top of page

Do you need a Prenuptial Agreement? And how to have the conversation about a prenup.

A prenuptial agreement, otherwise known as a marriage contract in Ontario, could be a sensitive subject. Though here is what you need to know.

Couple Getting Prenup

A prenuptial agreement may appear to be an unromantic start to what ought to be a happy occasion. However, they have evolved greatly since their inception, and they are rapidly gaining favour.

Now while no upcoming spouse desires to plan for a divorce, though divorce is a growing reality and in the off chance it happens, you'll want to be prepared. Just like you don't expect to use the airbags in your car, you may not expect to need a prenup, but like the airbags, a prenup is there and used to protect you in the unlikely chance you end up in a divorce.

Thus ensuring that your prenup is applicable and properly drafted for your circumstances and position, it will serve to help safeguard you and your assets.

What is a prenuptial agreement?

A prenuptial agreement is a written contract that a couple enters before marriage. It covers the allocation of assets in the event of a failing marriage that lead to divorce. And if planned and done properly and addressed early on, it can be a vital solution for managing the outcome.

A prenup or marriage contract may address a variety of marital concerns, including, property ownership or division, support responsibilities, the right to guide their children's education and moral upbringing, and any other subject pertaining to a potential divorce settlement.

A prenuptial agreement can also be an excellent approach to prevent court procedures and reduce the possible financial and emotional impact of a divorce on a marriage. In Canada, prenuptial agreements are governed by provincial law. In Ontario, premarital agreements are known as marriage contracts.

Eight reasons for having a prenup:

  1. You want to safeguard your present assets (such as a house, investments, insurance policies, jewelry, or other monetary/sentimental value belongings) as well as future inheritances.

  2. How to handle a large disparity in the worth of assets brought to the marriage by each partner.

  3. You own or have a controlling interest in a company (especially a family business).

  4. One (or both) partners brings a significant amount of debt into the partnership.

  5. You want to keep your current estate plan in place so that your assets are distributed according to your intentions after you die.

  6. One or both partners are divorced and/or have children who may be receiving financial assistance.

  7. A prenuptial agreement may make divorce less acrimonious, allow a smoother settlement (which may result in cheaper legal bills), and assure equitable wealth distribution.

  8. Divorce is a typical source of financial difficulty and bankruptcy, and it has the potential to jeopardize long-term financial health and stability.

Talk about it early; don’t wait too long before having the conversation.

Introducing the concept of a prenuptial agreement to the expected spouse isn’t all that easy. However, the first stage for highly wealthy people is to have an early discussion with their children about future expectations surrounding potential partners joining the family.

When families discuss prenuptial agreements early on, possibly even before the child has met their prospective spouse, the matter is less emotionally charged and more easily to be had. Noting that the emphasis should be on how a prenup might preserve the family wealth.

Make a list to help facilitate the conversation.

Begin with putting together a list of the familial assets and liabilities and review what are the musts to keep and protect. Then, with your potential spouse and legal counsel you should begin to chat about things candidly. This is to determine which assets will be retained individually and which will be considered marital property, and why. Fully state the assets and liabilities of each party. Determine how marital property will be acquired and named. Example being, will marital property be bought with marital funds? How will those assets be distributed in the event of a divorce? How will household costs be covered? How will debts before the marriage be handled? You should also speak to a financial advisor for help to better understand your assets and overall financial circumstances going into the process.

Common components of a prenup:

  • Separate and Shared Assets: Each spouse may choose which assets they'll keep in a divorce.

  • Separate and Joint Debts: To prevent burdening each other with obligations, keep debts separate. Specify how much each partner is accountable for if you have shared debt.

  • Children: A prenup cannot commonly contain child custody, visitation, or support for present or potential children.

  • Alimony/Spousal Support: This is optional in a prenup. Though topics like who will support whom? Payment amount, payment schedule? As well as support conditions. If you don't specify spousal support, courts will likely use provincial and federal legislation. They'll also examine divorce-related situations.

  • Inheritance Rights: When you marry, your spouse usually inherits half of your fortune. However, if you want to pass a set amount to another party, such as other family members, children, or a charity organization, you may establish a prenup to control their inheritance rights.

How Can Financial Advisors Assist Couples?

Analyzing each couple's financials in light of their existing situation and prospective agreement. Partners should discuss how their finances will change following marriage; this should be a collaborative effort with their financial advisor.

Here are some of the areas we start our review with clients:

  • How do you plan to handle your money? Will they be merged, separated, or a mix of the two?

  • What are your individual financial goals? Short-term and long-term, individual and collaborative?

  • What are your household's financial values and priorities?

  • What are the similarities and differences between your attitudes and opinions on money?

  • How can you collaborate in order to be partners in this financial journey?

In summary, preserving the family's wealth for future generations.

In the end, a prenuptial agreement is intended to preserve wealth, safeguard assets, and define the financial rights of both parties. It should define and explain the couple's financial circumstances and objectives with respect to separate property, inheritances, and eventual marital property.

In addition, the agreement should specify how assets will be split, if and how spousal support will be given, and how future earnings will be handled. This plan should describe the method and handling of certain assets, such as those put aside for children or those passed down through generations.

For anything this important, please consult professionals whether legal, accounting, and financial advisory.


Gianluca Folino

Financial Advisor, Manulife Securities Incorporated

Life Insurance Advisor, Manulife Securities Insurance Inc.

This publication is solely the work of Gianluca Folino for the private information of his/her clients. Although the author is a Manulife Securities Advisor, he/she is not a financial analyst at Manulife Securities Incorporated. (“Manulife Securities”). This is not an official publication of Manulife Securities. The views, opinions and recommendations are those of the author alone and they may not necessarily be those of Manulife Securities. This publication is not an offer to sell or a solicitation of an offer to buy any securities. This publication is not meant to provide legal, accounting or account advice. As each situation is different, you should seek advice based on your specific circumstances. Please call to arrange for an appointment. The information contained herein was obtained from sources believed to be reliable; however, no representation or warranty, express or implied, is made by the writer, Manulife Securities or any other person as to its accuracy, completeness or correctness. This publication contains opinions of the writer and may not reflect opinions of Manulife Securities Incorporated. The information contained herein was obtained from sources believed to be reliable, but no representation, or warranty, express or implied, is made by the writer or Manulife Securities Incorporated or any other person as to its accuracy, completeness or correctness. This publication is not an offer to sell or a solicitation of an offer to buy any of the securities. The securities discussed in this publication may not be eligible for sale in some jurisdictions. If you are not a Canadian resident, this report should not have been delivered to you. This publication is not meant to provide legal or account advice. As each situation is different you should consult your own professional Advisors for advice based on your specific circumstances. Manulife, Manulife & Stylized M Design, Stylized M Design and Manulife Securities are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.

Additional Information & Disclosures: Manulife Securities Incorporated does not make any representation that the information provided in the 3rd Party articles is accurate and will not accept any responsibility or liability for any inaccuracies in the information or content of any 3rd party articles. Any opinion or advice expressed in the 3rd party article, including the opinion of a Manulife Securities Advisor, should not be construed as, and may not reflect, the opinion or advice of Manulife Securities. The 3rd party articles are provided for information purposes only and are not meant to provide legal accounting or account advice. Gianluca Folino and Manulife Securities Incorporated(“Manulife Securities”) do not make any representation that the information in any linked site is accurate and will not accept any responsibility or liability for any inaccuracies in the information not maintained by them, such as linked sites. Any opinion or advice expressed in a linked site should not be construed as the opinion or advice of Gianluca Folino or Manulife Securities. The information in this communication is subject to change without notice


bottom of page