What makes a cohabitation or prenuptial agreement legally valid?
For a cohabitation or prenuptial agreement to be legally valid, several key conditions must be met:
- Full Disclosure - both parties must fully disclose their financial assets and liabilities. If one of the parties fails to disclose significant property or debts, or any other information relevant to the negotiation of the agreement, that agreement could be at risk of being replaced or set aside.
- Independent Legal Advice – each party should seek independent legal advice to ensure they understand their rights, the terms of the agreement and any resulting obligations. If you do receive independent legal advice upon the execution of your cohabitation or prenuptial agreement, the lawyer will also need to execute a certificate of independent legal advice that can then be affixed to your agreement as proof that you have received that advice.
In Alberta, a certificate of independent legal advice is critical to ensure the formal requirements of a prenuptial or cohabitation agreement have been met as set out in the Alberta Family Property Act.
In British Columbia, independent legal advice is not legislated with respect to domestic contracts – including cohabitation and prenuptial agreements. However, not having a certificate of independent legal advice could make you vulnerable if a party seek court order to overturn or set aside the agreement. Therefore, a certificate of independent legal advice is a legal necessity when entering into a domestic contract in British Columbia
- Freely Entered - the agreement must be entered into freely and voluntarily, without any coercion or undue influence. Your cohabitation or prenuptial agreement can be at risk of being overturned or set aside if there is any evidence to suggest that a party took improper advantage of the other’s vulnerability – including the other spouse’s ignorance, need, or distress. The agreement will likely also contain terminology surrounding the voluntary nature of signing, including both parties acknowledging that no such undue influence or coercion has occurred.
- Compliance with Laws - the agreement should comply with existing laws in the jurisdiction where it's executed. If the terms of your cohabitation or prenuptial agreement do not comply with existing laws, then the agreement is not wholly enforceable and is at risk of being overturned or set aside.
In Alberta, the formal requirements for an agreement are set out in section 38 the Family Property Act, but it is essential to attend with a lawyer in your jurisdiction to discuss other legal requirements to ensure an agreement’s strength.
In British Columbia, the formal requirements for an agreement are set out in section 93(3) of the Family Law Act, but it is essential to consult a lawyer to ensure an agreement is procedurally and substantially fair.
- Proper Execution - to be legally sound, the agreement must be properly executed. This means it should be in writing and each spouse should sign it independently of the other. In addition, it's important for each party to have their signature witnessed by an independent lawyer. In British Columbia, the law allows for an alternative and an adult who is not a party to the agreement may also serve as a witness.
It is important to consult with a qualified family lawyer when drafting or entering into such an agreement to ensure that it meets these criteria and serves your interests effectively.