Four situations where a marriage contract is a good idea

This article looks at four situations where having a prenuptial agreement could prove beneficial.

Far too often people think of marriage contracts, such as prenuptial agreements, as being suitable only for those who have large and complex estates. People who have more modest livelihoods often assume that a prenuptial agreement is an unnecessary expense. However, prenuptial agreements are not simply for the rich and famous. In fact, these contracts have grown considerably in popularity in recent years among Canadians of all walks of life. Below is a look at four situations where having a prenuptial agreement is a very good idea.

1. Second marriages

Those who have already been through one divorce know how difficult a process divorce can be. As the Globe and Mail points out, anybody who is entering their second marriage should do everything they can to make sure property that was salvaged from a previous marriage is protected the second time around. Additionally, a prenuptial agreement can help protect the financial interests of children from that first marriage.

2. Blended families

Similarly, if one or both spouses has children from a previous relationship then it is an extremely good idea to have a prenuptial agreement drafted. That's because there are likely certain assets that each spouse wants to set aside for their children's future inheritance. A prenuptial agreement can ensure that those assets are protected and not subject to property division if a divorce does happen.

3. Retirement planning

As notes, people who have built up considerable retirement funds of their own should seriously consider the advantages of a prenuptial agreement. Retirement assets that have been built up during the course of the marriage are typically subject to division even if those assets are only in one spouse's name. A prenuptial agreement can provide greater protection for one's retirement goals.

4. Protecting individual assets

Courts will typically divide a marital estate equally between both spouses going through a divorce, meaning that assets that were acquired before the marriage are generally exempt from division. While this distinction makes sense in theory, in practice it is often difficult to determine what was acquired before versus during the marriage. A prenuptial agreement can specify which assets belong to which spouse, thus ensuring that those assets don't get mingled with the rest of one's marital estate.

Prenuptial agreements are an excellent tool for anybody who is about to get married. Whether couples have large and complex estates or live by relatively modest means, they can almost certainly benefit from the protection and security a prenuptial agreement provides. To find out more about the benefits of a prenuptial agreement or to get assistance drafting a legally enforceable prenuptial agreement, it is important to reach out to an experienced and qualified family law lawyer for help.