Tips for Writing a Pre-Nuptial Agreement

Preparing for the end before barely having a beginning is the forethought that puts many couples at odd when considering a prenuptial agreement. However, managing marital state of affairs prior to marriage can bring clarity in a relationship. Protecting personal property or significant assets is a precaution and in no way determines the direct outcome of the relationship.  If you are considering writing a prenuptial agreement the following tips may assist you in drafting an effective, non-threatening agreement.

A prenuptial agreement can be bilateral
A prenuptial agreement provides information about both partners. Talking about a prenup can be uncomfortable for an engaged couple. However, once the conversation commences, it does not have to be one-sided. Both parties can protect their interest even where only one party has significant assets. If one party has significant assets, the other may have personal property worth protecting.  Further still, if one party is at a burdensome disadvantage, the disadvantaged party can request to have the terms of the agreement construed to be more inclusive. When drafting the agreement, keep the needs of both parties in mind.

Distinguish Shared property and separated property
It is not uncommon for an unmarried couple to own property prior to the marriage. When drafting a prenuptial agreement, outline if and how shared and separate property will be divided.  Separate property is defined as property that a party acquired prior to the relationship or engagement, bought solely in his or her name and using his or her funds. On the other hand, shared property is property purchased during the marriage even if only one of the parties is on the title.  Generally speaking, shared assets are divided equally if a marriage ends. However, if the terms of the prenuptial agreement stipulate a different course of action, that may be sufficient for performance contrary to the equal division of matrimonial property.

Distinguish Debt
A point of contention in prenuptial agreements is managing debt acquired prior to the marriage. Separate debt is debt acquired by one party and is deemed that party’s sole responsibility.  Shared debt is debt accumulated as a couple.  In some relationships, parties may agree to take on the separate debt and construe it as a shared debt. However, it is imperative to declare how the debt will be divided if the marriage ends.

Children from previous relationships
When writing a prenuptial agreement, parties with children from previous relationships should specify the care, parental arrangement, and custody of the children in a formal manner. In many cases, couples assume that the non-biological parent will assume guardianship and become a stepparent to the children. However, some relationships are more complex and in those instances, outlining what happens to the children where a marriage ends is beneficial.

Spousal support
Outline what financial support each party can rely on should the marriage end.  Spousal support may depend on a series of factors such as the length of the marriage and the age of the parties.

Seek Independent Legal Advice
A prenuptial agreement should make both parties feel as comfortable as possible.  Both parties should seek independent legal advice once the document has been drafted to make certain that the terms of the agreement are reasonable and fair and that no individual is under duress to execute the agreement.

In addition, don’t hesitate to ask your lawyer about additional terms that you may wish to include in your agreement. For example, engaged couples sometimes include terms in relation to infidelity.  Your lawyer can help you determine which additional terms are valid and which go beyond the scope of the parties’ responsibilities.

Prenuptial agreements can birth emotional tension and distrust between an engaged couple. However, it can also bring forth peace and clarity. Don’t avoid the discussion out of fear or sign an agreement to quickly put the matter to bed. Be open, intentional and clear and it will ultimately benefit both you and your partner

How to Draft a Promissory Note

Whether you are contracting to repay a small business loan with an investor or you have purchased a home, but are unable to make the complete payment for the renovations and repairs, business and personal loans can benefit from the legally binding power of a promissory note. A promissory note is a written promise between a lender and a borrower, in which the borrower promises to pay a stated sum to the lender at a specified date or on demand, in exchange for a loan.  The adequacy of a promissory note however, largely depends on how well the document is drafted.

Preliminary, but necessary information
A promissory note is usually drafted by the lender, as he is more susceptible to risks, particularly when the borrower fails to repay the loan. When drafting a promissory note, it is pertinent to first identify the lender, the borrower, and the date the note is executed and takes effect. In some instances, the borrower’s address may be relevant for the purpose of collateral.

Loan Amount
Once the parties to the note have been identified, the lender must outline the principal amount of the loan. This is defined as the amount of money the lender intends to loan to the borrower.  The principal amount is not inclusive of any interest the lender may impose on the borrower. Further, the loan amount should be written in alphanumeric format with a currency notation to avoid any confusion.

