Prenups can be an uncomfortable topic, but a big help in the event of heartbreak

There’s a certain stigma that can come with a prenuptial or cohabitation agreement, which outlines the fate of a couple’s assets if their marriage or common-law relationship were to end. Some might argue it signals a lack of trust or endurance of the relationship. But the conversation doesn’t have to turn sour, experts say.

Most professionals will recommend a prenup for couples with a wealth disparity, or if one of them is bound to inherit money from family, and even in situations of second marriages, to make clear the division of assets.

From assets to expectations, prenups set the ground rules

But with more people getting together later in life, many already own assets such as a home, vehicle, or have larger investments and savings. Prenups could preserve those assets and keep a record of what each spouse brought into the marriage or cohabitation, said Aimee Schalles, a lawyer and co-founder of Jointly Solutions Ltd., an online prenuptial and cohabitation agreement platform.

“We’re of the view that prenups are for everybody,” Schalles said. “We think even people who don’t have much can benefit from having some clarity in documenting what their arrangements are, and at least what they’re bringing into the relationship.”

Usually, a divorce follows the default provincial family law in the absence of a legal prenuptial agreement. 

Holly LeValliant, estate and trust consultant at Scotiatrust, said while she doesn’t always recommend a prenup to all her clients, splits can be hard without a preset agreement. “You don’t marry the same person you divorce,” she said. “You can end up in a situation where you may regret later not having those conversations.”

LeValliant said prenuptials require both partners to disclose their complete financial picture. Hiding assets and debt could make the agreement invalid. The partners also need to each seek independent legal advice, she added.

Prenups protect assets and offer financial peace of mind

While prenups are primarily made to protect each person’s assets, it can also help avoid having to take on your partner’s debt. In most provinces, what people bring into their marriage remains theirs, including debt, Schalles said. “If you came into a relationship with a lot of student debt, in most provinces, that would be yours to keep and your responsibility to pay,” she said.

But like assets, debt can accumulate interest—which the partners may have to share. That can be avoided with a prenuptial agreement.

The timing of these agreements is also really important, experts say. For example, a prenuptial agreement can’t be drawn up a day before the wedding, which could lead to one person feeling pressured to sign the papers without a choice or time to find a lawyer.

“The courts look at issues like: When was the wedding planned? Had people travelled into the wedding? Have invitations been sent out?” said LeValliant. “If you’re putting too much pressure on that party where they feel like they have no choice but to sign, it may be a void agreement.”

A flexible prenup grows with your relationship and circumstances

How the conversation about a prenuptial agreement goes might depend on how the subject is brought up. 

Talking about a prenuptial is essentially an extension of financial planning, said Blair Evans, assistant vice-president of tax and estate planning at IG Wealth Management. “Sometimes, having a financial discussion is daunting, but the more financial discussions that you do have with your partner, generally, they become less daunting,” he said.

Schalles said the storytelling method could help get through the hard part of bringing it up. “Unfortunately, almost everybody knows someone who’s been through a bad split,” she said.

One way to bring up the word “prenup” without conflict could be sliding it in during financial check-ins. “It could be to say to your partner: ‘Hey, you know, do you remember our friend Jonathan and that horrible split that he had a few years ago and how much stress it caused him and his ex-wife? I don’t want that for either of us,’” Schalles said. 

She added: “If we are to find ourselves in this situation, I would prefer for us to have a plan in advance so we don’t find ourselves going through what they went through, because everybody agrees that that’s ugly.”