A prenuptial agreement in Canada is an agreement between two people before they marry. Couples seeking more assurance on their assets, marital properties, and belongings in time of separation go into a prenup contract.
As lawyers, we always advise couples, particularly those with substantial assets, to have a properly structured prenuptial agreement to safeguard their financial interests in a divorce.
However, there are situations when a spouse who accepted the prenuptial agreement and now seeks a divorce can have legitimate reasons to have it cancelled.
We’ll go over some 5 common reasons that can make a prenup invalid in Canada.
What Does Prenup Agreement Mean?
A prenuptial agreement is a sort of premarital contract that is entered into before the wedding. This agreement allows spouses to guard their assets if the marriage results in a disaster in the future.
Prenuptial agreements have grown increasingly prevalent among spouses who have amassed a considerable fortune or specified assets before marrying.
5 Reasons that Makes a Prenup Invalid in Canada
Prenups were thought to be difficult to invalidate until recently. However, just because a prenuptial agreement exists today does not ensure that a court will recognize it. They can be declared invalid on both procedural and substantive grounds.
The following are the 5 most common scenarios where a prenup can be declared invalid:
1. Fraudulent agreement
Each spouse must disclose all of his or her assets in a prenuptial agreement. When a couple gets divorced, it’s typical for the spouse to undervalue assets or refuse to reveal them at all, preventing these assets from being included in the settlement.
If you can show that your husband did not completely disclose his earnings when you signed the prenup, you may be able to have it evoked. The same goes for the other spouse.
2. Signed under duress
Coercion or duress can be quite hard to prove in court. Different states have varying criteria for what it means to be coerced into an agreement, as with many elements of divorce law.
But similarly, if you can show that you didn’t have the mental capacity to understand the prenuptial agreement when you signed it. For example, if you were sick or under the influence of drugs, this could be a valid ground to have it invalidated.
3. Improper paperwork
The validity of a contract depends immensely on proper paperwork. Careless errors can jeopardize a prenuptial agreement. It may also be invalidated if the original agreement was inadequately written.
4. Inadequate legal representation
Both parties should seek independent counsel for a prenuptial agreement. If your affluent fiancé or the in-laws have arranged for a document to be written up for you to sign to get married, be aware that it may not be a legally binding agreement if s/he pulls out of the marriage years later.
It’s never a smart idea to sign a deal without legal counsel. However, if you signed your prenup that way, it may be invalidated.
5. Lopsided and ridiculous propositions
Although most family court judges are uninterested in the specifics of particular contracts, some variables may cause them to raise an eyebrow.
For example, if your prenup stipulates that no child support would be paid in the case of a divorce, it will almost certainly be invalidated. Prenuptial agreements that address weight gain, hair colour, sexual intercourse frequency, and in-law visits are also unlikely to stand up in court.
A prenup can be invalid if it’s not well written. Remember that a verbal prenup is never valid in court. Moreover, the prenup agreement should be conscionable. This means that there should be no loops or limitations to the contract.
Finally, you can evoke the prenup agreement if the contract does not display full disclosure of spouse assets and earnings.
Regardless of which side of the coin you’re on — whether you’re seeking to void a prenup agreement or trying to formulate one that can’t be voided — it’s crucial to get advice from experts who can help you navigate this situation. Experienced lawyers can help you plan for a safe financial future after the divorce.
In summary, for a prenup to be effective, both parties must have a separate lawyer.