With wedding season in full swing in Canada, prenuptial agreements are becoming increasingly popular among millennials. According to family lawyers who spoke to Global News, more individuals in their late 20s, 30s, and early 40s are opting for prenups, recognizing the potential benefits they offer in terms of reducing stress and heartache in the event of a divorce.
Prenuptial agreements are legal contracts that outline the division of a couple’s financial assets in case of a marriage breakdown. While planning for a divorce may not be the most romantic start to married life, it is just as crucial as financial planning or other aspects of cohabitation, according to Kirsten Hnatuk, a partner at Robertson Stromberg LLP. Prenups act as insurance policies, protecting individuals’ assets and making the separation process smoother.
Divorces can be messy and take a significant toll on individuals both financially and emotionally, says Laura Paris, an associate lawyer at Shulman and Partners LLP. Taking the step to sign a prenuptial agreement when couples are still in love with each other can offer numerous benefits.
The trend of signing prenups is not limited to Canada. A survey conducted in the United States found that an increasing number of Americans are signing prenuptial agreements. Furthermore, four in 10 individuals expressed support for including a prenup as part of their wedding planning checklist.
There are several reasons why prenuptial agreements are becoming more popular, particularly among millennials. The average age at marriage in Canada has been steadily rising, with individuals opting to delay tying the knot. This means that millennials often enter marriage with more assets to protect, such as houses or pension plans.
Experiencing a divorce in a broken home can also influence individuals to value prenups. Witnessing firsthand the stress and turmoil caused by divorce can drive individuals to take steps to minimize such hardships for themselves and their families.
The current state of the economy, with high inflation and interest rates, has made it challenging for new couples to afford basic necessities like groceries and housing. Consequently, there has been an increase in consultations related to cohabitation agreements or marriage contracts, particularly among millennials and their parents.
The rising popularity of prenuptial agreements can also be attributed to the pragmatic approach millennials have toward money. They are less emotionally tied to financial decisions, prioritizing practicality and protection.
While prenuptial agreements may be subject to negative connotations, they can be positive for all parties involved, according to Paris. It is essential to approach the topic sensitively and clearly communicate the reasons for wanting a prenup. This is especially important when a partner is financially advantaged and the agreement involves protecting assets owned by others, such as family businesses.
Starting the conversation about prenups at least six months to a year before the wedding is recommended. Both sides should engage separate lawyers to ensure legal advice and facilitate the prenup process. Transparency is vital, and full financial disclosure is strongly encouraged to avoid undermining the validity of the agreement.
Spousal support is another aspect that may be included or waived in prenups. Paris advises caution when including spousal support releases, particularly in cases with significant income disparity. It is crucial to limit the amount payable in the event of a divorce. It’s also important to note that prenups are not set in stone and can be modified at any point in the marriage with the agreement of both parties.
For those without a prenuptial agreement, family laws in each province outline protections in the event of a marriage breakdown.
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