Prenup advice

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somealias

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Hi all,

I'm approaching the big 30 mark and I've lived frugally until now in order to save up for early retirement. It's enough that spending a couple of K for a lawyer to write one up is a worthwhile insurance policy. Living in Ontario.

Basically I have two key thoughts.

1. Spousal Support. None. I dont pay, partner does not pay.

2. Premarital Assets. (cash/stock in RRSP,TFSA, and regular investment accounts). It and any growth that happens is mine. Same protection for partner on any assets they might have. (Looking at networth/age charts it is likely only going to be a token amount but fair is fair.)

3. Unenforceable clause. Basically something along the lines of if there are any kids then spending equal time with both parents, (50/50 joint)

Some questions,

Would it be possible (or be beneficial) if a document was a cohabitation agreement that could also be used as a marital contract? Ie: Advised by separate lawyers when moving in with potential to become commonlaw. Then again when marrying? That way there is no claiming of "pressure" or "did not know what was being signed"

Obviously I would not add any money to the PMassets accounts to avoid co-mingling. And the initial amount would be protected as well. However, since it is invested in stock there would be growth which would increase the value. Also, while I would not add any new money to it, I would end up buying/selling and moving money between TFSA and RRSP. Anything here I should be weary of or can this be safely protected?

I mentioned a regular investment account and dividends. This means that in addition to my regular employment income I also get taxable dividend income that shows up on my tax return. This money is kept inside the accounts and will not be used for lifestyle until I retire but from what I've seen reading on this site it does not matter and would come into play for support calculations. Correct?

Other random thoughts,

I do "own" a home. Not too much equity since it was bought with a minimum down payment and I dont intend to sacrifice anymore just to pay it off while i'm still single. Time to enjoy life a bit. From what I've read, marriage makes it matrimonial home which is fair enough. For commonlaw it its my name but claims of "improvements" could be made so any increase in value is on the table. Frankly the amount is small enough that I dont really think its worth the bother as long as 1 & 2 are protected. Keep it simple.

I dont plan on any inheritances. I might potentially get something. If I did I would much rather pass it on to my descendants. Gifting some stock when kids/grandkids are born leaves a lot of time for compounding to do its magic.

Sorry its kinda long. You can tell I have put some though into this before posting here.

Any advice,opinions, comments are welcome.

Thanks
 
If you have kids, the prenup will be worth less than toilet paper.

For a home, either sell it and put the cash into a separate account, or have your spouse to be borrow some money equivalent to what you have paid for the house, and use that money to pay off that much of the mortgage. That way, the house is matrimonial, but both have paid an equal amount into the house.

If you want a spousal support release, then don't get married. Frankly, if you really want my advice, don't get married at all under any circumstances.

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Listen to Ackbar! He knows his stuff.

Seriously, don't get married, it is a terrible idea. No gain, mucho pain.
 
You probably won't listen to us, but Janus is absolutely correct. DO NOT GET MARRIED and DO NOT LIVE COMMON LAW.

You can't determine child custody in advance and matrimonial home is always 50 50. As for spousal support release in advance, very "iffy" in my opinion especially if she pulls the plug after a "longer term" marriage.

Seriously, WHY would you want to get married or common law given Family Law in Canada. You sound like a hard working, smart guy. EXACTLY the type of guy who WILL get screwed over by family law. Doesn't matter if you're the nicest guy in the world and give her everything she wants. IF/WHEN she gets bored, she'll take half your assets and half your cash flow my friend.

Seriously, I wished I knew when I got married what I know now !!! I would never have done such a foolish thing. Family law IS unfair in Canada and ignore our advice at your own peril. Trust me, you WILL regret getting married.

Just date and keep separate homes. What's the big deal about marriage, its NOT showing "committment" when one party can leave on any whim they choose AND screw over the higher earner.

Seriously, talk to the guys on this site - I'm not joking. I only wish someone had warned me.......
 
Consider the prenup your statements of intentions.

However actions speak louder than words and as time goes by and the circumstances of life change, the agreement may no longer reflect reality in a fair or legal way.

You might agree to no SS now, but if she stays home with the kids in the future, or even if you end up with a substantially higher salary than her, then that clause is utterly unenforceable.

You are already aware that clauses relating to child custody or child support are not enforceable.

