Wealth, Inheritances and Prenuptial Agreements in Ontario
Published on 29 August 2022, 07:22:56 AM
May plans to wear blush pink organza, Wong a black suit and tie on their wedding day. They’ll travel in his 2018 Corolla to her parents’, then his, for the traditional tea ceremony. If it all falls apart, she’ll get the RBC mutual funds. He’ll keep the car and GICs. It’s in the prenuptial agreement they signed last week.
Who Makes a Prenuptial Agreement
May and Wong may be just starting out, but they have credit card debt and Ontario student loans to pay. They’re young, ambitious and in love. They’re pretty confident they can make it work. Like most modern couples they have assets to protect. They’re planning ahead with a prenuptial agreement.
How Inheritances Affect Prenuptial Arrangements
Prenuptial contracts aren’t traditional in Singapore, where May’s family came from, but her mother has encouraged her to make one. She wants May to have a good life and plans to make a new will leaving her a vacation lot at Honey Harbour and her Ottawa condo. May’s net worth will go way up when she inherits.
Make a Prenup When You Have More Assets
May’s mother likes Wong, but she doesn’t know him or his parents very well yet (neither does May). Wong just sponsored his parents from Beijing. They are starting over in a new country and have some savings, but no property or other significant assets. Her mother worries about what would happen to May’s inheritance if the marriage fails. On a wills and estate lawyer’s advice, she will wait until the couple is married to gift the lot and condo to May.
Will Gifts After the Wedding
If her mother willed the properties to May before she married, they would be part of her assets if the couple split. Gifting May the inheritance after the wedding excludes it from her net family property. May has to be careful that she doesn’t use the inheritance to buy joint assets like a matrimonial home or put it in a joint bank account. If she does that, it will become a shared asset.
Make a Legally Binding Prenuptial Agreement in Ontario
May and Wong’s prenuptial agreement includes all their major assets and liabilities and how they will be distributed in a relationship breakdown. Being truthful about their net worth was important because wrong or withheld information could undermine the contract and their marriage.
Red Flags for Prenuptial Arrangements
May’s mother gave her good advice about red flags to watch for in making prenuptial commitments. She knows it’s wise to be wary if:
- your new partner or fiancè is dodgy about their finances
- the terms seem unfair or make you uncomfortable
- your assets outweigh your partner’s
- their debts significantly exceed yours
- family members are over involved
- or you feel rushed into signing.
Moving too quickly or without thinking things through can backfire. While the terms can be changed, standing her ground now is important to prevent May from being resentful later.
Get Independent Legal Advice
Virtual notary publics who deal with prenuptial agreements agree. They recommend getting independent legal advice before signing a prenup. When the excitement of a new relationship wears off, you’ll appreciate having made informed decisions about your financial future.
4 Reasons to Get a Legal Opinion on a Prenup
- A prenuptial agreement may affect your legal rights. Before you give up something you didn’t intend to, ask an Ontario family lawyer about your legal choices. (Axess Law notary publics are licensed lawyers.)
- Having separate lawyers prevents you from being unduly influenced, by love, anxiety or uncertainty, into agreeing to unfavorable terms.
- Getting a legal opinion prevents your partner from saying they didn’t understand the agreement.
- Family lawyers ensure your contract doesn’t have gaps and is legally valid.
Grounds for Ending a Prenuptial Agreement or Marriage Contract
Honesty is the best policy because Ontario’s Family Law Act allows domestic contracts or prenuptial agreements to set aside for:
- non-disclosure of assets, debts or liabilities
- failure to understand the contract
- or any breach of contract law.
Simply put, the courts consider it unethical and unreasonable to form a contract that isn’t truthful, was signed under duress or wasn’t fully explained.
Preventing Undue Influence While Signing
Having a notary public on your side protects you from coercion that can void a legal contract. The notary public, by video call or in person, checks that others in the room aren’t pushing you to sign against your will. They verify your partner’s identity and can make a video recording of the prenuptial signing.
Ensuring Prenuptial Contracts Hold Up in Court
If a relationship breakup happens to you, your marriage contract or prenuptial agreement may be subject to review by an Ontario family court judge. Some aspects of your prenup or domestic contract, especially child custody or child access visitation rights, may be ruled out of order if you haven’t ensured it is 100% legally correct. Ontario’s Family Law Act prevents spouses or common-law partners from including decisions about custody, access or child support in a prenuptial agreement. Only a family court judge can decide who takes care of your children after separation. Getting legal advice beforehand reduces the chances of signing a wrongful or misleading agreement.
Your Prenup is Official
May’s and Wong’s prenuptial agreement was immediately legally binding the minute they signed and had it witnessed. Now they just have to survive the wedding and live happily ever after.
Practical, Affordable Divorce Advice for Ontario Families
Axess Law Ontario lawyers give you legal advice on how to make a prenuptial agreement. Virtual family lawyers are available by video conference 7 days a week, at times that fit your schedule. Day or evening appointments can be arranged by dialing toll-free to 877-522-9377 or in Greater Toronto at 647-479-0118 or using our online booking form. In person appointments with licensed Ontario lawyers are available at our Ottawa, Toronto, Scarborough, Vaughan, Etobicoke, Mississauga Winston Churchill or Mississauga Heartland law offices.
Click here to learn more about Axess Law’s family law services.
