Marriage should be about celebrating the unification of two people and their families, not about signing a contract about the division of assets should the marriage you are eagerly awaiting come to an end. Prenups are not the kind of thing that couples want to be thinking about as they approach the big day, but they can be beneficial for both parties in the future.
Why Should I Sign a Prenuptial Agreement?
Prenuptial Agreements (“prenups”) are contracts between spouses that pre-emptively settle
disputes over property, finances and other matters. Effectively, you and your future spouse
disclose the details of your finances and debts in order to give each other full knowledge of
what each party has. After this disclosure is complete, both parties will come to an agreement
that will govern the division of those assets should your marriage end.
One of the benefits of entering into a prenup is that you are able to make decisions about your belongings with a clear mind. When a marriage ends, it is likely that both parties will
be emotional for an extended period of time and it is very difficult to come to reasonable and
equitable decisions during that time. Despite being an uncomfortable topic for most couples,
discussing and signing a prenup can provide you with peace of mind and allow you to focus on
your relationship.
Another benefit of entering into a prenup is that it can save you money. When a marriage ends
and a prenup has not been signed, there will likely be disputes over who gets what. When such
a dispute arises, mediation or litigation is often needed which costs both parties a
significant amount of money. However, it is not a free-for-all. If you and your spouse do not
enter into a prenup, and you eventually get divorced, the Divorce Act and other relevant
legislation like the Family Property Act in Alberta will govern the division of your assets.
The Divorce Act
The name of the game when it comes to the division of assets under the Family Property Act in
Alberta is “Equal Division”. With some exceptions, all of the assets and debts that you and
your spouse accumulate over the course of your marriage will be divided equally. In addition,
the court deciding such matters will have the discretion to divide some of the value of
property owned prior to the marriage. The divisible value of the pre-marital property is
determined by subtracting the market value of the property at the time of marriage from the market value of the property at the time of trial. The division of that value will be subject
to what the court considers just and equitable. Entering into a prenup allows you to decide
for yourself how you would like your property to be divided should your marriage come to an
end.
Independent Legal Advice
An essential part of the prenup drafting process is both parties acquiring independent legal
advice. Although it goes without saying that both parties should read and understand the
agreement, it is crucial that both parties acquire a second opinion before finalizing the
agreement with their signature. Independent legal advice means that each party obtains individual advice from different lawyers at different firms. Not only is this element important for the understanding of each party, it is also important in ensuring that the agreement does not get overturned in the future.
E&T Legal is Here to Help
If you need help navigating a legal matter, do not hesitate to call E&T Legal. As a full-service law firm in Calgary Alberta, E&T legal is able to help you with a wide range of legal issues including family, immigration, real estate, criminal, employment, estate planning, probate, and personal injury. Get the process started by contacting our office here.
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