Prenuptial Agreements
What is a Prenup?
The term “prenup” is just an abbreviation of “prenuptial agreement”, which is an agreement you make prior to your “nuptials”, i.e. before you get married.
In the Ontario Family Law Act, a prenup is technically called a “marriage contract” and is defined as “an agreement under section 52 of the Act. Section 52 says:
52. (1) Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,
(a) ownership in or division of property;
(b) support obligations;
(c) the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and
(d) any other matter in the settlement of their affairs.
Closely related to marriage contracts, but not quite the same thing, are “cohabitation agreements”, which are defined as “agreements under section 53” of the Act. Section 53 says:
53. (1) Two persons who are cohabiting or intend to cohabit and who are not married to each other may enter into an agreement in which they agree on their respective rights and obligations during cohabitation, or on ceasing to cohabit or on death, including,
(a) ownership in or division of property;
(b) support obligations;
(c) the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and
(d) any other matter in the settlement of their affairs.
You will probably notice that these two sections are essentially the same, except one type of agreement applies to people who are, or are going to get married, and the other applies to people who are not married, but are living together.
Technically speaking, a cohabitation agreement is not automatically a marriage contract or a “prenup” because it might not say anything about what happens if the parties who sign it get married. Obviously though, some people live together without a concrete plan to get married, but then later do get married. For that reason, lawyers often draft agreements that are cohabitation agreements but will become marriage contracts if they parties get married later. So we often call cohabitation agreements “prenups” too, even though they are not technically identical in Ontario.
Also, you can see from the definitions that either a marriage contract or a cohabitation agreement can be entered into before or after you get married or start living together.
Both marriage contracts and cohabitation agreements in Ontario are examples of a category of agreements called “domestic contracts”. (The other major types of domestic contracts are “separation agreements”, “family arbitration agreements”, and “paternity agreements”.) An entire part of the Family Law Act (Part IV) is dedicated to domestic contracts.
Like any domestic contracts in Ontario, marriage contracts or cohabitation agreements must:
- be in writing,
- be signed by both parties, and
- be witnessed.
If your marriage contract or cohabitation agreement meets those requirements, then you will generally be expected to abide by it.
There are exceptions to that rule, though.
In Ontario, as in other provinces, if a person does not want to be bound anymore by a marriage contract or cohabitation agreement, he or she can ask the other party that signed the agreement to change it. If the other person agrees to the change(s), no problem, you can change it and move on.
Any changes must also be in writing, signed by both parties, and witnessed, though, just like the original agreement. And if you have filed the agreement with anyone, like a court or the FRO, then you will need to file the update with them too.
If the other party won’t agree to change or throw out the agreement, you can ask a court to change or set aside any part of an agreement, or the whole thing, and make an order different than what the agreement says you must do or not do.
In Ontario, there are limited reasons that a judge is allowed to set aside parts or all of an agreement. Whether a judge can do so depends on the parts of the agreement you want changed.
There are certain things that an Ontario court can always set aside if someone asks them to and if the court feels it should do so. These include clauses “respecting the education, moral training or custody of or access to a child” if the court thinks the clauses are not in the best interests of the child. As always in family law, the best interests of children are the primary concern of the courts.
Provisions for child support can also be thrown out any time the court finds them to be “unreasonable having regard to the child support guidelines.” That typically means they vary too far from the tables in the Child Support Guidelines.
Also, no provision in a domestic contract is enforceable at all if it is tied to a condition that someone must remain “chaste” after separation. So you cannot tell your spouse he or she gets spousal support only if he or she refrains from sleeping around.
For everything else, people should generally be able to make whatever agreements they want, and courts will generally uphold the parties’ intentions when they signed the agreement.
Note, however, that section 56(4) of the Family Law Act says a court can still set aside parts or all of domestic contracts if:
(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
(b) if a party did not understand the nature or consequences of the domestic contract; or
(c) otherwise in accordance with the law of contract.
So you can’t lie (or hide, or even fail to disclose, the truth about) your finances, or your marriage contract or cohabitation agreement may be worthless. Seriously. Don’t try to trick your spouse.
Additionally, lawyers usually strongly encourage both parties to get independent legal advice before signing any domestic contract, prenup or otherwise. We do this to avoid the second issue above by making sure that both parties understand the “nature and consequences” of the agreement.
If you have questions about whether the other “laws of contract” may allow you to get out of a marriage contract or cohabitation agreement, you need to talk to a lawyer.
In addition to the general rules above, in Ontario, section 33(4) of the Family Law Act also gives courts power to set aside parts of a domestic agreement relating to support (either spousal support or child support) if:
(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;
(b) if the provision for support is in favour of or the waiver is by or on behalf of a dependant who qualifies for an allowance for support out of public money; or
(c) if there is default in the payment of support under the contract at the time the application is made.
Again, if you want to know if an agreement you signed or are thinking of signing may “result in unconscionable circumstances”, you should talk to a lawyer.
In BC, things are somewhat different.