The best use of a prenup is to list and know what assets each party had at the time of marriage. This greatly simplifies the process should a valuation ever become necessary for an equalization of net family property.

However overall I agree with the posters above me... marriage is a lose-lose proposition if you are male and make a good wage. Remember that 50% of marriages end up in divorce, about 80% of these divorces are initiated by the women, and more than 90% of all child support and spousal support is paid by men. In about 70% of cases the female gets sole custody of the kids and the Dad gets to be a visitor in their kid's lives who bankrolls the whole affair while living in a one bedroom basement apartment.

So please do yourself a favor, flip a coin right now. If you lose the flip, you lose not only half of what have right now, but half of everything you will ever make for the rest of your life.

None of us thought it could happen to us, but guess what, it did. So good luck to you :)
 
First of all, don't get married. Your prenup won't override the Family Law Act, and this is especially true if you have a long marriage because the courts will see that your lives and finances became entangled no matter what your original intentions are.

Common law will at least reduce the odds of any equalization of property. However you still need to deal with this in practical ongoing ways. If your ex puts a lot of labour or cash into a home you think you own, there will be a case for a constructive trust.

Certainly use separate accounts for yourself, possibly at different banks. This is similar to accounting for a business. Flat out, consider the home a joint venture and get agreement from a partner off the top to make an equal financial investment. You both put the same amount down, you both make equal payments to the mortgage, taxes, etc. Make your payments from a separate account of yours that is exclusively for joint ventures, so as to have no co-mingling of any funds, and this will give you a factual record.

If you already own a home, rent it out. Start fresh with a new partner. It can be a somewhat romantic venture if you present it that way.

Don't get involved with someone who doesn't already have an education and a career. That won't necessarily always prevent spousal, but if they have a similar income when you start out, this will mitigate spousal, and at least make it clear if you start earning a lot more how much you may be on the hook for. You will know what is happening if your own career takes off.

If you have children, take paternity leave along with your partner, or plan to take the second year off while she goes back to work. It is only fair, and it will establish you as an equal parent. Share all duties. If the child is sick, you take the day off work to care for them. You take time to go the doctor, dentist, etc. Take an equal hit to your career and income from directly caring for the child, and be able to show it. If your job is too important to lose time caring for a sick child, and you need your partner to do it, don't be surprised if you are on the hook for spousal if you break up.
 
Unfortunately I must agree with all the sentiment above. At the begining I took large amounts of time off work to "share in the childrens upbringing" and help out with the kids and housework. I've tried very hard to be a 50-50 participant in all aspects since day one....

With 20-20 hindsight, the red-flag moment should have been once the kids were in school full time (from grade 1 on... 7 hours a day... over lunch and everything). She decided that the "housework" and "shopping" required was so overwhelming that it would be impossible for her to juggle both work and home life.

When she decides to stay home full time, you have no recourse.... you lose 1/2 your money, 1/2 your future income and she is essentially fully retired (with all the trimings) on your dime.

I'm truly torn about what advice to give my teens. The "never, ever, ever get married" speech (as several mention above) is what my gut says right now... however they both want kids and I don't want to discourage that hugely rewarding part of life.

My battle has been going on 3 years and I'm well into 5 figures in costs just trying to salvage what is honestly mine.

Never, ever, ever, ever get married.
 
And just to scare you further (and you should be scared), I am very much like you financially. Generally work contracts (i.e. highly variable income) but live frugally and put away large amounts during the good times (RRSP, RESP, and all forms of debt) to cover the lean times and build a nest egg for the future. I had big dreams of working part time at my current age due to my savvy financial skills.

The last judge we were in front of basically told me I'm completely screwed. In divorce my ONLY obligation is to maximize my income to provide support. This means bye-bye to part time work or any form of retirement.... I must chase high-paying contracts, one after another, forever. Support is to be based on what my "income potential is"... not what I actually make.

Its a SICK, SICK, SICK system.

Never, ever, ever get married. You have been warned.
 
