The benefits of having a prenuptial agreement

This may be a sensitive and cliché topic, but it’s a topic most people don’t even dream of having, but they should. Especially if you enter into a relationship or marriage with your own assets you want to protect. In the words of Kanye West, “we want prenup!”

What is a Prenuptial Agreement?

A prenuptial agreement, or “prenup” for short, is a contract between two people who are planning on marrying. Prenuptial agreements usually set out how property and debt will be divided when dissolving the marriage, but it can also include other terms. A prenuptial agreement can help give you and your partner peace of mind and provide financial certainty now and in the future. Prenuptial agreements are wrongly categorized as serving only one party, despite the clear benefits that both parties can receive. 

A prenuptial can pre-determine how spousal support is to be paid, what type of parenting regime will transpire, the decision-making responsibility that each parent will have regarding the children, and almost anything else the parties agree to—unless it is contrary to public policy.

Why should my partner and I get a prenuptial agreement?

There are no reasons not to get a prenuptial agreement and several reasons to get one. Negotiating a prenuptial agreement takes the emotion of separation out of the process and often leads to results both parties regard as fair. Many Albertans are worried about bringing up the potential for a prenuptial agreement because they think or know that it will lead to an argument. The reality is that these potential arguments are a sample of the acrimony that couples stand to face when undergoing the separation process. It is best to resolve your different visions before marriage, rather than after. There is also the belief that getting a prenuptial agreement is indicative of a lack of trust, but that disregards the truth—entering into a prenuptial agreement with your partner before marriage can significantly minimize the cost and difficulty of getting a divorce.

Statistically, a contested divorce costs, on average, $15,570.00 in lawyer fees per party, and more than $30,000.00 between both spouses. It is financially prudent to get a prenuptial agreement when considering Canada’s national divorce rates are just shy of 40%. 

There are several other reasons to get a prenuptial agreement. You might want to get one if you or your partner:

  • Own property or a business
  • Have children from a previous relationship, or have been married before
  • Plan to take time off to raise children
  • Have significant debt
  • Have robust retirement savings
  • Will receive stock options during your marriage.

Without a prenuptial agreement, your marriage and its dissolution will be governed by statutes such as Alberta’s Family Property Act, leading to unpredictability and uncertainty, and the subsequent costs.

Is it financially worth it?

A prenuptial agreement can be key in resolving many issues that require resolution before divorce is granted. Resolving said issues in Court or by way of settlement can take months or years to achieve and can cost tens of thousands of dollars. Here at Hayes Fry Law, we weigh the costs against the benefits at every step of the way to make sure that every dollar you spend is a dollar well spent.

Why don’t we make our own?

Having a lawyer draft or review your prenuptial agreement is essential in ensuring the validity of the contract. Prenuptial agreements negotiated without the insight of a lawyer may lead to the agreements being unenforceable. In getting a prenuptial agreement, your interests are in certainty, predictability, and fairness. All these interests are put at risk if the prenuptial agreement is found to be invalid or unenforceable.