July 27, 2023 | Divorce

Prenups In Quebec

We heard of it in movies, social media and from long-distance family gossip. But what exactly are prenups and are they applicable in Quebec?

What Are Prenups?

The term prenup (coming from prenuptial agreements) also referred to as “premarital agreements” or “antenuptial agreements”, is a contract between two individuals written before getting married or to change the matrimonial regime during marriage. The goal is for the soon-to-be newlyweds to decide on how to split their assets in the unfortunate event of a future divorce. No, this is not romantic. A common example of why couples would sign a prenup would be that one spouse has a much higher income than the other.

In many countries around the world, a prenup is usually permitted and enforceable, subject to specified conditions. In common law provinces of Canada, prenups have been permissible since the 1978 Family Law Reform Act. The prenups must be written, signed by the couple and witnessed. It could include any matter from partition of assets to support obligations to gifts, however the court reserves its rights to intervene if a provision is contrary to public order or truly unreasonable.

Do We Have Prenups In Quebec?

In Quebec, we don’t have prenups per say, but we have marriage contracts in order to derogate from the default regime, namely the partnership of acquests. Let’s unfold the steps and options in the occurrence of a divorce for a better comprehension.

Family Patrimony

Jon and Jeff were very in love and decided to get married. After a couple of years however, they were not seeing eye-to-eye to the point of no return.

First, there is the equal partition of the family patrimony’s assets, owned by either one of them. This basket includes:

  1. Family’s residences and secondary residences, save and subject to nuances;
  2. Furniture and any movables decorating and used at those residences;
  3. Benefits of retirement plans, such as RRSP, pension plans, and Q.P.P. (all from date of marriage to date of separation);
  4. Private pension plan;
  5. Family’s vehicles;

Some precisions must be noted. The residences must be for the use of the family specifically. For example, if Jon owns a house and uses it as a rental property, it is not included in the family patrimony. The same logic applies to vehicles. They need to be used for the purpose of the family, such as a van for family camping trips. If only Jeff uses the Toyota Matrix to go to work, it is not included in the family patrimony basket.

Moreover, the split must be made on the accumulated value of those assets from the marriage day until separation. To illustrate that, let’s say that Jeff owned a house valued at $400,000 before their wedding day. They then decided to use that house as a family residence. When they separated, the house was evaluated at $450,000. That means it took $50,000 in value during the marriage period. Under family patrimony, only that $50,000 portion will be partitioned equally. The initial $400,000 value remains with Jeff. The same goes for RRSP accounts, only the value accumulated during the marriage must be shared. All of that is however subject to evidence, hence the importance of keeping track and proof of assets ownerships and value before and during marriage.

Whether Jon and Jeff signed a marriage contract or not, the family patrimony regime will be applicable nevertheless. The only way to derogate to that would be to renounce their rights on those properties after separation.

Matrimonial Regimes

After the family patrimony’s assets have been divided, then we need to tackle the remaining assets which fall under the matrimonial regimes. In Quebec, there are three matrimonial regimes to choose from: 1) partnership of acquests, 2) separation as to property and 3) community regimes. The third one won’t be explored at this time as it only applies to couples married before July 1st, 1970.

Partnership of acquests is the regime by default, meaning that if couples do not sign anything before or during the marriage, that regime will be applicable to them at the time of their separation. The assets under that regime are categorised by private property or acquests.

  • Private property consists of assets, including but not limited to, the value of properties owned before marriage, and any inheritances, donations, gifts, clothes, diplomas, wedding rings and personal papers. At separation, the private property assets are kept by their respective owner.
  • Acquests include everything not described as private property, all the proceeds from both spouses work and all the fruits and income collected from the spouses private property and acquests during marriage. They are subject to being shared equally.

The second regime is separation as to property. Under that regime, each spouse will remain owner of their respective assets in the event of a separation, whether assets were accumulated before and during marriage. This must be done by notarial act that is registered with the Chambre des notaires. If they are unable to decide who has ownership, most likely that asset will be split equally.

What About Marriage Contracts?

As mentioned before, having a marriage contract won’t affect the patrimonial regime. The couple can, however, decide on their own rules regarding all the assets held in the matrimonial regime. The marriage contract must be notarized en minute stating all the elements.

As an example, the house used as rental property was purchased and managed solely by Jon during the marriage. Under the partnership of acquests regime, an equal split of the property value and its fruits and income must be made a separation. By writing a marriage contract, Jon can decide to keep the whole value of the property and its proceedings in the event of a separation.

It is important to keep in mind that marriages can be difficult when lasting a lifetime. It is not always fifty-fifty all the time. Jon will give more for a period of time and later on, it will be Jeff’s turn to give more. Giving is not only about financial means, but also emotional support, doing house chores, taking care of the children, sacrifices, etc. As per art. 396 of the Quebec Civil Code, each spouse can contribute in proportion to their respective means, which can include their activities within the home. That aspect could and will be considered when separation occurs in the context of unjust enrichment of spousal support depending on the facts.

For more:

https://www.international-divorce.com/prenuptial-agreements-in-canada

https://www.quebec.ca/en/famille-et-soutien-aux-personnes/couple-famille/mariage-union-civile-ou-union-de-fait/marriage/steps/contract