Prenuptial agreements have a certain air in popular thought, a lack of faith, buried tension, perhaps a less-than-equal marriage.
In some situations, the terms of a prenuptial agreement can be entirely inappropriate, said Patricia Lane, a seasoned family lawyer at Taylor McCaffrey in Winnipeg.
Yet with older couples and seniors, who are going into a new relationship with all of the family bonds and assets they have accumulated in life, a transparent agreement prior to marriage can, in fact, allay the negative emotions normally associated with prenups.
Take one retired man who came to Ms. Lane's practice.
He had considerable wealth and was somewhat older than his partner, who was still working. He wanted to travel extensively, which would have meant a life change for her. She would likely have had to leave her career, her salary and the accumulation of her pension.
"They looked at that and figured out what would be reasonable security for her, if the relationship did break down or indeed after he died, rather than just leaving all of his money to the children, because there was a family before," Ms. Lane noted.
So, the first thing Ms. Lane recommends, even before a prenuptial agreement, is for an older couple settling together to have a thorough discussion, transparent in every way, on how they plan to manage their daily finances. This process doesn't normally get written into a prenuptial agreement, but can be the foundation for one.
"Often people talk about transition costs. Do they, in fact, have sufficient money to support themselves [if the other leaves]?" Ms. Lane said. For example, with the travelling couple, what if the woman quit her job and didn't have enough income and accumulated pension if the new marriage broke down?
This can easily happen, too, with one partner's death. Sometimes the needs of the remaining spouse can be different than what is stipulated in a deceased partner's will.
"What will life be like for the surviving partner? Look at that realistically. Will there be enough money to support the surviving partner in reasonable circumstances until death?" Ms. Lane said. That's what a prenuptial agreement should address.
Some of the aversion to prenuptial contracts, she argued, arises from the assumption that they are Draconian, all-or-nothing agreements: If you leave me, you get nothing.
For someone to hold a partner financially at bay like that if a marriage were to break down would be terrible, Ms. Lane said. "It's totally inappropriate in that circumstance. And that's my advice to whatever party I'm representing, because I say, 'Are you going to build a life, or are you not going to build a life?' You don't want someone sharing your bed who resents you. Why are you getting married then?"
In other words, "it isn't that a prenuptial agreement is bad per se. It's the terms of the agreement. Are they reasonable? Do they make sense?"
Older couples are normally motivated to draw up an agreement to maintain the structure of their finances before the new relationship, such as keeping a house in one partner's name and later in that person's estate. He or she may have already spent a lifetime paying for it, so keeping sole ownership may only seem fair.
"Typically, people go into these to protect certain assets, not to equalize," said Terry Sheppard, a family lawyer at Boyne Clarke in Dartmouth, N.S.
Interestingly, this thinking can change if an older couple stays married for many decades. A longer marriage started late in life can change people's feelings about joint ownership, and that can be written into the contract.
"They might go into it, for example, saying, OK, if we're married for this period of time [a short period], then you don't get a share in this particular asset, or you don't get a share of the house. Or it might be that if we're married for 20 years, then everything is equal and the agreement is null and void," Mr. Sheppard said, indicating how specific prenuptial agreements can be. It can, for instance, grant extra conditions for allowing a surviving spouse to stay in a house owned by a deceased spouse's estate.
This reflects the general view courts tend to take, when the new marriage is long lasting. "The way the court's going to look at it, the longer you're together, the more joined your finances are," Mr. Sheppard said.
However, as with all family law, there are differences between provinces. In Nova Scotia, he noted that all assets are dragged into the marriage with you. That can be significant for people who have their own homes, retirement savings and estate plans. A prenuptial agreement can divvy those assets according to the partners' wishes, rather than by the courts.
This can be especially important when the family owns a business. Maybe the business is associated with just one partner, or maybe both partners have a stake in it, or maybe one spouse simply worked there. Just as owning a family business makes estate planning that much more complicated, it adds more impetus for drafting a prenuptial agreement with an eye on fairness, family lawyers argue.
"It makes perfect sense to not have a family business broken up over a separation and divorce. However, it doesn't make sense to exclude all income that comes from there, if the person is maybe working in the family business," Ms. Lane said. "What portion should be sharable in terms of the income, and what would make sense, at the same time protecting the company?"
And there is also the question of inheritance.
Take this scenario: A husband dies. He held his assets jointly with his wife, in both their names, so those assets then roll over to her automatically when he dies. Now, say the surviving wife remarries, and the adult children from the first marriage see some of the family assets then going to the new husband. This can be a cause of resentment or at least uncertainty within the family. A spousal agreement can help ease those worries.
"If there's a reasonable agreement in place that's meeting the needs of the new couple, and yet protecting funds for the inheritance to the existing family, it's a lot easier for them to be happier about the marriage and accepting of the new step-parent. It can make for a lot more of a harmonious relationship," Ms. Lane said.
Family lawyers note that what it's really about is transparency.
"I think these things are really good for people to think about and talk about," said Ms. Lane in Winnipeg. "The agreement per se is totally appropriate, because it allows people to have the same understanding. Otherwise, people may have very different understandings of what is going to happen. They can have very different expectations, and it can be really unfortunate."