Postnuptial Agreement Lawyer
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What is a Postnuptial Agreement?
A postnuptial agreement, or postnup, is a contract spouses create after marriage. It outlines which assets belong to each person in the event of a divorce.
In addition to assigning property to each party for easier division in the event of a divorce, postnuptial agreements address additional matters, including:
- Determining what to do with the marital property if one spouse dies. That is a critical aspect of a postnup because one spouse might decide to waive their rights to the property they would inherit under normal circumstances.
- Establish various terms in case of separation. Proactively negotiating divorce terms can prevent timely and costly divorce proceedings in the future if it comes to that.
- Decide on each spouse’s future rights if the marriage ends, including waiving or limiting spousal support post-separation. It is important that both sides have equal earning capacity and there is no compensatory claim.
M & Co. Law Firm understands how overwhelming it can be to navigate the complexities of divorce proceedings if you’re not prepared. Our Toronto divorce lawyers can evaluate your assets, finances, and debts to advise you about how a post nup might meet your needs.
Difference Between Prenup and Postnuptial Agreement
The primary difference between a prenup and a postnup is the timing of when a couple signs the agreement. A couple creates a prenup before getting married. Creating a postnup occurs during the marriage. Both contracts are legally binding and enforceable under the law.
Two people enter into a prenuptial agreement before they marry to outline various rights and responsibilities regarding their assets and finances. A postnuptial agreement is a contract a married couple drafts to clarify the ownership and treatment of assets, income, individual inheritances, marital duties, and other matters. It can be signed at any time during a marriage. It could be one day post marriage or it could be 30 years into the marriage.
Postnup discussions could at any time before separation. Often times these discussions occur because one partner’s business venture requires one. However, the reality is that a postnuptial agreement can be beneficial during any stage of marriage for numerous reasons.
Legal Status of Postnups
A postnuptial agreement isn’t enforceable unless it is in writing and each party signs it before witnesses. The court can void the contract if either spouse signs under coercion or duress. The agreement also cannot be unconscionable.
Courts treat postnups with caution. You obtain certain family law rights and obligations to and from your spouse when you marry. At least one person may surrender some legal rights in a postnup. The court must carefully examine the circumstances of the postnup to determine its validity. It is important that a postnup agreement be fair to both sides.
When Is It Advisable to Use Postnuptial Agreements?
You can create a postnup any time after marrying your spouse. Discussing financial matters and agreeing to divorce terms in case something happens is the best way to protect yourself.
A postnuptial agreement benefits couples with unequal income, high-value assets, significant debt, or business interests. It’s also a good idea if one spouse has children from a prior marriage. However, establishing asset and debt ownership is crucial for anyone in a marriage, even if you or your spouse has limited property.
The most common reasons you should consider a postnup includes:
- Protect your inheritance – You can determine how and if you should split an inheritance you or your spouse receives. Typically, inheritances aren’t marital property. However, if the money commingles with marital property, each spouse might have rights. A legally valid postnup can override one spouse’s claims for ownership over the inheritance the other receives.
- Allocate debts and liabilities – Marrying someone with significant debts can ruin your financial standing, especially after divorce. Divorced couples must also divide debts and A postnup can help if you don’t want to take on your spouse’s obligations if the marriage ends.
- Divide business interests – Determining the value of each spouse’s shares in a business can be challenging. With a postnuptial agreement, you eliminate the headache of calculating your separate interests to divide everything equally. If only one person owns the business, a postnup can establish their sole ownership if they divorce.
How Will a Postnuptial Agreement Affect Matrimonial Home?
A well-prepared postnuptial agreement can address ownership of the matrimonial home. You might decide only one of you owns the home and retains that ownership after divorce. You may also want to get a credit for amounts you invested in the matrimonial home by way of down payment.
However, a postnup can only affect rights to marital home ownership. Possession rights to the matrimonial home cannot be waived in a postnup. Possession rights are rights each spouse has to live in the matrimonial home. Neither person can kick the other out, even if one person owns the home entirely on their own. Both parties have the right to live in the matrimonial home until the home is sold or until a court grants one spouse or the other an order of exclusive possession.
Alienation refers to the requirement that each spouse must agree to sell the matrimonial home before the sale can occur. Married couples can’t waive these rights by establishing a postnuptial agreement. One person can’t place the home on the market if the other isn’t interested in selling. It must be a joint decision.
How a Postnup Can Protect You
Postnuptial agreements allow married couples to claim assets that will be theirs in the event of a divorce. The parties can earmark assets as provision for children from a prior relationship should a divorce occur. Provisions can be made for how assets will be handled if one of the spouses dies. A postnup can provide these protections when the parties structure their assets for their greatest benefit.
Do You Need a Will if You Have a Postnup?
Yes. Estate planning is essential whether or not you have a postnuptial agreement. If the marriage ends because one spouse dies, a will determines how to distribute the deceased’s assets to the surviving spouse and others.
A postnuptial agreement can support each spouse’s estate plan by outlining terms, such as:
- How long the surviving spouse can live in the matrimonial home
- Whether the surviving spouse can contest the deceased spouse’s will
- Specific assets the surviving spouse will receive if the other spouse dies
- Whether the couple must not amend their wills during the marriage
- Whether the spouses release each other from estate law obligations
You should create a postnuptial agreement if the plan is to leave significant assets to anyone besides your spouse. The terms you incorporate must align with the wishes and instructions you and your spouse include in your wills. Any discrepancies can create disagreements within the family, especially if you leave property to children from a previous marriage or use conflicting terms and language. Someone might file a lawsuit to challenge the validity of the will
What Are the Legal Concerns Regarding Postnuptial Agreements?
Spouses gain particular family law rights and obligations on the marriage date. Signing a prenup or postnuptial agreement means it’s likely that at least one of you will give up some legal rights. However, just because you are giving up legal rights does not mean the agreement is one sided or unfair. In fact many couples prefer to decide how their assets will be shared in the event of separation and not leave it to a judge to decide.
Although there isn’t necessarily anything wrong with relinquishing certain family law rights, working with an experienced lawyer to ensure the contract protects you is crucial. Every aspect of the postnup must be fair to each spouse. The key is to create an agreement that does not leave one side with a windfall and the other destitute.
Signing the agreement without considering your interests and future needs is reckless. If the marriage ends, the contract might not protect you the way you deserve. It could safeguard your spouse’s rights over yours or dictate an uneven distribution of assets.
Even if your marriage is solid, you shouldn’t establish a postnup without hiring your own lawyer to guide you through the process and review every term.
How Our Postnuptial Agreement Lawyer Can Help
Postnuptial agreements can benefit anyone’s marriage. They help resolve disputes before they arise and simplify the negotiation process in the event either spouse decides to file for divorce. Considering your options and preserving your rights is vital regardless of the status of your relationship. You might think you’ll never get divorced, but you can’t predict the future.
A lawyer experienced in postnuptial agreements from Musson Law knows the laws governing postnups and how to comply with them to draft a legally enforceable contract. We will review your financial situation and determine the best method of protecting you if you get divorced, or your spouse dies. You shouldn’t depend on a template you find online. Without legal counsel, you risk surrendering your rights and interests.
Call M & Co. Law Firm at 416.862.0980 to discuss your postnuptial agreement with us.