Can prenuptial or cohabitation agreements influence how assets are divided?
Prenuptial or cohabitation agreements can have a significant impact on how assets and debts are divided in the event of a separation or divorce. These agreements are legal contracts entered into by a couple before marriage or cohabitation, outlining how their assets and debts will be distributed should the relationship end.
In British Columbia
In BC, such agreements are governed by the BC Family Law Act. Courts usually uphold these agreements so long as they are fair, entered into freely without undue pressure, and both parties had independent legal advice at the time of signing.
In Alberta, prenuptial and cohabitation agreements fall under the Family Property Act and similar principles apply. For the agreement to be enforceable, both parties should have received independent legal advice, and the contract must have been entered into without coercion or misrepresentation.
- Disclosure - for the agreement to be enforceable, both parties must have provided complete financial disclosure at the time the contract was established. Alternatively, the agreement can include a specific clause stating that both parties have knowingly chosen to proceed without full financial disclosure; however, it will be important to include a certificate of independent legal advice confirming that each party has received legal advice and has chosen to enter the agreement, even in the absence of complete financial disclosure.
- Changes in Circumstances - courts may consider significant changes in circumstances (like having children) when deciding whether to uphold an agreement.
- Legal Review - to ensure enforceability, it’s advisable to have the agreement reviewed periodically, especially after major life events.
In summary, prenuptial or cohabitation agreements can indeed influence the division of assets and debts, but their enforceability can depend on various factors like fairness, full disclosure, and changes in circumstances. Always consult a family lawyer to assess the validity and implications of such agreements.