Term
When drafting a promissory note, the lender may determine the time length of the note. This is referred to as a term. A term can range from a month to a few years and in some instances, there are no specified dates; instead, the borrower must repay the loan on demand. A demand promissory note allows the lender to demand payment, giving the borrower a few days, usually, to initiate repayment.

Interest
Not all promissory notes require the borrower to pay interest. However, should the lender want to charge interest, the note should include the interest rate the borrower can rely on, for example, an annual rate of 8% for a one-year term. In addition, the lender should specify whether the interest would be compounded. In other words, how often will the interest rate be recalculated and added to the principal amount to derive a new outstanding balance. The more frequently the interest is compounded, the greater the interest the borrower has to pay.

Payment
There are multiple ways to repay the loan outlined in a promissory note. However, rather than leaving the borrower in the dark, payment expectations should be drafted in a promissory note.  Payment options typically include a lump sum payment at the end of the term, an interest only payment, an interest and principal payment, or a specified amount. In addition, the method of payment should be verified as well (cheques, direct deposit, etc.)

When construing the payment clause, it is a good idea to also include penalty clauses at this point so the borrower is aware of the consequences for failing to pay the outstanding principal amount.

Security
Depending on the nature of the loan, a lender might include a security clause to protect his interest and ensure the loan is paid. For example:

This note is to be secured by collateral:
The security is a 2017 Mercedes Benz
The VIN of the vehicle is 00000000000

Additional Clauses
If the lender wishes to add further clauses he may do so as well, so long as the clause is not deemed objectively unreasonable. Clauses that a lender may include in a promissory note beyond the above include severability and governing law.

Finally, once the promissory note has been drafted, it should be executed before a witness or a notary public (depending on the jurisdiction).  In most cases, promissory notes are only signed by the borrower. However, should a lender wish to sign as well, he likely will not be met with any objection.

Do You Need A Cohabitation Agreement?

There are a myriad of benefits to marriage. Among some of the most obvious is the assumption that husband and wife share the same home whether both parties are listed on the title or not. The law assumes prima facie that both parties have legal rights and obligation should the marriage end due to separation, death, or otherwise. Unfortunately, unmarried couples may not have the same privileges. A cohabitation agreement is an alternative agreement between common-law couples that sets out their legal rights and obligation when the relationship ends.  An un-married couple can obtain a cohabitation agreement even after cohabiting with one another. However, it is wise to obtain an agreement prior to making significant plans in a relationship (i.e. starting a business).  Whether or not you need a cohabitation agreement is solely a decision for you and your partner to make. There is no law that makes it a mandatory requirement for unmarried couples. However, it is essential when protecting you and your partner’s interests.  If you’re unsure whether a cohabitation agreement is for you, consider the following checkpoints.

1. Clarity and Managing Expectations
A cohabitation agreement helps a common-law couple to determine who owns what at the start of the relationship. At first glance, it might seem like a very unromantic process and maybe even morbidly pessimistic.  However, the agreement puts the relationship into perspective where disagreement on financial matters is common.  When a marriage breaks down, a non-legal owner of the home may have basic legal rights as a remedy in law. However, when a common-law relationship breaks down, a non-legal owner has no claim to property in the same way that a married individual would. A cohabitation agreement facilitates managing expectations in a relationship.

2. Legally Enforceable
A cohabitation agreement is a legally enforceable document.  Consequently, parties can rely on the terms in a legal capacity should the relationship end.  Unmarried couples make verbal assertions and written agreements in the comfort of their own home pertaining to property ownership, the state of their affairs and medical incapacitation. However, where that agreement has not been accompanied by independent legal advice, it may hold no true weight.  It is not uncommon for a party to say they did not understand the terms of the agreement at the time it was executed. And on that premise, a judge may deem the agreement unreasonable. When parties obtain a cohabitation agreement, a lawyer can advise on the meanings of the terms and rely on the execution of the documents with full competency.

