What Is a Prenuptial Agreement and Should You Get One?

A prenuptial agreement, commonly referred to as a “prenup,” is often viewed as a legal tool only for the wealthy or those anticipating a divorce. In reality, it is a practical document that can offer peace of mind, financial clarity, and long-term security to couples entering into marriage. In Ontario, prenuptial agreements are legally known as marriage contracts and are governed by the Family Law Act. This article explains what prenups are, how they work, and why you might consider one before walking down the aisle.

What Is a Prenup?

A prenuptial agreement is a written contract that two individuals enter into before marriage and defines how property, finances, and other matters will be dealt with during the marriage and in the event of a separation, divorce, or death. Ontario law formally recognizes prenuptial agreements as marriage contracts, pursuant to Section 52 of the Family Law Act. This document outlines each partner’s rights and obligations with regards to property ownership, spousal support, debt responsibility, and more.

What Can Be Included in a Prenup?

Marriage contracts in Ontario cover a wide range of topics, including:

• Division of property (rights to the matrimonial home excepted);
• Spousal support arrangements;
• Management of debts;
• Ownership and control of a business;
• Financial obligations during the marriage;
• Distribution of inheritances or gifts.

While a marriage contract can include the parents’ decisions on the education and moral training of their children, it cannot determine child custody or child support, as these matters are governed by the best interests of the child at the time of separation.

Are Prenuptial Agreements Enforceable in Ontario?

Yes, prenuptial agreements are enforceable in Ontario, provided they meet certain legal requirements:

• The agreement must be in writing and signed by both parties.
• Each party must sign in front of a witness.
• There must be full and frank financial disclosure.
• Both parties should obtain independent legal advice (ILA).

Courts may set aside a prenup if it was signed under duress, if one party failed to disclose assets, or if the terms are grossly unfair (also called unconscionable). A well-drafted agreement with legal guidance from the outset is essential to prevent this.

Common Misconceptions About Prenups

There are several myths surrounding prenuptial agreements. Here are a few we frequently encounter at Nihang Law:

Misconception: “A prenup means I don’t trust my partner.”

Our response: In fact, a prenup encourages open communication and financial transparency.

Misconception: “Only wealthy people need prenups.”

Our response: Anyone with property, debt, or future financial expectations can benefit from one.

Misconception: “It increases the chance of divorce.”

Our response: There is no evidence to support this. Rather, prenups often reduce conflict if a relationship breaks down.

Misconception: “We don’t have anything to protect.”

Our response: Even modest assets or future business income can be protected through a prenup.

Who Should Consider Getting a Prenup?

A prenuptial agreement may be especially useful for:

• Entrepreneurs or professionals with significant assets
• Individuals entering second marriages or with children from a previous relationship
• People expecting future inheritances
• Couples with uneven financial positions
• Anyone who wishes to define their financial responsibilities clearly

If any of the above applies to you, a prenup could serve as a proactive legal safeguard.

Process of Getting a Prenup

Creating a prenuptial agreement in Ontario is a structured legal process that ensures clarity, fairness, and enforceability. Below is a step-by-step breakdown of how it typically works:

Step 1: Initial Consultation with a Family Lawyer

The first step is to schedule a consultation with a
qualified family law lawyer, where you will discuss your relationship context,
financial situation, and legal objectives. Your lawyer will explain what
prenuptial agreements can and cannot cover under Ontario’s Family Law
Act. Whether you intend to protect a business, exclude certain assets, or set
limits on spousal support, consulting with your lawyer will help shape your
priorities and tailor the agreement to your situation.

Step 2: Full Financial Disclosure

Both parties are legally required to completely and truthfully disclose their financial situations. This includes all assets (e.g., real estate, investments, vehicles), liabilities (e.g., student loans or mortgages), income sources, and any expected inheritances. This transparency is critical to the agreement’s validity. Courts in Ontario have set aside agreements where one party concealed or failed to disclose key financial details, as this undermines the fairness of the contract. Full disclosure allows each party to make an informed decision and minimizes the risk of future challenges.

Step 3: Drafting the Agreement

After disclosure, your lawyer will draft the agreement based on your instructions. A prenuptial agreement may outline how property will be divided upon separation, how spousal support will be handled, who is responsible for specific debts, and whether any jointly acquired assets will be shared. If one party owns a business or brings significant assets into the marriage, the agreement can address how those will be protected. The drafting phase often involves back-and-forth revisions between lawyers to ensure both parties are comfortable with the final terms.

Step 4: Independent Legal Advice (ILA)

Each party must obtain their own independent legal advice (ILA) from a separate lawyer. This step ensures that both individuals fully understand the contents and consequences of the agreement and that neither party was pressured into signing. Independent legal advice is a key factor that courts consider when deciding whether a prenuptial agreement is valid. If one party did not receive ILA, the agreement may later be challenged on the basis of unfairness or lack of informed consent.

Step 5: Signing and Witnessing the Agreement

Once both parties are satisfied and have received legal advice, the agreement must be signed. Ontario law requires the prenup to be in writing, signed voluntarily by both parties, and witnessed by a third party who is not involved in the agreement. This formal process helps ensure that the agreement is binding and enforceable. It is also advisable that each party—and their respective lawyers—retain a copy of the executed agreement for future reference.

Step 6: Optional Review and Updates

Though it isn’t mandatory, it is a good idea to periodically review the agreement, especially after major life changes such as the birth of a child, significant shifts in income or assets, or changes in estate planning. An outdated prenup may no longer reflect your current intentions or legal reality. Revisiting the agreement ensures it remains relevant and legally sound over time.

By following this structured approach, couples can enter marriage with clarity and confidence. The process encourages transparency, minimizes future conflict, and ensures both parties’ rights are protected within the bounds of Ontario law.

What Happens Without a Prenup?

Without a prenuptial agreement, Ontario’s default family law rules apply:

1. Property is equalized between spouses regardless of whose name is on the title.
2. The matrimonial home is treated specially and cannot be excluded from division.
3. Spousal support may be awarded based on need, means, and the length of the relationship.

This default structure may not reflect your intentions or expectations. For example, a business you built before marriage could be subject to equalization. A prenup allows you to opt out of these provisions in a legally binding way.

Prenup vs. Cohabitation Agreement

A cohabitation agreement is similar to a prenup but is used by couples who are not married. It outlines similar terms about property, support, and responsibilities. If the couple later marries, the cohabitation agreement can automatically become a marriage contract unless stated otherwise.

Conclusion

A prenuptial agreement is not a sign of distrust, it is a sign of preparedness. It gives couples the opportunity to make important financial decisions together before marriage, potentially avoiding disputes and litigation later on. Whether you are protecting assets, clarifying expectations, or planning for the future, a prenup can offer clarity and security for both parties.

How Nihang Law Can Help

At Nihang Law, we understand that discussing a prenup can be delicate. We approach each case with discretion, clarity, and respect. Whether you’re considering a marriage contract or need legal advice on how to protect your assets, we are here to help draft, review, and negotiate agreements that meet your needs. Contact us today to book your appointment for a confidential consultation.