A prenuptial agreement is usually not something couples want to talk about. Despite the idea that it is a seemingly unromantic concept, the reality is a prenuptial agreement can save a tremendous amount of time, energy, finances, and stress should a separation occur down the road.
You insure your car, your home, along with other valuable assets and a prenuptial agreement is essentially no different. Before deciding if this is the right decision for your relationship, there are a few things to consider.
It is generally viewed as best to discuss a prenuptial agreement with your partner and have it prepared some time before moving into a cohabitating or marriage-like relationship as prenuptial agreements are only valid if signed before you are married. Each partner should seek their own counsel, ideally from someone who practices family law, as business or estate planning lawyers may miss the finer nuances involved in a prenuptial agreement.
Before you decide to move forward, here are the pros and cons of signing a prenuptial agreement.
Cons of a Prenuptial Agreement
Talking about preparing for a separation when you’re making future plans with the person you love can seem strange. It raises questions of trust and authenticity. It is often a difficult conversation to approach and may lead to conflict if both parties can’t see eye to eye.
An agreement may favour one party over the other
While prenuptial agreements can’t be completely one-sided, it is possible for them to favour one party over the other in terms of how assets, estates, debts, etc. are divided. While both parties would agree to these conditions beforehand, one party may receive less than an even split.
The prenuptial agreement may be overruled by a judge
If one party has significantly more finances or assets than the other, and an agreement is signed where that party is noticeably favoured, then a judge has the ability to set aside the agreement and would typically award a 50/50 split.
This usually only happens when there is significant unfairness, however, a judge may also choose to uphold the agreement if both parties were found to have received sound legal advice when the agreement was made.
Pros of a Prenuptial Agreement
Protection of both parties
A prenuptial agreement will determine how property, assets, debt, child and spousal support will be directed following a separation. With this information established, both parties will usually have their finances and assets secure in a way that is mutually beneficial and agreeable.
Peace of mind
Knowing that should anything go wrong down the road a guideline exists to protect both parties and to help navigate through an already stressful time, can offer some quality peace of mind. This can then allow you to focus on your relationship and all the reasons you’re taking the next steps for a more long-term commitment, instead of worrying about the uncertainty of the future.
Lower financial costs
Legal fees post-separation, without a prenuptial agreement, can go well into the tens of thousands due to drawn-out legal proceedings, however, most prenuptial agreements are between $2,500-$10,000 depending on their complexity.
A roadmap to help in navigating a difficult time
With everything set out in a prenuptial agreement, you generally won’t encounter any surprises along the way and this helps aid in a smoother transition during an already difficult time.
At the end of the day, a prenuptial agreement can be a smart investment for everyone involved. While it may be difficult to approach at first, it ensures protection and agreeance for both parties and any children involved, especially when completed properly.
If you think a prenuptial agreement might be the right choice for you or you’d like to learn more, speak with our family law specialists. Family lawyers are the most qualified to construct an agreement that offers peace of mind so you can focus on what’s most important: your relationship.