3. Protect Major Assets or Inheritance
If one or both partners in a common law relationship have major assets or inheritance, a cohabitation agreement is the immediate course of action to protect those interests. Major assets or inheritance may include any of the following:

  • Children from a previous relationship
  • Significant Debt
  • Owns business or property
  • Wants to specify health insurance
  • Wants to have specific guardianship over a partner should he or she be incapacitated
  • One makes a significantly larger income than the other

4. If you ultimately decide to get married
If the parties to cohabitation ultimately decide to get married and the terms of the cohabitation agreement remain the same, the agreement simply becomes a Marriage agreement or a pre-material agreement unless it is otherwise invalidated.  This demonstrates the binding power of the cohabitation agreement.

No matter how blissful you may be in a relationship, sometimes the unfortunate does occur. In those circumstances, it is wise to have a legally binding instrument to protect your assets and your mental health. Dealing with these matters once the relationship has ended may only result in a greater deal of stress.  Be proactive!

What to Include in A Separation Agreement

Ending a relationship can be a stressful process. Adding litigation to an already overwhelming process can increase tension and redirect energy into things that two partners in a relationship may not want to face. A separation agreement, or Minutes of Settlement, is an amicable alternative to a messy departure. Specifically, it is contract between the two parties of a relationship to settle the settle matters important to the parties prior to obtaining a divorce.  While it may me drafted by the parties to the agreement, both partners must seek independent legal advice and have the documents notarized and commissioned. Furthermore, once the parties decide to obtain a divorce, the Separation Agreement can be converted into a Divorce Judgment as long as the terms therein are still relevant and agreeable.

In most cases, one party may retain a lawyer to draft the Separation Agreement and have it executed Independently. However, where parties intend to draft their own agreement, there are specific terms and issues that are worth including in the document.

“The Preamble”
The first few paragraphs of a separation agreement usually provide a history of the parties’ relationship.  This will include the date of the marriage, the date of the separation, and the names and date of birth of any children who may be party to agreement. If the parties are living separately, the agreement should outline the respective city and province in which the parties reside.  For example, if one of the parties lives in British Columbia and the Other in Ontario, the agreement would state, “Jane Doe, of Toronto in the Province of Ontario”.  It is important to identify the parties’ address especially for the purpose of execution. Separation agreements require original signatures and it is likely the case that the document would travel by courier so each party can execute the document with their respective counsel.

Parenting Arrangements
Where children are party to the agreement, a separation agreement will provide for parenting arrangement. Spouses can determine who will have custody, the type of custody (sole, joint, shared, etc.) and how they intend to distribute access. For example, the parties will share the children on a one-week-on one-week-off basis.  If the children participate in extra-curricular activities, attendance, pick-up, drop off, the parents will make a provision for same and specify how to accommodate a change in the parenting schedule.

Child Support
Child support is a major component of a separation agreement that includes children. The parties can include who will pay child support, whether it will be based on the federal child support guideline or whether it will depart and for what reason. If there are extra-ordinary expenses (Section 7 expenses) such as daycare, education, dental, medical, and extra-curricular activities, the parties may decide what is the proportionate share each party is required to contribute. The parties can also agree that the primary custodial parent will not pay child support even where his or her income is greater.  Parties should also specify when the child support will end.

Spousal Support
Much like child support, the parties should outline any spousal support payments, detailing who is the payor and the payee, the amount of spousal support payable, the start and end date for payment and the method of payment.  If spousal support claims are waived, the agreement should specify why or denote any alternative. For example, parties can defer waive spousal support in exchange for the proceeds of sale from the matrimonial home or half of one of the parties’ pension.

Matrimonial Home
A separation agreement should detail the division of matrimonial property. If the property will be sold, how will the net proceeds be divided? If the property will not be sold, who will remain in the matrimonial home?

Life Insurance
If life insurance arrangements have been made, especially in relation to the children, parties should include the details of that information in a separation agreement.  Information such as how payments will continue and who will receive the payout on behalf of the children is critical.

Debts
If the parties have marital debt, it is best to indicate how the debt will be divided.

Although seemingly complex, a separation is detail-oriented to ensure the best amicable outcome among the parties. It is a small investment for peace of mind and avoiding toxic litigation, especially where children are involved.