I agree with everything everyone is saying…don’t do it. But if you must…note some inputs…
1. Have a separate residences. You both have your own places but stay at each others place whenever.
2. Get snipped. Yup. Only way other than not having sex ever again to ensure a male doesn’t have a child. Put your boys on ice if in the future you want kids. See P. Diddy and Terrell Owens.
3. Ensure the agreement includes something like “shared-joint custody 50/50 with both parents residing within the child’s school district. Time is shared equally between the parents with a swap time of 4:00 pm every Monday.”
a. Most people over look residency as one parent becomes “primary” and controls where the kid lives and goes to school and can change that at will, especially when she meets the new guy and decides to move to Alaska.
4. Note that raising the child (parental leave) is split 50/50 over a 12 month period with mom taking the first 6 months and dad taking the second 6 months off work.
5. Do an annual review and sign a document saying all is good, agreement is up-to-date and no events or “acts of god” occurred to make the agreement invalid. If there is a change, update/amend the agreement for that change.
6. Have 3 bank accounts, one for you, her and a joint. The joint you both agree to pay for your partnership, and you both pay equally into it. So for example, you make $80k, she makes $50k, you both put $20k each into the joint account annually. The rest goes into your individual accounts and you both us that money as you see fit.
7. Don’t get married, and if you can’t avoid living apart just be common-law. Have a wedding and all just don’t sign a stupid piece of paper.
Again, it is a crap shoot and doing whatever you can under the sun will still not prevent the wrath of the family law act and hungry lawyers and a judicial system that’s goal is to suck you dry.
 
I'm not as big on the "don't get married" bandwagon as other posters - but I do think that it's important to recognize that the way things fall out at the end of a marriage has more to do with what went on during the marriage than it does with any agreements which may have existed before the marriage. CS, custody arrangements, spousal support - all of that is determined by factors which you have no way of anticipating, let alone planning, right now. I think the best you can do is draw up an agreement which states what assets each of you are bringing into the marriage (and may be able to take out of the marriage, as long as you haven't mingled them in any way, such as by using one person's inheritance to replace the furnace in the matrimonial home). For the rest - you'll have to go on faith and trust and hope that things will work out well. Or not get married.
 
Just to comment on an earlier poster's comment....

"Live common law in Quebec".

While I concur this is a great idea at this time, it's important to note that...

a) Apparently the Que. government is thinking of "reviewing" the current situation (the party has to end sooner or later lol).

b) the fact that laws can CHANGE

My understanding is that BC recently changed the laws so that essentially after being common law for two years, then you are considered "married" as far as Family Law goes. Oh, and the cherry on top is.....the bastards made it retroactive two years...

The thing to take away from this is....

If you think things are bad now, they could get even worse beyond what you could imagine. I wouldn't be surprised if in the future the one who inititates the divorce (and we all know who that usually is) gets to take a piece of the other's anatomy with them along with the wallet.....

There is no "grandfathering" what the law is at the time of getting married. In other words, even the best educated potential spouse can be signing up for something they had no idea of, let alone consented to.

Hopefully when people become so fearful of getting married/common law that their will be pressure on the government to stay the hell out of our personal lives and destroy these unfair, punishing laws with respect to divorce and the resulting de facto financial slavery of the higher earning spouse.
 
I agree.. Wholeheartedly.. With everyone who responded to OP. It is a sick system. Look at the divorce stats.

No offense to anyone on here who is married, or will marry again - but my take on it is NFW.
 
Wow. Definately a lot of strong opinions..

Unfortunately for me, I am still young and dumb enough to want to have kids so living seperate doesnt really work. Life would be so much easier if it wasnt the case.

I dont have much equity in the house so I really dont care about that. I would consider it a sunk cost.

Mess said:
First of all, don't get married. Your prenup won't override the Family Law Act, and this is especially true if you have a long marriage because the courts will see that your lives and finances became entangled no matter what your original intentions are.
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The idea of paying SS to another adult feels very wrong. Is a no SS clause really that questionable for a marriage or commonlaw? If both parties agreed to it before hand and had legal advice before signing... Not marrying/commonlaw someone without an education and jobs prospects is a given. "Dumb" or incompetent people are a huge turn off so no worries there.

Is marriage really that different from commonlaw? From what I've read both have provisions for spousal support so if a no SS clause is useless in a long term marriage then it would be equally useless in a long term commonlaw.


FightingForFamily said:
However actions speak louder than words and as time goes by and the circumstances of life change, the agreement may no longer reflect reality in a fair or legal way.

You might agree to no SS now, but if she stays home with the kids in the future, or even if you end up with a substantially higher salary than her, then that clause is utterly unenforceable.
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SomeGuy said:
With 20-20 hindsight, the red-flag moment should have been once the kids were in school full time (from grade 1 on... 7 hours a day... over lunch and everything). She decided that the "housework" and "shopping" required was so overwhelming that it would be impossible for her to juggle both work and home life.

