People come together in marriage out of love and a desire to show their commitment to one another, but most realize that not all such unions last. It is therefore wise to safeguard their assets and interests with prenuptial and cohabitation agreements.
While couples obviously anticipate remaining together, these legal documents provide clarity and protection in the event their relationship breaks down. Drafting these agreements requires both parties to consider several factors to ensure that their agreement is fair and effective.
Prenuptial and cohabitation Agreements in BC:
1. Full Financial Disclosure
When drafting a prenuptial or cohabitation agreement, transparency is vital. Both parties should be open and honest about their financial assets, liabilities, and income. This can include investments, real estate, businesses, debts, and more. Each party will be aware of what they are bringing to their union.
2. Define Separate and Marital Property
Although many couples will take a “what’s mine is yours and what’s yours is mine” approach at the start of their relationship, they will likely have changed their minds by the end. It’s therefore important to clearly define what constitutes separate and marital property in the agreement. Separate property generally includes assets owned before the relationship, gifts, inheritances, and assets acquired after the breakdown of the relationship, while marital property includes those assets acquired during the relationship.
3. Alimony or Spousal Support
The issue of spousal support should be addressed in your agreement. BC family law governs spousal support entitlements, but couples can still discuss the terms and consult with a family law lawyer for guidance on what is fair and enforceable.
4. Property Division
Use your agreement to outline how property will be divided in the event of separation or divorce. In BC, assets acquired during a relationship are typically divided equally, but couples can use these agreements to specify the division of assets including personal belongings, pensions, real estate and more, to avoid conflicts that could arise later.
5. Debt Allocation
Work out the allocation of debts in the agreement. In the same way that assets must be divided, so too must debts that are incurred during the relationship. This will include credit card debt, mortgages, loans, and any other financial obligations. The agreement should clearly indicate the responsibilities of each party for existing debts, as well as any future ones during the relationship.
6. Estate Planning Considerations
Estate planning considerations should be incorporated into the agreement. Although prenuptial and cohabitation agreements are typically focused on financial affairs, you may also wish to address estate planning issues. This can include inheritances, wills, and the designation of beneficiaries, giving clarity that might prevent disputes in the event of incapacitation or death.
7. Review and Update Regularly
Be sure to review and update your agreement on a regular basis, as circumstances change and evolve in your relationship. Career changes or advancements, marriage, the arrival of children, or changes in financial status may require a revision of the agreement. With periodical review, you can ensure that your agreement remains relevant and appropriate to your current situation.
8. Independent Legal Advice
Always seek independent advice before you proceed with signing the agreement. Both partners should have their own lawyer review documents to protect their interests and ensure that the agreement is as fair as possible. The lawyers provide insight and advice, negotiate on behalf of their client if necessary, and ensure that both parties fully understand the implications of the agreement.
9. Consideration of Future Contingencies
Although we never know what the future holds, we can attempt to make some contingencies by addressing such possibilities as relocation, career changes, injury or disability, and other unforeseen circumstances that could impact your financial situation and relationship. Anticipating every possibility is far beyond the scope of any agreement, but discussing more likely scenarios can help in the creation of a more comprehensive agreement.
10. Compliance with BC Family Law
As mentioned above, you should be seeking legal advice when drafting your agreement. This will ensure that you are in compliance with all legal requirements outlined in the BC Family Law Act. Some of the considerations to be reviewed are fairness, voluntariness, and the absence of coercion.
There are other legal standards that may need review to ensure that your agreement is enforceable. You also need to be aware of anything that may be superseded by other regulations. Consulting a family law lawyer will help you navigate potential issues and fully understand what you can and cannot control with your agreement.
No couple enjoys contemplating potential breakups, but creating a prenuptial or cohabitation agreement will provide you security in the event that things don’t proceed as hoped.
Understanding the intricacies of Prenuptial and Cohabitation Agreements in BC is essential for couples looking to safeguard their future together. Whether you’re seeking comprehensive advice or need assistance drafting your agreement, Hillside Law offers the expertise you require. Learn more about our dedicated team and approach to legal services by visiting our About Us page. For more information on our wide range of legal services and how we can support your needs, explore our Practice Areas. At Hillside Law, we are committed to providing the guidance and support you need for drafting Prenuptial and Cohabitation Agreements in BC, ensuring your interests are protected for the future.
If you are located in British Columbia, Hillside Law can help you draft a prenuptial or cohabitation agreement to help protect your best interests. Contact us today for more information or to get the process started.