Top Six Mistakes In Separation Agreements

A Separation agreement is an agreement between parties that were previously in a relationship, be it marriage or common law, which is bound by the governing law of contract. The parties contract to a resolution of issues deriving from their relationship.  The agreement is binding on both parties and should one of the parties fail to comply, the complying party can make an application for a breach of contract and seek a remedy deemed fit by a court of competent jurisdiction.

A separation agreement is a detail-oriented document with issues ranging from parenting arrangement to debt and division of matrimonial property. It is unsurprising that in all its complexity individuals often make mistakes when drafting the agreement.  Common to these mistakes are the following six.

1. Not Getting Independent Legal Advice
Parties to a separation agreement may feel it sufficient to draft the document with each other’s consent and execute the agreement together, by simply signing on a dotted line.  Unfortunately, that is not how it works.  In order for a separation agreement to be legally binding, each spouse MUST receive independent legal advice from his or her own lawyer.  Even if one lawyer drafts the agreement, the other lawyer must review the agreement with the other spouse and both lawyers are required to execute a certificate of independent legal advice.  This is a critical step in validating a separation agreement because it ensures that each spouse has read and understood the terms of the agreement and is not under duress to execute same.

2. Not sharing full financial disclosure
Disclosing all assets for the purpose of a separation agreement is always in the parties’ best interest.  If one or both spouses are dishonest at the time of the agreement, once the information resurfaces, it may result in litigation that challenges and overturns the terms of the existing agreement. In addition, if the matter does go to litigation, both parties will be required to provide full financial disclosure anyway and if one of the parties refuses to do so during litigation, he or she may be held in contempt of court.

3. Using “Do it Yourself” Packages
While there is a growing culture of self-sufficient lawyering, especially to reduce costs, “Do it Yourself” kits can result in an ill-prepared and inaccurate agreement that results in an even greater cost having to fix mistakes made independently. It is in a client’s best interest to seek legal advice, even if it is an initial consultation.

4. Concede in order to rekindle the relationship
When drafting a separation agreement, ensure that the terms included are things that you really want. Parties have agreed to include certain terms, especially in relation to children, with the pretense that his or her spouse will get back together and once that does not happen, the spouse no longer wants to comply with the separation agreement. Ensure the terms that are included are terms you will be satisfied with overtime.

5. Making provisions for things you have no legal responsibility for|A separation agreement is certainly the place to address all unresolved issues in a terminated relationship. However, not all issues can be addressed in an agreement. For example, a spouse cannot determine college expenses for a minor child.  A parent has no legal responsibility to pay for a child’s post secondary expenses. Thus, it should not be included as a term of the agreement.

6. Leave out “irrelevant information”
Frequently in separation agreements, couples will focus on a single issue that they deem important and bypass all the other factors. Once time has passed and those issues surface, they have no recourse because it was never addressed. For example, couples might become so consumed by child custody and visitation and in doing so, bypass matters pertaining to finances and property distribution.

A Separation agreement requires thought and reflection prior to execution. Review all drafts with a lawyer before executing the agreement to ensure it reflects exactly what you expect.

Setting The Terms of Your Loan Agreement

Traditionally, “the lender” – the institution facilitating the transaction and providing the loan, determines the terms of a loan agreement. In less formal circumstances however, where a loan takes place between small businesses for example, the terms of a loan agreement is, to some degree, at the discretion of “the borrower”. In instances where either the lender or borrower has the burden of setting the terms of a loan agreement, there are a number of crucial terms to take into consideration to ensure your agreement is ethical, reliable, and in the parties’ best interest.

The Basics
When setting the terms of a loan agreement, the lender should first determine whether the borrower is eligible for a loan (by ensuring that he or she can adequately repay the loan). The process of eligibility can range from valid photo identification and proof of employment to a paystub or a credit check. In extreme circumstances, the lender may request collateral as a form of insurance. The lender’s objective is to ensure that he will indeed be repaid. Consequently, if the borrower does not pass the test of eligibility no further steps should be taken to draft or execute the agreement.