In BC, the old Family Relations Act had similar definitions and rules about prenups as the current Family Law Act in Ontario. The new Family Law Act in BC, however, took out an important detail: In BC now, the law no longer requires that family law agreements (including prenups) be “in writing”.
They do not need to be “witnessed” either, for the obvious reason that if they are not in writing, there is nowhere for the person “witnessing” the agreement to sign it. Still, though, it is a very good idea to have a “witness” to any agreement you make, just in case you later disagree about what exactly the agreement was. (It’s even better to make sure you put it in writing, and have a lawyer draft it for you.)
This gets a bit weird, because in BC the Family Law Act allows agreements to be set aside but, where the agreement is about property division or spousal support, apparently only if the agreement is “in writing”. (More on that below.) It would be absurd if an agreement in writing can be set aside but a verbal agreement cannot, so presumably the Family Law Act only points out the “in writing” issue because courts are generally going to be quick to change verbal agreements anyway if they feel like it.
The law in BC still recognizes, and in fact emphasizes, the importance of family law agreements (including prenups), but it no longer applies its rules only to written agreements. And almost all lawyers in BC still urge people to put their agreements in writing (and have them witnessed), because fighting in court later about what you did or didn’t agree to is a waste of time and money and will usually make both parties miserable.
Otherwise, agreements in BC are essentially the same as in Ontario, and the comments above apply equally.
As I said above, some agreements in BC can be set aside if they are “written agreements”. Property agreements, for example, can be set aside on the following conditions:
93 (1) This section applies if spouses have a written agreement respecting division of property and debt, with the signature of each spouse witnessed by at least one other person.
(2) For the purposes of subsection (1), the same person may witness each signature.
(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:
(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
(b) a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
(c) a spouse did not understand the nature or consequences of the agreement;
(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.
(4) The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is substantially different from the terms set out in the agreement.
(5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:
(a) the length of time that has passed since the agreement was made;
(b) the intention of the spouses, in making the agreement, to achieve certainty;
(c) the degree to which the spouses relied on the terms of the agreement.
(6) Despite subsection (1), the Supreme Court may apply this section to an unwitnessed written agreement if the court is satisfied it would be appropriate to do so in all of the circumstances.
So basically the same as in Ontario. Note, by the way, agreements about pension division can also be set aside, just like any other property agreements, by virtue of section 127.
Spousal support agreements are the other type of agreement (or parts of an agreement) that the Family Law Act says a court can set aside if they are “written agreements”.
164 (1) This section applies if spouses have a written agreement respecting spousal support, with the signature of each spouse witnessed by at least one person.
(2) For the purposes of subsection (1), the same person may witness each signature.
(3) On application by a spouse, the court may set aside or replace with an order made under this Division all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:
(a) a spouse failed to disclose income, significant property or debts, or other information relevant to the negotiation of the agreement;
(b) a spouse took improper advantage of the other spouse’s vulnerability, including the other party’s ignorance, need or distress;
(c) a spouse did not understand the nature or consequences of the agreement;
(d) other circumstances that would under the common law cause all or part of a contract to be voidable.
(4) The court may decline to act under subsection (3) if, on consideration of all of the evidence, the court would not replace the agreement with an order that is substantially different from that set out in the agreement.
(5) Despite subsection (3), the court may set aside or replace with an order made under this Division all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:
(a) the length of time that has passed since the agreement was made;
(b) any changes, since the agreement was made, in the condition, means, needs or other circumstances of a spouse;
(c) the intention of the spouses, in making the agreement, to achieve certainty;
(d) the degree to which the spouses relied on the terms of the agreement;
(e) the degree to which the agreement meets the objectives set out in section 161 [objectives of spousal support].
(6) Despite subsection (1), the court may apply this section to an unwitnessed written agreement if the court is satisfied it would be appropriate to do so in all of the circumstances.
Again, this is similar to Ontario’s law. Here, instead of the support agreement being “unconscionable”, the Family Law Act says judges can set aside support agreements if they are “significantly unfair” when considering the issues above.
Which is harder to prove: “unconscionable circumstances” or “significantly unfair” circumstances? If you need answer to that question, you should talk to a lawyer.
Child support agreements can always be changed too. Section 148 says:
(3) On application by a party, the court may set aside or replace with an order made under this Division all or part of an agreement respecting child support if the court would make a different order on consideration of the matters set out in section 150 [determining child support].
Section 150 basically just say the courts must use the Child Support Guidelines. Just like in Ontario, people generally cannot contract out of child support in any significant way, at least not usually in an enforceable way.
Finally, regarding parenting time agreements, section 44 says:
(4) On application by a party, the court must set aside or replace with an order made under this Division all or part of an agreement respecting parenting arrangements if satisfied that the agreement is not in the best interests of the child.
Prenups are sometimes simple, sometimes complex, but they are always important. If you are thinking of entering into one, whether you’re having it drafted or are being asked to sign one, please talk to a family law lawyer first.