When she decides to stay home full time, you have no recourse.... you lose 1/2 your money, 1/2 your future income and she is essentially fully retired (with all the trimings) on your dime.
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Frankly I expect my parter to contribute financially. If they unilaterally deceived to not to go back to work after maternity leave then I would strongly consider becoming a StayAtHome as well. I would probably be able to cover the basics from the income from my early retirement accounts by that time anyways. I grew up "poor" middle class; its not so bad.

I thought of the seperate and joint accounts as well with each contributing 50/50 and have equal say over the joint budget. Seems fair to me. If someone doesnt contribute money then they dont get a say on how its spent. Not a popular view with people ive talked to but that how I see things (life in general).



Mess said:
Common law will at least reduce the odds of any equalization of property. However you still need to deal with this in practical ongoing ways. If your ex puts a lot of labour or cash into a home you think you own, there will be a case for a constructive trust..
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Would I be able to protect the growth of premarital stock investments? Or in a commonlaw situation? I would not be adding any new money to it, just natual growth/dividends.



Mess said:
Don't get involved with someone who doesn't already have an education and a career. That won't necessarily always prevent spousal, but if they have a similar income when you start out, this will mitigate spousal, and at least make it clear if you start earning a lot more how much you may be on the hook for. You will know what is happening if your own career takes off.

If you have children, take paternity leave along with your partner, or plan to take the second year off while she goes back to work. It is only fair, and it will establish you as an equal parent. Share all duties. If the child is sick, you take the day off work to care for them. You take time to go the doctor, dentist, etc. Take an equal hit to your career and income from directly caring for the child, and be able to show it. If your job is too important to lose time caring for a sick child, and you need your partner to do it, don't be surprised if you are on the hook for spousal if you break up.
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As you can probably guess I am not a "career" type person at all. A coworker I know takes the summers off to be with his kids. I would like to do this as well by the time I am in my mid 30s. Even if I didnt have kids I would do this. Retiring in my 40s is a long term plan for me. Given the field that I am in, I would be a dinasaur by that age anyways.

Cmon guys, I need some hope :) Most of you probably didnt get a cohab agreement/mariage contract. Would it really be that useless?
 
The whole court and Legal thing is just another Legal way for Lawyers and Judges to take other peoples hard earn money, But Please stop! Have you all listen to yourselves. Why even consider getting married, having any relationship or children just hoard your money! Live by yourself. Then you have no investment, commitment, responsibilities or emotional ties and you can love your money instead. "Laws of attraction" you go in with all that baggage and negativity and thats all you will get in return. Your not looking for love, respect, commitment, a family, really. Your looking for convenience and a excuse.............sheeesh
 
Marriage is a binding contract. Laws supersede any "agreement" you have written up, no matter how crafty you think you are.

If you and your fiance aren't prepared to share everything with each other then do not consider marriage.

What happens if one of you becomes ill, or is disabled by a car accident, during your marriage/common law relationship?

I find it interesting that you are reading a divorce forum. Perhaps you should have your fiance log on so she can read all of the horror stories as well. It may come as a shock to you but women such as myself and many others have suffered devastating financial loss at the end of marriage.
 
The idea of paying SS to another adult feels very wrong. Is a no SS clause really that questionable for a marriage or commonlaw? If both parties agreed to it before hand and had legal advice before signing... Not marrying/commonlaw someone without an education and jobs prospects is a given. "Dumb" or incompetent people are a huge turn off so no worries there.
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The way it is implemented in the courts today is often wrong.

My ex has 2 university degrees, she made the same salary as me when we were dating and married. However after our son was born, we decided daycare was very costly and we wanted to have more kids anyways so she stayed home.

Fast forward two years to finding out we couldn't have any more kids, she sank into depression, blamed me and left me.

So far she wracked in more than $70,000 from me, and continues to receive $1700 per month in child and spousal support from me. She has no plans to return to the workforce. Why should she now?

Since separation I am living in a single bedroom that I can barely afford for $375 per month. I am a Systems Analyst for the government and she is a certified teacher. Due to family law in Ontario, I am forced to subsist on around $20k per year. The rest goes to my ex and the government.

This is reality. I was only married for 6 years. If it happened to me, it can happen to you or anyone else.
 
