In Canada, if you don’t have a prenuptial agreement (also known as a prenup) and you get a divorce, the division of assets, debts, and other matters will generally be governed by the laws of the province or territory where you reside. Canada has a “no-fault” divorce system, which means that the reasons for the divorce typically do not affect how property and assets are divided.
Here are some key points regarding the division of assets and other considerations in the absence of a prenup:
- Equalization of Net Family Property: Most provinces and territories in Canada follow the principle of equalization of net family property. This means that, in the absence of an agreement, the increase in the value of assets acquired during the marriage is generally divided equally between spouses upon divorce. Each spouse is entitled to 50% of the net family property, which is calculated by subtracting the value of debts and assets owned at the time of marriage from the value of debts and assets at the time of separation.
- Excluded Property: Certain types of property may be excluded from the equalization calculation, such as gifts or inheritances received by one spouse during the marriage, assets owned prior to the marriage (unless they were mixed with marital assets), and certain types of damages awards.
- Spousal Support: In addition to the division of assets, one spouse may be required to pay spousal support to the other spouse following a divorce. The amount and duration of spousal support depend on various factors, including the length of the marriage, the financial needs of each spouse, and the ability to pay.
- Child Support: If you have children, child support arrangements will also need to be determined. Child support is typically based on federal and provincial/territorial guidelines and is calculated based on the income of the paying parent and the number of children.
It’s important to note that divorce proceedings can be complex, and the outcome may vary depending on the specific circumstances of your case. If you’re facing divorce without a prenup, it’s a good idea to seek legal advice from a family law lawyer who can help you understand your rights and obligations and guide you through the process.
Keep in mind that a prenup is not your only chance to make an agreement about your relationship with your partner. You can still make a relationship agreement with your partner even after you’re married. These agreements are called postnuptial agreements or marriage agreements, and they typically cover all of the same subjects as a prenup. In short, these agreements can be entered into at any point in your relationship.
If you’re ready to build a marriage agreement with your partner, click here to get started.
I founded Jointly because I want to empower more Canadians with the knowledge and tools to create relationship agreements that work for them, at a price they can afford. My big dream? That reaching more Canadians with Jointly ultimately keeps more families out of the court system when relationships breakdown, which can be slow, expensive and traumatic. (I may or may not have personal experience with this 😅)
When I'm not lawyering, I'm most likely hiking with my dogs, kayaking the coastal waters around North Vancouver, or hitting the sauna and cold plunge.
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