Couple designs prenup to manage expectations and protect assets
Stephan, an entrepreneur who founded a growing fintech company, and Clarissa, a marketing executive at her family’s real estate and property development company, eventually decided in favor of a prenup and consulted a lawyer for details. The first key piece of advice they received: each should arrange separate representation to avoid a conflict of interest and to ensure that each individual’s best interests are properly addressed.
Here are some reasons Clarissa and Stephan decided to move forward with a prenuptial agreement:
- To make practical, thoughtful and equitable plans while they are most happy together.
- To help understand each other’s needs, goals and concerns before marriage.
- Protect each other from an unfair settlement in the case of separation and/or divorce.
- Protect Stephan’s business interests.
- Protect Clarissa’s family interests to ensure Stephan doesn’t become an ‘unwanted business partner’.
- Protect other assets such as family heirlooms, other property, other major items like cars. It can also specify who would get any wedding gifts and general gifts given to the couple during the marriage. It could also stipulate what is excluded.
- Address debt obligations. A prenup can specify who would be responsible for any debt accumulated during the marriage. Stephan’s business is highly leveraged as it is in the start-up phase.
- Address spousal support in the event of a marriage breakdown. A prenup cannot include child support or child custody issues.
- Ultimately, a prenup would allow both Clarissa and Stephan to leave the marriage if it isn’t working and, ideally, avoid any revenge-fuelled decisions and a drawn-out legal battle.
Clarissa and Stephan’s prenuptial/marriage agreement itemized the couple’s property and separate assets held before they married. These items included savings accounts, investment/retirement accounts, the commuted value of any defined benefit pension plans, real estate assets, debt, and other assets of material value (e.g., artwork, vehicles, etc.).
While they each determined their net worth (i.e., assets less liabilities) were similar at just under $750,000, the composition of this net worth was drastically different. Most of Stephan’s net worth was represented by his corporation while Clarissa’s was a combination of liquid financial assets such as savings and investment/retirement accounts as well as equity she has in her downtown condo.
Clarissa’s family were wholly supportive of her decision, seeing it as necessary to protect the growing family business of which Clarissa is currently a minority shareholder. Her family’s plan is for her and her brother Julian to one day take over the business when the parents retire.
Quebec residents must seek the advice of legal counsel practicing civil law in Quebec for any matters concerning family law. The province of Quebec is regulated by its own rules according to the Civil Code of Quebec.
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