Prenuptial (Premarital) Agreements/Interspousal Contracts

Are you planning on getting married?  If so, consider a prenuptial agreement as part of your wedding plans. A prenuptial agreement is an agreement between prospective spouses made in contemplation of marriage and is to be effective upon marriage.   Some people feel that prenuptial agreements are unromantic – a sign of distrust, not love.  Drawing up a prenuptial agreement together is a sign of incredible trust and financial openness.  You are fooling yourself if you think you can achieve complete intimacy without it.

What happens, legally, when you get married? 

Ø      The Family Property Act states that any property acquired during the marriage is “owned” by both spouses, no matter who acquired it or who holds title to it.

Ø      The Homesteads Act gives each spouse a financial interest and a life estate in the couples’ home, independent of who holds title to the property.

Ø      Your will becomes void unless it states that you made it in contemplation of your marriage.

Ø      The Intestate Succession Act provides for transfer of the estate of a deceased spouse if there is no will.  Children from a prior relationship inherit, at most, one-quarter of the estate.  If the estate is $50,000 or less, those children inherit nothing.

Ø      Various pensions may force a division of one spouse’s pension with the other spouse.

What may be involved in a prenuptial agreement?

Most couples enter into these agreements to fix their rights to property owned by each, both before and during the marriage. Before you talk to a lawyer, discuss what you want to include in

the prenuptial agreement.  Each of you should have your own lawyer. Be honest – concealment of any asset or debt can invalidate your prenuptial agreement.

Ø      Do you have assets? How do you want to share them with your spouse, whether acquired before or after the marriage?

Ø      Do you have property which you wish to "keep in the family", such as a farm or cottage?

Ø      Do you own a business? How do you want to share it with your spouse?

Ø      Do you have children, or other dependants, from a previous relationship? Do you want them to inherit from you?

Ø      Do you have family heirlooms that are important to you and to your ancestors?

Ø      The disposition of property upon separation, marital dissolution, or death.

Ø      The modification or elimination of spousal support.  (Note that prenuptial agreements may not affect the right of either party to receive child support.)

Ø      The rights of either party under a will or trust created by the other party.

Ø      The ownership rights in and disposition of the death benefit from a life insurance policy.

If you are living with a partner without being officially married, you should sign a cohabitation agreement.