The divorce rate in Ontario is often exaggerated, and although it is not fair to say the majority of marriages break up, divorce must be considered as a possibility. For many young and in-love couples, it is so difficult to talk about the possibility of a divorce and how they would protect their assets, that discussions about marriage agreements are avoided altogether. However, there are other ways to protect individual assets even before a potential marriage partner is in the picture.
Asset protection planning can be done by a person long before the wedding, or by a couple intending to get married. A person can prevent any future ex-spouses or their children from previous relationships from claiming his or her assets. This can be done by transferring property into asset protection trusts before the wedding. Similarly, rather than drafting a prenuptial agreement for protection, newly wed couples can establish trusts to look after their individual assets.
All financial gifts or inheritances can go straight into a trust, preventing the possibility of it commingling with marital assets. If it is in a personal trust of one spouse, it will not be regarded as marital assets if there is a divorce. Putting real estate into a trust before the wedding will not require adding a new spouse’s name to the deed, but the spouse could be named a beneficiary to receive it in the event of the property owner’s death. Putting property in a trust removes ownership from the individual, and it will become the property of the trust.
For some Ontario couples, being able to protect assets without having uncomfortable discussions about marriage agreements is the way to go. However, divorce is a possibility every married couple faces, and regardless of whether a prenuptial agreement is in place or not, the skills of an experienced divorce lawyer may protect the rights of a spouse in divorce. A seasoned lawyer can also make sure that one receives fair treatment in the property division process. Source: kiplinger.com, “Strategically Thinking About Divorce“, Andrew Bass, April 5, 2017