fails to disclose significant liabilities or assets.
- In accordance with the law of contracts.
Prenuptial Agreement Explained
As you can see, a prenup covers a range of issues that can impact how your financial and other assets are divided or treated in the case of divorce or death. Couples thinking about getting married should discuss. Whether or not they should sign such an agreement, despite the uncomfortable nature of the subject.
If you still have doubts about this document or want to start drafting one, it’s best to consult a professional to help you out.
Legalhood offers an affordable online prenuptial service, click here to find out more.