Interest
A loan agreement should include a term pertaining to interest. Interest is defined as money paid regularly at a particular rate for the use of the money lent or for delaying the payment of the debt. In other words, it is a fee for the loan transaction itself. There are two main types of interest rates, namely fixed interest or floating fee rates. The former is a set rate that does not change throughout the course of the loan. For example, the borrower may have a 10% interest rate on the loan in its entirety. The latter is based on an interest margin in addition to a benchmark rate. For example, the borrower may have a margin interest rate of 5% and a benchmark rate. Floating fee interest rates are less frequent as they are only used for complex loans. Most loans will adhere to a fixed interest principle with payments occurring either at the end of the term of the loan or at each pre-determined interest period.

A thorough loan agreement will also stipulate a course of action for default interest. If the borrower fails to make interest payments, the lender may increase the interest rate as a penalty. However, if the increased interest is burdensome and unreasonable, a governing body or court of competent jurisdiction may deem the term unenforceable.

Is The Loan Secured Or Unsecured
When setting the terms of a loan agreement, some consideration should be given to the status of the loan, particularly whether it is secured or unsecured. Determining whether a loan should be secured or unsecured depends on the nature of the transaction. For example, home loans and large business loans are secured. This means that the borrower pledges an asset as collateral for the loan. On the other hand, unsecured loans facilitate loans of much smaller quantity such as payday loans and small business loans of $5,000.00 or less. Unsecured loans pose a greater risk to the lender. Thus, it is imperative that the subsequent terms of the agreement accommodate the risk (interest rate and default clauses).

Prepayment
Will the borrower have a fixed repayment schedule or will the agreement allow for flexibility? A prepayment clause will allow the borrower to repay his loans earlier than the anticipated end date. Some loan agreements may reward early repayment by decreasing the interest rate. Though a prepayment clause is at the discretion of the lender, it is not uncommon for a loan agreement to make it mandatory.

Bilateral vs. Syndicated Loan
Finally, when setting the terms of a loan agreement, the clauses should reflect whether the agreement is bilateral or syndicated. Most loans are bilateral, occurring between a borrower and a single lender. However, where the loan is of a significantly large amount or the lender is a corporation or major investor, the loan must be identified as a syndicated loan.

What is a Promissory Note?

A Promissory note, or, more formally, a Note Payable, is a legally binding contract between a party who has borrowed money (the borrower) from another party who has lent the money, “the lender” with the promise to pay the lender back. While these agreements are usually personal or frequent in small business transactions, they are also useful in instances where the borrower is making a big purchase and is unable to pay the full cost at the time of the purchase. As such, the lender will offer to pay the outstanding amount with consideration that the borrower promises to pay the remainder at a later date. The nature of a promissory note is synonymous with an IOU.

Similar to a loan agreement, a promissory note typically specifies the principal loan amount as well as the interest rate and the expected date the payment of the outstanding balance should occur (maturity date). Not all promissory notes have a date of maturity. For example, a Demand Promissory Note stipulates that the lender can demand that a borrower repay his loan when the lender makes that request. With this method, the borrower may not necessarily have sufficient notice to repay. It is common for lenders to demand payment within a few days. When this is the case, the Demand Promissory Note may also include a clause indicating a grace period. Should the borrower be unable to repay the lender upon demand, the lender might contract for a five-day grace period allowing the borrower a little more time to fulfill his promise to pay, for example.

Though easily construed as the same, a promissory note and a loan differ on the basis that a loan agreement engages more detailed clauses to canvas a wide range of scenarios. Furthermore, promissory notes provide the lender with greater flexibility in drafting and construing the terms of the agreement. For example, if the lender does not wish to charge any interest he is not obligated to do so. Should he choose to charge interest, however, the interest should be reasonable. Interest rates on promissory notes can later be assessed by the federal or provincial government and the lender and borrow can face tax consequences where the rates are deemed unreasonable.

Another example of the lender’s discretion with respect to a promissory note includes the issue of security/collateral. A lender does not have to take security or collateral measures to ensure the borrower will fulfill his promise to pay. However, if the borrower defaults on his promise to pay pursuant to the contract, the lender has the option to take legal action to manage repayment. In addition, a promissory note is executed solely by the borrower’s signature. A loan agreement must be executed by both the borrower and the lender.

