One of the underlying themes of the Alberta Family Property Act (FPA) is the ability for parties, within limits, to proactively determine how they want to handle certain issues should they ever decide to part ways. Section 37 of the FPA specifically provides parties with this ability via the use of a contract – enter the prenuptial agreement (aka prenup)!
You have probably heard the term, and without a doubt, have some level of familiarity regarding the use of a prenup. However, I’d venture to guess that most people associate a prenup with the protection of property accumulated before the marriage. For example, homes or vacation homes, savings accounts, investments and so on. What you might not realize, is that even in the absence of substantial assets, there is still incredibly valid reasons for parties to consider the use of a prenup.
Last month we introduced the topic of spousal support and explained how such support is determined upon the breakdown of a relationship. In a nutshell, when a relationship ends one party may be responsible for providing support to the other party. This support could have absolutely nothing to do with property obtained prior to the commencement of a relationship. Instead, this type of support is based on the relationship itself and the position the parties are in post-separation. For more information on that, please go back and read our blog Spousal Support 101: Entitlement.
All of this is to say that, while you may not believe that a prenup could be useful to you, it absolutely may be a valuable tool for setting the terms of spousal support payments upfront.
Spousal Support Waiver
Having a prenup will allow you and your partner to engage in open and honest discussion surrounding how you want to handle certain issues should you ever separate. As a result of that discussion you may decide that including a waiver in your prenup, regarding any future claims that either party might have to spousal support payments, is the right decision for you. It is important to note that, when including such a waiver it is critical to ensure that it is done in a way that ensures the overall objectives of the Divorce Act are still being carried out.
FYI: Unmarried cohabitating couples can experience the same type autonomy via the use of a cohabitation agreement.
Ensuring Enforceability
There are circumstances in which entire contracts, or provisions of contracts, might be set aside. That is why using an experienced lawyer to assist with drafting and executing your prenup is advisable. If one party decides to contest the contents of the prenup a court will consider a number of factors when determining whether to uphold or set aside the contract. In a case known as Miglin v Miglin the Supreme Court of Canada outlined exactly what courts should consider when faced with a contested prenuptial or cohabitation agreement. Here are a few of the things they will consider:
- Circumstances surrounding the negotiation of the contract. For example, whether there was any pressure or influence;
- Whether either or both parties sought their own independent legal advice before signing;
- Whether the prenup considers and accounts for the overall objectives of the Divorce Act; and,
- Whether or not the prenup accurately captures the original intention and wishes of the parties.
Our team at Hayes-Fry law has extensive experience working with parties to draft and execute both prenuptial and cohabitation agreements and we would be happy to assist you as well.
If you’re interested in learning more about how you can use a prenuptial or cohabitation agreement to set the terms of your relationship, the Hayes-Fry law team is here to help. Give our office a call today at 780.831.7370 or email reception@HayesFryLaw.ca to book a consultation.
The following resources were relied on in the preparation of this blog:
- Divorce Act, R.S.C., 1985, c, 3 (2nd Supp.)
- Family Law Act, SA 2003, C F-4.5.
- Miglin v. Miglin [2003] 1 SCR 303.