What is a prenuptial agreement and what is a postnuptial agreement
Even though we can be fixed fee divorce lawyers, that is people come to us when they are getting divorced at the end of their marriage, some people want a legal agreement before marriage. People might do this because they have already experienced the sting of separation in their past and don’t want to repeat the financial consequences they may have experienced after their previous relationship failed.
Folks want to ensure that if they end up getting divorced, their assets are protected. This is why they will get a prenuptial agreement. A prenuptial agreement is a pre-marriage financial agreement.
At Pathway Legal, we charge the same fees for all of our agreements. So, as you can see above, the fixed fee is as above.
Sometimes people ask us: “what is a postnuptial agreement"? Essentially, this is a prenuptial agreement after marriage. Like a prenuptial agreement, it is a financial agreement, except the timing is different in that it gets entered into after people get married and not before.
In these circumstances, folks either did not get their prenuptial agreement signed before they got married or are having some challenges in their marriage and are unsure if it will last.
Such folks want to ensure that if they are heading to separation and ending their marriage, they want to have a friendly divorce instead of a high conflict divorce.
An easy way to get to an amicable divorce process is by having a postnuptial agreement that clarifies your divorce's financial implications.
This way, even if people are concerned about their marriage, they are more likely to continue trying to work out the bumps in their relationship rather than simply cutting their losses. They want to ensure that if they stick it out and end up getting divorced later on, they will enjoy the same benefits of a pre-marriage financial agreement. That is, they have a prenuptial agreement after marriage.
What is a postnuptial agreement? Meet Patrick
Our client, Patrick, was financially very well off. Even though he was still in his early 30s and self-made, there was no question that he had a high net worth. He married young and he and his wife had significant assets. He also earned significant income and was very concerned that if he and his wife separated, he would have significant child support to pay even if he and his wife shared care of their children. He was right about that. When he asked us how does child support work and we explained to him that it was based upon his income, he was fearful. He feared for a good reason because his obligation would be very high. This fellow’s income ranged from as high as $800,000 to as low as $30,000 per year. Because he had such a broad-ranging income, he entered into a post-nuptial agreement that capped his income for child support purposes. His wife readily agreed to the post-nuptial agreement because she knew she was entitled to significant assets in the event of their separation.
In this case, our client hoped things would work out between him and his wife, but he was worried that if he stayed in his marriage any longer, his obligations would only continue to mount. As a result, he asked his wife to enter into a postnuptial agreement which was essentially a prenuptial agreement after marriage. They divided their significant assets by agreement and agreed upon the support obligation in the event of their divorce or separation. Eventually, these parties did separate, but when they did, they headed straight for a friendly divorce. It is several years later and Patrick and his ex-spouse are the flagship of what a friendly divorce can look like. Although there are some bumps in the road, they get along well and both keep the best interests of their children as their main priority. Just recently, Patrick has retained us to move to the next step, that is, him obtaining a flat fee divorce.
What is a cohabitation agreement?
A cohabitation agreement is like a prenuptial agreement, except it applies whether or not you get married. Another way of describing it is that it is a common law marriage agreement, that is, it is an agreement you enter, without having to be married.
Because of the BC Family Law Act, many people are unaware that they may have significant financial obligations to the person they live with. Unbeknownst to them, they create obligations for themselves without having taken the step of getting married!
Your cohabitation agreement lawyer will tell you that having clarity of agreement in the event of the breakdown of your relationship (because let’s face it, a lot of relationships do break down), will reduce a lot of emotional and financial turmoil in your life.
A cohabitation property agreement ensures that you and your partner will know your obligations, entitlements and responsibilities in the event of your breakup.
This is particularly important for people who may be entering a relationship in later years after they have amassed a wealth of their own.
A common law marriage agreement, or cohabitation agreement, must be entered into before you have been living together for two years. After you have been living in a marriage-like relationship for two years or more, then the BC Family Law Act applies and you face property division regardless of whose name the property is registered in. This is why we highly recommend that if this is you, you speak to a cohabitation agreement lawyer and that you do it well before the “two-year” mark. This might be a difficult conversation to have with your partner, however, we always say that if your partner refuses to have the conversation or enter into such an agreement, and it ends up breaking you up, you dodged a bullet.