It is always in the parties’ best interest to act in accordance with the terms of a promissory note. Because it is a legally binding interest, any default in payment can be applied to the borrower’s credit record. Further, the lender has the right to take legal action for failure to comply with the terms of the note or a breach of contract in any capacity. As promissory notes are, in large part, drafted at the discretion of the lender, it is wise to draft the note with sufficient protection in conjunction with the lender’s interest.

A promissory note is still a reliable method to facilitate financial loans, but its effectiveness comes down to how well the terms of the note are written and construed.

The Difference Between a Promissory Note and A Mortgage

Purchasing a home can make anyone feel like a fish out of water. Pre-approvals, inspections, and a series of checks and balances are overwhelming enough. Once you add paperwork to the mix, every document starts to look the same. Among these blurred lines are promissory notes and mortgages. While similar in concept, a promissory note and a mortgage depart in purpose. A promissory note is a legally binding contract between a borrower and a lender with a promise to repay.

Specifically, in the context of purchasing a home, the promissory note is the borrower’s promise to repay her loan. On the other hand, the mortgage relies on the title of the home as collateral for the loan. It is not uncommon for the borrower to receive both a mortgage and a promissory note during the purchase of real estate. Both documents work collaboratively to ensure the loan is repaid.

Promissory Note

When an individual takes out a mortgage on a home and executes a promissory note, that note is the borrower’s commitment to making the monthly payments on the loan. The note will stipulate details such as the principal amount of the loan, the interest rate, the amount the borrower is required to pay on a monthly or bi-monthly period, the term (the length of time until the mortgage is repaid) of the loan, and the consequences that ensue in instances of late payments or a complete failure to pay –usually foreclosure.

Once the loan has been completely paid, the lender changes the status of the promissory note to “paid in full” and the promissory note is no longer valid for performance. However, where the borrower continuously defaults on payments, the lender will seek repayment by foreclosing the home.

Mortgage

While a promissory note contains the borrower’s promise to repay the loan, the mortgage contains the lender’s power to foreclose. When the borrower executes a mortgage, she agrees to give up the title of the home as security for repayment. Therefore, in instances of default, the lender can ensure he is repaid.

Like promissory notes, mortgage instruments also allocate responsibilities to the borrower. Specifically, the borrower has a duty to maintain the property, pay property taxes, and acquire home and fire insurance (where applicable). Should the lender have to seek repayment in the form of foreclosure there are no additional costs and burden on the lender where the borrower has followed through on her responsibilities.

Should You Make A Roommate Agreement

The prospect of having a roommate is usually blissful. Whether you are sharing an apartment with a friend or an acquaintance, extra company and additional income tends to go along way. In such circumstances, common courtesy is assumed: keep the noise-level down, respect personal space, and clean up after yourself, among others. Despite these conventions, problems between roommates can arise and a Lease agreement between Landlord offers no material remedy for handling tension nor
does it explain how roommates are going to live together. A roommate agreement is a contract made between the residents of a rental unit, outlining the conditions, responsibilities, and expectations agreed to by the parties therein. Also referred to as roommate contracts, these documents address matters such as household duty and restrictions, the apportionment of rent and security deposit, the portion of utilities to be paid by each roommate, house rules, terms relating to how the tenancy can be terminated, and any other terms the parties may deem necessary to the contract. A roommate agreement is a formal way to manage the expectations of residents and protect against hostility when issues arise, but how do you determine if you should make an agreement?

A Roommate Agreement sets the ground rules
Whether you are residing with a complete stranger or a close friend, it is important to be upfront and establish a roommate relationship where two individuals are expected to co-exist and share a single space. A roommate agreement makes each roommate’s role clear, especially with respect to house rules and responsibilities. Having a discussion about the financial aspect of a roommate scenario is actually the easy part. Most roommates do not hesitate to make clear who is responsible for what expense; both parties recognize the obligation goes beyond their relationship. However, an obligation to abide my house rules only exists between the roommates. For example, if one party fails to pay the electric bill, it can effect their credit and the service provider may disconnect the service. If one party fails to take the trash out however, the repercussion is an angry roommate. An agreement forces the parties to have the uncomfortable conversations upfront thereby creating a healthy residential environment.

