A prenuptial agreement is a contract that guides how a couple will address specific matters in the event of divorce – or upon the death of one spouse. While the term prenup or prenuptial agreement is very common in the United States, domestic contract or marriage contract is generally used in Canada. The terms addressed in valid prenuptial agreements are enforceable, and prenuptial agreements can address the matter of spousal support, which means that your prenup could affect whether or not you pay spousal support or a cap on how much support you may pay in the event of divorce. There is a wide range of variables involved. If you have concerns or questions regarding prenuptial agreements and spousal support, it’s time to consult with an experienced Toronto divorce lawyer.
Divorce: The Reality
Couples do not approach marriage with divorce on their minds, and this is a good thing when it comes to the institution of marriage. The reality is, however, that divorce happens, and pretending that it isn’t a possibility doesn’t do anyone any good. While Statistics Canada reports that divorce rates are declining throughout the country, about 40 percent of marriages nevertheless end in divorce. In other words, addressing the issues that may arise with divorce prior to marriage makes sense and is in no way indicative of your marriage heading in the wrong direction.
Prenuptial Agreements
Prenuptial agreements can address a wide range of divorce terms, but two of the primary concerns include:
- The division of marital property and the issue of separate property
- Spousal support
Many prenups include terms related to spousal support, and by better understanding how spousal support works, you’ll have a better understanding of the likelihood that you would have a spousal support obligation in the event of divorce. Prenuptial agreements can smooth the path forward toward divorce by taking some of the guesswork out of the equation, which can lead to a less time-consuming and less costly legal process.
Spousal Support
Spousal support is designed to help a spouse who is financially disadvantaged by divorce gain greater financial independence. If one spouse, for example, is left without the means to support themself, spousal support may be in order. The court also considers factors, such as one spouse putting their own career on hold in order to support the other’s career and the lifestyle of the couple, into consideration in spousal support determinations. When it comes to spousal support, the court has significant discretion, and factors like the following are taken into careful consideration in the decision-making process:
- Each spouse’s current assets and the assets each is likely to have in the future
- The recipient’s ability to contribute to their own support and the payor’s ability to provide support
- The length of the marriage
- The needs and circumstances of each spouse, including age
- The terms of child custody and each child’s age
- Any order or agreement relating to spousal support, which is where the terms included in your prenup come in
A Note about Spousal Misconduct
In Ontario, the spousal support obligation is outside of either spouse’s conduct. In almost all cases, misconduct on the part of one spouse or the other will have no bearing on how spousal support is calculated. In very rare situations, when one spouse’s conduct is so unconscionable as to constitute an obvious and gross repudiation of the relationship (according to the Family Law Act), it can affect the support determination, but the bar for misconduct at this level is high and will not apply to most situations.
When Prenups Address Spousal Support
Your prenup can address the matter of spousal support, and while it may protect you from having a spousal support obligation if your marriage does end in divorce, it’s important to know that there are limitations involved. In order to be enforceable, your prenup must hit all of the following primary marks:
- It must be in accordance with Ontario and Canada’s law of contracts.
- It must involve full disclosure in terms of all significant assets, liabilities, and debts at the time of its creation.
- The nature and consequences of the contract must be understood by both parties.
- There must not be duress or pressure to sign the agreement and you did not sign it of your own free will. Both sides must be agreeing to sign the prenup.
If any one of these primary requirements is breached, the prenuptial agreement can be revoked or overturned by the court. As such, if your prenuptial agreement is entered into in good faith and transparency and does not unfairly disadvantage your spouse, it can protect you from spousal support altogether – or limit your obligation – but working closely with a dedicated divorce lawyer with significant experience in this complex arena is well advised.
Considerations to Bear in Mind
The points that are most important to bear in mind when it comes to prenups and spousal support obligations include that the court handling your case can set aside a prenuptial spousal support provision or waiver and that the court may move forward with a support order even when the prenup has an express exclusionary provision. No matter how air tight the support provisions may be, in the following situations, a Court may still order support:
- When the support provision or waiver leads to unconscionable circumstances for one spouse
- When the support provision or waiver relates to a dependant who qualifies for government benefits
- When there is a default in the payment of support in accordance with the prenup at the time the application for spousal support is made
If your prenup fairly addresses the matter of support – or the waiver of spousal support – the court is likely to uphold the terms therein. If not, however, all or part of your prenup could be invalidated. Creating fair and reasonable prenup agreements are critical to having the agreements upheld by a judge.
Look to an Experienced Toronto Divorce Lawyer for the Help You Need
Prenuptial agreements can play an important role in strong marriages and can help protect each party’s rights – without the need for an extensive legal battle – in the event of divorce. If, however, your prenup is not well considered and within the bounds of the law, it may not protect you in the way you think. The seasoned Toronto divorce lawyers at M&Co Law dedicate their practices to helping clients like you craft fair, binding prenuptial agreements that provide the peace of mind they’re looking for, and we’re here for you, too. To learn more, please don’t wait to contact or call us at 416.862.0980 today.
