A whopping 38% of marriages end in divorce, yet only 8% of Canadian couples have prenuptial agreements, according to the latest poll from Ipsos. However, that trend is changing as millennials increasingly choose to sign a prenup.
In this post, we answer all your common questions about prenuptial agreements in Alberta.
- What is a prenuptial agreement?
- What is included in a prenuptial agreement?
- Why should we have a prenuptial agreement?
- Is a prenuptial agreement required in Alberta?
- How much does a prenuptial agreement cost in Alberta?
- When should we sign our prenuptial agreement?
- What makes a prenuptial agreement valid in Alberta?
Here are 7 important things you need to know about prenuptial agreements in Alberta.
What Is A Prenuptial Agreement?
A prenuptial agreement is a contract between two people who are planning to be married. It overrides the Alberta Family Property Act in the distribution of property and debt at any time during the marriage, and especially in the event of divorce or separation. The contract is signed before marriage, but becomes enforceable only after the marriage has happened.
What Is Included In A Prenuptial Agreement?
A prenuptial agreement can include details about anything the parties want, but it typically addresses:
- Division of property
- Spousal support
- Parenting and custody arrangements
The division of property is the most common issue detailed in a prenuptial agreement. It addresses who gets what, including debt and assets such as RRSP contributions, savings and investments, gifts and inheritance, intellectual property, royalties, and business assets.
Why Should We Have A Prenuptial Agreement?
There’s a misconception that wanting a prenuptial agreement is a sign of trouble in a relationship. Actually, a prenuptial agreement shows responsibility and can be an expression of your care for each other. It’s far better to make big decisions about the distribution of your assets when your relationship is emotionally healthy than when you’re caught in the thick of conflict.
An interest in a family business is an example of something to address in a prenup, especially if the family wants to keep the business in the family of origin. Or in the event of a separation or divorce, does it make sense for both of you to continue paying for a student loan that only one of you used? Is it fair to share an inheritance one of you received if you’re not together anymore?
Some couples want to protect the assets they brought into the relationship. So if the relationship ends, each party keeps what they brought into it. The prenuptial agreement can ensure that happens, and detail how assets gained together will be divided.
Your prenuptial agreement can also eliminate the option of spousal support in the event of separation or divorce.
Is A Prenuptial Agreement Required In Alberta?
No. A prenuptial agreement is not required in Alberta. It is an optional contract that can provide peace of mind and simplify arrangements in the event of divorce or separation.
Without a prenuptial agreement, in the event of a divorce or separation, all property would be divided equally between the parties according to the Alberta Family Property Act. If you want your property divided otherwise, you’ll need a prenuptial agreement.
How Much Does A Prenuptial Agreement Cost In Alberta?
The cost of a prenuptial agreement in Alberta depends on the complexity of your contract and the negotiation process. Generally, a prenup costs less than $2,000.
If the cost of a prenuptial agreement seems high, consider the high cost of a divorce—especially one with intense conflict that requires hours of negotiation and litigation.
When Should We Sign Our Prenuptial Agreement?
It’s never a good idea to sign any contract hastily. Signing your prenuptial agreement at least 6-9 months before your wedding ensures that you have lots of time to think about it and minimizes the risk of signing under pressure.
What Makes A Prenuptial Agreement Valid In Alberta?
For a prenuptial agreement to be enforceable in Alberta, both parties must have their own lawyer, and the contract must be signed in the lawyer’s presence. In signing the agreement, each spouse must:
- Be aware of the nature and impact of the contract
- Be aware of how property will be divided in the event of divorce or separation
- Not be under coercion, fraud, or undue pressure. They must sign “freely and voluntarily without any compulsion”.
To prevent the risk of your prenuptial agreement being unenforceable, full disclosure is required during the negotiation process. No party can hide assets. Also, the contract should be clear, fair, and realistic.