Why You Need to Consider a Prenup Agreement

A prenup agreement is usually associated with wealthy couples and celebrities. Not anymore. When two people get married, they essentially enter a legal partnership, the kind that can have specific terms, requiring both parties to ensure that their rights are protected. It is only fair that people who are about to get married set aside time in order to plan and execute a prenuptial agreement, especially if they have acquired assets prior to and during their marriage.

For example, one party who already owns a house before a marriage will be bringing that asset into the partnership. Most couples expect this but not many of them understand the Ontario Family Law Act, which can change the way this asset will be treated in case the marriage ends. Under this Act, any increase in the net value of an asset from the day a couple marries to the day they separate shall be shared between them. Let’s say one party has an asset with a net worth of $200,000 at the time he or she gets married. If that net worth increases to $350,000 at the time of the couple’s separation, the couple will share the $150,000 increase equally between them.

However, the same treatment cannot be expected in case of a Matrimonial Home. Under the Ontario Family Law Act, the total value of the Matrimonial Home at the end of the marriage will be shared by both parties in the absence of a marriage contract. For example, let’s say that the value of your home has increased from $200,000 to $350,000 during the time of your marriage and you continued to live together in this home until the day you separate. Since it is a Matrimonial Home, both parties will have to share the $350,000 and not just the $150,000 increase.

So what would happen if both parties move to another house during the marriage? Let’s say one partner owns a house that he or she resided in with the spouse. If the couple move to another house and continue to reside there until the day they separate, the party who owned the first house will be allowed to deduct its value.

Protecting Your Rights

The most important step that couples should take before a marriage is to have a prenup or a Marriage Contract. A prenup is especially helpful if one or both spouses own assets before the marriage. The more significant the value of the assets, the more important it is to have a prenup in place. A family lawyer can help you in taking this step.

Do You Need Legal Assistance?

A prenup can be a rather complex document, one that must be planned and considered carefully in order to protect not just one’s assets but also the interests and future of one’s beneficiaries and heirs. Our skilled and experienced legal professionals at Fine & Associates Toronto Family Law & Divorce Lawyers can provide you with the correct and up-to-date information to help you draft a fair and effective prenup agreement that will ensure your security and protection when and where you need it most.