A Roommate Agreement serves as a referee
The roommate agreement may seem like a burdensome task especially at the start of a new living arrangement, but is a reliable tool to refer to down the line. If a problem arises and tenants are at odds with how to de-escalate an issue, you can simply refer to the agreement to amend a situation according to the terms therein. For example, if there are specific terms regulating house chores and one party is convinced that cleaning the bathroom is not his responsibility on that particular day, the agreement can
help resolve that point of contention.

A Roommate Agreement helps to regulate difficult communicators
Your roommate’s temperament and personality can have a large impact on the nature of your living relationship. Some individuals do not like to be verbally reprimanded nor do they respond well to authority or opposition. Consequently, a roommate agreement works as a mediating communicative tool. Parties to the contract can avoid potential confrontation by allowing the agreement to do the talking.

A Roommate Agreement facilitates an enjoyable living environment
Once a roommate agreement is mutually agreed upon it gives birth to a stress-free and enjoyable living environment. If the parties are able to contract terms that are mutually considerate, taking into account the needs of both residents and evenly distributing chores and responsibilities, they are likely to feel less mothered and more friendly.

Ultimately, a roommate agreement works to enhance your living arrangement. If you value your peace and space, a roommate agreement is definitely for you.

prenuptial agreement

Everything You Need to Know About Prenuptial Agreements

What is a Prenuptial Agreement?
A prenuptial agreement is a contract between two parties in a relationship, established prior to the marriage, that stipulates the course of action for premarital assets should the marriage end. Though not a mandatory requirement, a prenuptial agreement is recommended in instances where one or both parties have significant proprietary and personal assets that they wish to have protected should a spouse die or terminate the relationship. The document is legally binding and can be amended to a postnuptial
agreement should the terms of the agreement change.

Why should I get a Prenuptial Agreement?
A prenuptial agreement is by no means a required step before marriage. For some individuals,the subject of prenuptial agreements are uneasy discussions because it implies that a marriage is starting on uneasy footing. For others, it is a precautionary step to avoid a nasty legal battle in the unlikely event that a divorce takes place. While determining whether or not a prenuptial agreement is right for you is solely a decision between you and your spouse, it is a course of action that works to protect both
parties’ interest prior to the marriage.

If you are considering why you should obtain a prenuptial agreement consider the following reasons:

  • One or both spouses enters the marriage with significant personal assets of his or her own
  • One or both spouses enters the marriage with property ownership
  • One or both spouses has children from previous relationships and is concerned with matters of
    future inheritance
  • One or both spouses expect to inherit a family business or property, or a trust in the future

How soon before marriage should I get a Prenuptial Agreement?
While there is no fixed time to execute a prenuptial agreement, lawyers recommend commencing the process at least three to four months prior to the marriage to allow enough time to collect financial disclosure and to avoid pressuring a spouse to sign the contract.

Do I need Financial Disclosure for a Prenuptial Agreement?
Prenuptial agreements usually pertain to the management of financial affairs. As such, you cannot enter an agreement with your spouse without having disclosed financial documents because it is critical for making sense of the terms of the agreement. Financial disclosure may include information such as a list of your income, assets, debts, and liabilities.

Should I retain my own lawyer?
While some jurisdiction allows for parties to draft prenuptial agreements independently, Canadian law prohibits parties from sharing lawyers when executing the agreement. The presumption is that even though the parties may agree to the terms therein, their interests are not the same. It is always in the parties’ best interest to seek independent legal counsel to revise and execute the agreement.

Does my prenuptial agreement need to be notarized?
Although a notary is not needed for a prenup, both parties must have separate witnesses and must therefore execute the document separately. It is common practice for both parties to have their agreement witnessed by the lawyer retained for independent legal advice.

I am already married, can I still obtain a prenuptial agreement?
Once parties have married, they can obtain what is referred to as a postnuptial agreement. Marriage automatically grants certain legal rights to a couple that is not applicable prior to getting married. However, with a postnup, a couple can settle their affairs relating to finances, property, debt, assets, and children in the event of a separation or divorce.