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The words his and hers on opposite ends of a balance beam symbolizing prenups

If you are about to get married, you may wonder whether a prenuptial agreement is worth bringing to your soon-to-be spouse. Especially since prenups can be misconstrued as unromantic or even a "red flag." But they shouldn't be!

Prenups are a great way to ensure everyone is on the same page before committing a lifelong commitment.

Still not sure about whether to get a prenup? Let's go over what you need to know to help you make this decision, from what is a prenup to chastity clauses and more.

Definition of Prenup: What is a Prenuptial Agreement?

A prenuptial agreement, or marriage contract, is a written agreement between a couple before they marry.

It outlines how assets will be divided if the marriage ends.

The agreement specifies each person's property, assets, and debts and how they will be divided in separation or divorce.

The agreement can also address spousal support.

The purpose of a prenup is to define each person's rights and responsibilities if the marriage ends. It can help protect assets and shield one partner from the other's debts.

Prenups are enforceable in Canada as long as they are valid. However, a court may revoke the agreement if it is proven that one party did not disclose or undervalued their assets.

The contract becomes unenforceable if the court determines that one of the parties was dishonest or is guilty of misrepresentation.

In the US, these agreements are commonly referred to as prenuptial agreements. In Canada, prenups are called "domestic contracts" or "marriage contracts."

Additionally, two persons may enter a cohabitation agreement before or during cohabitation. If two cohabitating persons later get married, their cohabitation agreement will become a domestic contract.

Qualifications for a Marriage Contract in Ontario

Under section 52 of the Family Law Act, two people who are already married or who intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or separation, annulment, or death.

Marriage contracts may deal with many different marital issues, including:

  • Ownership or division of property
  • Support obligations
  • The right to direct the education and moral training of their children
  • Any other matter in the settlement of the spouses’ affairs.

Prenups are enforceable in Canada as long as they are valid. Marriage contracts may not, however, deal with the right to custody of or access to the spouse’s children. A marriage contract may not limit a spouse’s possessory rights in the matrimonial home.

What is the Difference Between a Prenuptial Agreement vs. a Marriage Contract

A prenuptial agreement is a marriage/domestic contract made before the marriage.

In recent years, prenuptial agreements have become especially popular among spouses who have accumulated a substantial fortune or specific assets before marriage.

Many celebrity couples, including Michael Douglas, Catherine Zeta-Jones, Denise Richards, and Charlie Sheen, have prenuptial agreements.

Often, such agreements will spell out the amount of support a spouse will receive for each year of marriage, as well as an additional clause in the event of adultery.

The Benefits of Prenuptial Agreements/Marriage Contracts

Some commentators have also questioned whether such agreements contribute to divorce. Some argue that prenuptial agreements put an expiration date on marriage or incentivize divorce.

Others argue that having consequences to divorce in place effectively reduces the likelihood of divorce and forces couples to work towards reconciliation.

A 2003 Harvard study suggested that two main reasons for the lack of prenuptial agreements are:

  1. People think they are unnecessary because they have a false optimism that marriages will last and
  2. People believe that discussing prenuptial agreements signals uncertainty about marriage.

Nevertheless, such agreements appear to be gaining popularity.

Premarital Agreement Statistics

Legal commentators and practitioners estimate that only 5 to 10% of the population enter prenuptial agreements. So, are the divorce rates higher among married couples with prenuptial agreements in place?

Unfortunately, due to the private nature of these agreements, there is little statistical information regarding the divorce rate in marriages with prenuptial agreements.

Recently, many commentators have argued that such agreements are wise, given that the divorce rate is so high (50% in the USA and 38% in Canada).

It is important to note that although prenuptial agreements commonly deal with spousal property, they can also be helpful in other scenarios.

Heather Mahar, a research fellow at the John M. Olin Centre for Law, Economics, and Business at Harvard Law School, explains that “prenuptial agreements can go beyond preserving assets before the marriage."

For instance, such agreements may dictate custody arrangements or allow the couple to agree to divorce only in the presence of traditional grounds of fault, such as cruelty or adultery (as opposed to the no-fault divorce in today’s legislation). She notes that the ability to make such agreements makes marriage more stable.

Can a Prenuptial Agreement Be Overturned or Revoked?

Section 56(4) of the Family Law Act provides that the court may set aside all or part of a domestic contract on the grounds of:

  1. Non-disclosure of significant assets, debts, or liabilities at the time of contracting;
  2. Failure of a party to understand its nature and consequences or
  3. Otherwise, following the law of contracts.

This section imports the "doctrine of unconscionability." This doctrine focuses on the circumstances under which the contract was formed.

Child Support Guidelines & Domestic Contracts

Provisions of domestic contracts regarding the care and support of children are subject to the child's best interest. They may be set aside if they are unreasonable about the Child Support Guidelines (CSG).

"Chastity Clauses"

Clauses in domestic contracts making continued support contingent on the recipient spouse’s chastity are unenforceable. "Chastity clauses" in agreements made before March 1, 1986, are interpreted as meaning that support to the recipient spouse will end upon the recipient spouse’s marriage or cohabitation with a new partner.

The court may also set aside a separation agreement entered into in exchange for securing the removal of religious barriers to remarriage.

Setting Aside a Domestic Contract

The court’s approach to setting aside a domestic contract was dealt with in LeVan v LeVan. The proper approach is determining whether the person seeking to set aside the agreement can bring themselves within one of the situations listed in s—56 (4) (noted above).

If so, it must then be determined whether the court should exercise its discretion in favor of setting aside the contract. The claimant must persuade the court to exercise discretion in their favor. The party seeking to set aside the agreement bears the burden of proof in establishing one of the situations under s. 56(4).

Still curious about what is a prenup? Or have you entered into a Canadian prenuptial agreement or other domestic contract and need assistance in enforcing or setting aside that contract? Contact Feldstein Family Law Group P.C. today at (905) 581-7222!