Change of Plans: Postponed weddings give couples time to plan for their futures
/Postponed Weddings and Prenups
The COVID-19 pandemic has caused a cascade of wedding postponements and cancellations. Many couples are deciding that they would rather hold off on celebrating their love (and changing their marital status) until it’s possible to come within six feet of family members and friends.
Postponing the big wedding day allows couples the opportunity and additional time to consider entering into a prenuptial agreement. If you were toying with the idea in the past, but got wrapped up in the party planning instead, now is the time to secure your financial future with a spousal agreement. What is more romantic than giving your future spouse certainty about how you intend to divide your assets and debts upon separation (if irreconcilable differences crop up) before tying the knot?
Adrianna Banaszek of Banaszek Family Law explains what prenuptial agreements are, and why they are becoming increasingly popular, especially among millennials.
What is a ‘Prenup’?
A Prenuptial Agreement (“prenup”) is a contract between two future spouses that settles issues of property and debt division, spousal support, or any other matters you wish to make crystal clear in the event of a party’s death or divorce. Entering into a prenup provides parties the opportunity to plan for the unthinkable, which is often difficult, but VERY important. Having a binding plan sorted out in the event of a divorce often saves spouses money because their matters are already decided and do not need to be mediated, litigated or arbitrated. Plus, it’s much easier for most couples to make clear and fair decisions during the “honeymoon phase” or the “postponed wedding” phase, instead of when they are questioning why they decided to walk down the aisle in the first place.
If you do not enter into a prenup, you will be subject to the Divorce Act (Canada) and legislation of your jurisdiction. In Alberta, for the most part, assets and debts accumulated during the marriage will be divided equally, save for exemptions which may apply (like gifts, inheritances and windfalls). Just because you acquired an asset before you began your cohabitation or before marriage, does not mean it is exempt from division with your spouse. The increase in value of “pre-marriage assets” during the duration of your marriage may be subject to equal division as well. If you do not want the legislation to automatically apply to your relationship upon dissolution, entering into a prenup is a way of contracting out of this framework.
The Prenup Process
Bringing up your desire to enter into a prenup or a cohabitation agreement to your partner may be difficult. Some people relate entering into a marriage contract as a sign of distrust, a way of jinxing the relationship, or extinguishing the passion. It may be beneficial to book an initial consultation with a family lawyer before discussing the matter with your partner so that you have an overview of the laws affecting you while you are not covered by a prenup. If your partner is already on board with entering into a marriage agreement, take note that at Banaszek Family Law, we will only meet with one party to the agreement to protect your interests, avoid a conflict, and to ensure that the agreement will not be overturned in the future.
Financial Disclosure Exchange: What’s mine is yours?
The exchange of complete financial disclosure (documents) between the parties to the agreement is part of the drafting process and one way of ensuring that the agreement is not overturned in the future. Sharing details about your assets (savings, property ownership) and debts/financial obligations (student and credit card debts, lines of credit, leases, mortgage) with the person you intend to spend the rest of your life with puts both parties on an equal “knowledge” playing field.
When each party’s financial picture is laid out on the table, the agreement to be entered into becomes more equitable. It also gives each spouse more information about their life partner. After entering into a prenuptial agreement, each spouse should be more prepared to make the decision to marry because they know what they are signing up for from a financial standpoint.
Independent Legal Advice
Once the agreement is drafted by Banaszek Family Law and both parties have had the opportunity to review and approve its’ contents, each party will obtain independent legal advice before entering into the agreement. This will require that your partner attends at a separate law firm and meets with a different lawyer to receive legal advice on the agreement and have their signature witnessed. Obtaining independent legal advice will help ensure that the agreement is not subject to being overturned because one party did not receive the full advantage of legal advice. Obtaining independent legal advice also significantly reduces the possibility that one party can overturn the agreement in the future by claiming that they entered into the agreement under duress or that they did not understand the legal impact of certain clauses of the agreement.
Prenups for the People
Prenups are no longer reserved for the famous and wealthy. Although pop culture often depicts prenups as a preservation tool for the rich party, the less wealthy spouse may also be protected under the agreement with the inclusion of clauses that benefit their position (often upon receiving independent legal advice on the agreement).
With common law relationships on the rise in Canada and Canadians waiting longer to get married or having to postpone their wedding due to unprecedented global events, more spouses are bringing assets (and debts) into new marriages rather than accumulating them together. Career and financial stability have become priorities before marriage for Canadian millennials (Cardus Family study, August 2016), which in turn increases the need for prenups.
There is a cost/benefit analysis which needs to be undertaken in advance of entering into a prenup, and usually the benefit outweighs the cost because there is so much uncertainty in the future and many people want to keep what they worked hard to accumulate prior to tying the knot. Prenups are now, more than ever, for all people!
Banaszek Family Law is here for you
It is very difficult to plan for all of the variables that may form part of your life and marriage but you can mitigate some of the risks by entering into an agreement with your spouse. The future holds a lot of unknowns, which has become evident with the sudden spread of COVID-19 and its’ adverse impact on countless lives worldwide.
Banaszek Family Law offers flat rates for uncontested family law agreements, including: prenuptial, postnuptial, cohabitation and separation agreements. Make the next move by scheduling your initial consultation with Adrianna Banaszek today, HERE. We are pleased to continue offering a discounted rate during July and August 2020 for telephone and video conference consultations.
Banaszek Family Law is here to assist you during this unprecedented time ●
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