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arabian said:
Marriage is a binding contract. Laws supersede any "agreement" you have written up, no matter how crafty you think you are.

If you and your fiance aren't prepared to share everything with each other then do not consider marriage.
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I didn't read SOMEALIAS as being "crafty"... just practical.

The notion of "sharing" changes over the course of a marriage... which is exactly what caught me off guard.

For me it was a case of "I'm putting in most of my time at home with the kids and you are working most of the time"..... to... "I'm staying home all the time, even though the kids are in school... and you must work full time to support us".

Slowly... and subtly... she's at home kicking back for 90% of the day and I'm working my butt off constantly.

Unfortunately... the laws back up her point of view.
 
Your three thoughts:

SS – I don’t think this holds up in court. You can agree to whatever you want now, but in the event of breakup a judge would follow the routine/habits/system you established as a couple, and without any regard to future plans (such as how you supporting your partner during a jobless period was supposed to be temporary).

Premarital Assets – Won’t hold up in court either. Value as of date of marriage stays yours, but growth is a marital asset and would be divided in two by a judge.

Child Custody and Time – Again, it probably wouldn’t hold up in court. If one of you stayed home on leave, or was more available to the children due to the other’s work hours, that’s who will be most likely to get custody.

The more contact I have with family law, the more a prenup seems completely powerless.

A few things I would suggest though

- Date your partner for a few years before living with them, if ever. Get to know them VERY well. Then live with your partner for a few years before marrying them, if ever. Get to know them EVEN BETTER. Find out how compatible you are in essential long-lasting ways before making any commitment, keeping in mind that what seems charming now may turn out to be intolerable in the future.

- Do full financial disclosure (Form 13) to each other before moving in together. Find out what your situations are ahead of time. No secret bank account stashes, no hidden debts. Get to know spending habits before comingling any money.

- If one of you owns a home, get a valuation before the other one moves in. If there is to be a wedding, arrange for the value each of you has put into the home to be equal first, either by taking out a bigger mortgage, a cash payout from one to the other, whatever works. Make your initial investment be equal because that’s the way it’s going to come out.

Planning for separation is about the least romantic thing you can do as a couple. It conveys lack of love and trust. Most partners want to hear that you would do anything for them, and that you would never break up so this is all an irrelevant waste of time. Even knowing the failure statistics, everybody who gets married assumes they’ll be one of the successes. All this stuff really needs to be automatic by law, so that couples do it as part of the wedding process and one of them doesn’t have to come across as the ‘jerk’ who insisted on a pre-nup.

A marriage contract is very much one-sided, and few people know this before getting married. If one partner fails to adhere to it (cheats, lies, gambles, turns into a lazy bum or is a bad parent, is abusive, whatever) the other partner is not released from upholding their end of it.

However.

You have to remember the forum you have come to. We are all the 50% whose relationships failed. If you went to some sort of long-term marriage forum for tips on how to communicate well, keep the marriage fresh and so on, I'm sure you'd get the other 50% telling you things like "congratulations!" and "go for it!"

I would recommend doing a bunch of research on personality disorders, and 'diagnose' your significant other to see if they raise any of those flags. Pay especially close attention to glibness, manipulativeness, deceitfulness, etc. Steer clear of dating them! Anybody else and you can probably break up with them a lot more reasonably.

Good luck.
 
FightingForFamily said:
The way it is implemented in the courts today is often wrong.

My ex has 2 university degrees, she made the same salary as me when we were dating and married. However after our son was born, we decided daycare was very costly and we wanted to have more kids anyways so she stayed home.

Fast forward two years to finding out we couldn't have any more kids, she sank into depression, blamed me and left me.

So far she wracked in more than $70,000 from me, and continues to receive $1700 per month in child and spousal support from me. She has no plans to return to the workforce. Why should she now?

Since separation I am living in a single bedroom that I can barely afford for $375 per month. I am a Systems Analyst for the government and she is a certified teacher. Due to family law in Ontario, I am forced to subsist on around $20k per year. The rest goes to my ex and the government.

This is reality. I was only married for 6 years. If it happened to me, it can happen to you or anyone else.
Click to expand...

Go to your MPP and your MP and and explain your situation.
If everyone did this, it would bring family law reform to the forefront of political debate. I myself go and see my MP and MPP at least twice a year.
 
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