What’s a Prenuptial Agreement?

Also known as a Marriage Agreement, it is a contract between two people who are planning to be married. A prenuptial agreement is very similar to a Cohabitation Agreement, where the couple live together in a common law relationship. Such agreements determine how property and debt will be divided at any time during the relationship but also in case of separation or divorce.

Who needs a prenup?

If you are considering cohabitation, you would benefit from a prenuptial agreement


  • You expect to inherit wealth, a property or business
  • Your partner has significant debt
  • You, or your partner, have children from a previous relationship
  • You, or your partner, will make a career sacrifice to raise children
  • You own property
  • You own a business
  • You have a pension
  • You possess chattels which cannot be easily sold and divided
  • You possess intangibles which cannot be easily divided such as a brand, website, listserve, social media channel, or membership.

 What does a Prenuptial Agreement do?

Essentially a prenuptial agreement will change the way property would otherwise be divided in a divorce under the BC Family Law Act. For a marriage that ends without a “prenup”, the Act would normally presume that everything should be divided equally. A prenup usually aims to provide for an unequal division of family assets. For it to be legally enforceable, each party should have their own independent legal advice and acknowledge the following:

  1. That the spouse is aware of the terms of the agreement and the legal effect of the terms of the agreement.
  2. That the spouse who signs the agreement knows what the law would usually provide but is willing to forgo what is set out in the law in favour of the terms of the contract.
  3. That the spouse is signing the agreement freely, voluntarily and under no coercion.
  4. That the spouse is over 19 years of age.

Obviously it can be uncomfortable dealing with your spouse-to-be on this topic. If you are the wealthier one, you will want to protect the assets you accrued before the marriage, though these are already somewhat protected under the BC Family Law Act. If you’ve put your wealth to work, invested wisely and now have a profitable business or two, you’ll want to preserve these earnings in case the relationship fizzles. As you might imagine, this conversation is a delicate one that requires a bit of finesse.

 A Prenup Cannot be significantly Unfair:

If you are the spouse with less wealth going into the marriage, there should be room made in the conversation to negotiate a good outcome for you. There are ways the agreement will fail in its job if it’s ever tested. You must, for example, be made perfectly aware of everything you are giving up your claim to; non-disclosure is one flaw commonly seen in prenuptial agreements that fall apart in court. Although the point of a prenuptial / marriage agreement is to plan for a potential unequal division of property, it cannot be made to be “significantly unfair”. One spouse may not take advantage of the other or the court will be inclined to interfere.   Prenuptial agreements can become stale. The longer the relationship, the more that events unfold differently than anticipated and the less the parties abide by the prenuptial or cohabitation agreement the less enforceable the agreement will become. It is therefore important to consider your prenup to be part of your financial plan and renew your agreement after significant life events.

 Prenuptial Agreements and Pre-existing assets:

If a pre-existing property was never used for a family purpose, it is deemed not to be a family asset and thus not subject to division.  If it had been used for a family purpose, the increased value of the property may be subject to division. A spouse could avoid dividing the increase in value of a property by demonstrating in court that such division would be unfair. The gains on recreational and revenue-generating properties are often re-apportioned to the spouse who owned, enjoyed and maintained them, but it is necessary to present evidence and convince the court to achieve this

The Family Law Act dictates that assets brought into a relationship are excluded from equal division if the relationship dissolves. However,  while this excluded property is not subject to division, any increase in the value of the property, from the date the relationship began until the time when the matter is resolved, is family property and therefore is subject to equal division.  The difference in value from the date the relationship commenced to the date the issue is resolved is the amount which will be equally divided. Given that real estate in the lower mainland, including Surrey, is rapidly increasing in value year over year, this divisible difference can end up being much greater than the pre-existing, protected principle. This is but one example where a prenuptial agreement will be of great protective benefit, particularly where the pre-existing property is

  • a recreational property enjoyed by extended family
  • an inheritance that may be enjoyed by the family
  • a revenue generating property designed for retirement income

And, since you’re planning your future together, it’s also important to have clear expectations around

  • Children and Childcare
  • Finances / Financial Planning
  • Country or Province of Residency