Congratulations on your engagement! Amidst the hustle and bustle of wedding planning, you’re wisely “taking the plunge” towards financial clarity with a prenuptial agreement. We applaud you! And we also understand that navigating this process can feel overwhelming, so we’ve created this comprehensive guide to help you understand everything you should know before signing a prenup in Ontario. Consider this your roadmap to informed decision-making, ensuring you embark on your marriage journey with confidence and peace of mind. Let’s dive in!
The prenup formality requirements in Ontario
In Ontario, you must follow several formalities to have a valid and enforceable prenup. Signing a “kitchen table agreement” is risky, so it is best practice to ensure you follow the rules laid out in Part VI, Section 55 of the Family Law Act. The formality requirements for an Ontarian prenup include:
- Put the agreement in writing
- Make sure both parties sign it
- Make sure there is at least one witness to the parties’ signatures
In addition, another formality of an Ontario prenup is something known as financial disclosure (See Section 56 of the Family Law Act). This formality is the act of sharing the values of all your assets, income, and debts with your soon-to-be spouse.
What you can and cannot include in an Ontario prenup
Prenups are not an “everything goes” kind of arrangement. While there is plenty you can include, such as property division, spousal support, pet ownership, matters upon death, and much more, there are still limitations. Here is what you cannot include in an Ontario prenup:
- Clauses restricting rights to the matrimonial home (Section 52 of the Family Law Act)
- Clauses regarding child support (Section 56 of the Family Law Act)
- Clauses regarding child custody (Section 56 of the Family Law Act)
- Clauses regarding chastity ((Section 56 of the Family Law Act)
- Any other illegal clauses or clauses against the public policy of Ontario
While the above clauses are unenforceable, generally, what happens if you do include these clauses is the judge will strike the clause down but still enforce the rest of the contract (as long as everything else is valid and enforceable).
Prenups can be set aside by a judge in Ontario
An Ontario court has the authority to set aside a prenup— rendering it invalid and unusable—if certain conditions aren’t met. This means your divorce will proceed under the default laws of the province.
Here are some situations where a judge might intervene and set aside your prenup:
- Failure to follow legal requirements: If the agreement wasn’t properly executed (not signed, not in writing, not witnessed) or lacks full financial disclosure, it could be challenged.
- Lack of understanding: If one or both parties didn’t fully comprehend the terms of the agreement, a judge might find it unenforceable.
- Unconscionability: If the agreement is grossly unfair or one-sided, the court may set it aside to protect the disadvantaged party.
- Fraud or Duress: If the agreement was signed under some type of fraud, mistake, duress, coercion, misrepresentation, undue influence, etc., it could be invalidated.
- See Section 56 of the Family Law Act for the fine print on when a judge can set aside an Ontario prenup.
Your prenup should be reasonably fair
This should go without saying, but it’s important to bring up. No one should go into the prenup process thinking that they’re going to achieve a windfall out of their partner. It should be a collaborative process where both parties are satisfied with the terms of the agreement. Now, this doesn’t mean things need to be 50-50, just reasonably fair. Put differently, one person should not be sailing away from the divorce with a yacht while the other person needs public assistance. Each party should be “getting something” out of the agreement. And keep in mind that if your agreement is deemed unreasonable by a judge, then it can be set aside.
What if you move to another province or country?
Most lawyers will make sure you include a “choice of law” provision that says what law governs your prenup. If you are living in Ontario, then you would generally make Ontario the controlling law for your agreement. However, what if you are living there now but plan to move in the future? Or what if you aren’t sure about where you’ll be living in the future? The good news is that many other provinces in Canada and states in the US will honor a foreign contract, but it is no guarantee. You may want to consider amending your prenup in the new state that you move to and/or speaking with a lawyer in the prospective locations you might be moving to.
Do you need to amend your Ontarian prenup?
When you get a prenup in Ontario, you mostly shouldn’t need to amend it again because a well-drafted prenup should account for future life changes. However, you do have the option to amend the agreement if something out of the blue occurs. For example, if you won the lottery (no one expects this), and you’ve received a windfall of cash, you can always amend your prenup to reflect this huge change in finances if that makes sense for your situation.
What if you want to revoke it?
Yes, you can always revoke your agreement down the road if you want to. If you do revoke your prenuptial agreement and do not put into place another marital agreement, then the default laws of Ontario will apply to the division of your property and spousal support in the event you get a divorce. If that’s okay with you, then, by all means, revoke your agreement. You can do so by executing a revocation agreement and following the same formalities as required for the original prenup, as laid out by Part VI, Section 55 of the Family Law Act.
How much will a prenup in Ontario cost?
Traditionally, the cost of creating a prenup agreement in Ontario could be a significant barrier for many couples. However, thanks to advancements in technology, more affordable options are emerging. Online platforms are making prenups increasingly accessible, allowing couples to navigate the process with greater ease and at a fraction of the traditional cost. While complex situations may still require the expertise of a lawyer, which can range from $5,000 to $10,000 or more, innovative solutions are empowering couples to take control of their financial future without breaking the bank.
The bottom line
By approaching the prenup process with a clear understanding of the requirements, potential costs, and long-term implications, you’re setting the stage for a smooth and collaborative experience with your fiancé. Familiarize yourself with the key considerations, such as the laws governing prenups in Ontario and how moving might affect your agreement. With this knowledge in hand, you’re well-equipped to create a prenup that reflects your shared financial goals. Now, let’s move on to defining those goals and shaping an agreement that works for both of you. Happy planning!
Anna-Marie Musson is a Family Lawyer with over 20 years’ experience. A graduate of Windsor Law, Anna-Marie began practising in 2003. She was a partner at a prominent national Bay Street law firm before starting her own firm. Anna-Marie helps professionals and high net worth clients navigate the financial, emotional, and legal issues in divorce and separation. She also helps clients preserve their net worth and avoid financial ruin with Marriage Contracts (Pre-nups) and Cohabitation Agreements. Anna-Marie is the host of the Modern Divorce Show on 105.9 The Region and also hosts the upcoming Podcast – Love & Wealth.
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