Building a mystery in the magazine business since 2011.
By Lynn Larson Armstrong
Sunday, December 23, 2012
December SKY: Pre-nuptial or Co-habitation Agreements
Protect your assets with a Pre-nuptial or Co-habitation Agreement
by Ruth Pradzynski
Pre-nuptial agreements are uncomfortable things for people to think about. “If we enter into a Pre-nuptial agreement are we jinxing our marriage – assuming that it isn’t going to work?” But there are a number of situations in which a Pre-nuptial agreement or a Co-habitation agreement are simply a must.
1. When entering a relationship in which one person has significantly more assets than the other.
Let’s say that Shelly (23) has invited Mike (25), her boy friend, to move in with her. Shelly has already purchased her first home, with the gift of the down-payment from her parents. They aren’t getting married – they’re just “trying out” their relationship.
Saskatchewan has now changed the definition of “spouse” in a number of it’s statutes, to include “common law spouse” – being defined as either an opposite sex or same sex partner who has resided with the person for a period of at least two years. Supposing the relationship breaks down after 2 ½ years; Mike can now claim 50% of the equity in the “matrimonial home” – the house where they lived together -- under the Family Property Act, and it is a very strong presumption under that Act that the home is shared equally, regardless of the contribution of each party.
2. In a second marriage or second relationship, in which there are children from the first marriage.
I have recently seen a number of situations in which the wife of an older couple dies, and the husband re-marries a year or so later. In many cases, without a pre-nuptial agreement, what the husband is effectively doing, is cutting off the inheritance of his children from his first marriage. If he pre-deceases his new spouse, (which is quite likely to happen), irrespective of the terms of his will, his wife is entitled, under the Dependants Relief Act, or the Intestate Succession Act, to the first $100,000 of value from the estate, and one third of the rest of the estate. For a marriage of short duration, this can seem quite unfair to the family, and can lead to bitterness and hard feelings.
These problems can be eliminated by the use of a well drawn Pre-nuptial or Co-habitation agreement.
Ruth Pradzynski is a lawyer with 30 years experience practicing with A.R.E. Law