Common Mistakes in Drafting Prenuptial Agreements

What Are the Most Common Prenuptial Agreement Mistakes in Ontario?

1. Failing to provide full financial disclosure

A prenuptial agreement is difficult to evaluate when one person does not have an accurate understanding of the other person’s finances.

Financial disclosure may include information about:

• income;
• bank accounts;
• investments;
• real estate;
• business interests;
• pensions;
• significant personal property; and
• debts and liabilities.

Disclosure should be sufficiently clear to help each person understand the financial circumstances relevant to the agreement.

This is not simply an administrative exercise. Ontario’s Family Law Act provides that a court may, on application, set aside a domestic contract or a provision if a party failed to disclose significant assets, debts, or other liabilities existing when the contract was made.  

A common problem is providing only an informal list.

For example, describing an asset as “investment account” does not necessarily reveal:

• where the account is held;
• who owns it;
• its approximate value; or
• what investments it contains.

Business interests can require additional attention. Simply stating that a person “owns a company” may not provide enough context where the business represents a substantial part of that person’s financial position.

The practical goal is clarity. Both people should have meaningful financial information before agreeing on how assets, debts, or support issues will be handled.

2. Signing the agreement too close to the wedding

Waiting until the wedding is approaching can create unnecessary problems.

A short deadline may leave limited time to:

• gather financial documents;
• identify missing information;
• obtain valuations where appropriate;
• review a draft;
• receive legal advice;
• propose revisions; and
• negotiate unresolved terms.

Wedding plans can also create practical pressure. Venues may be booked, guests may be travelling, and substantial deposits may already have been paid.

This does not mean that every agreement signed near a wedding is automatically invalid. However, a rushed process can create avoidable questions about whether there was enough time for meaningful review and negotiation.

Couples should begin discussing a Marriage Contract in Ontario early enough to deal with important issues properly.

The exact amount of time required depends on the complexity of the circumstances. A straightforward agreement involving a few assets may require a different process from an agreement involving multiple properties, corporations, trusts, pensions, or substantial international assets.

Starting early gives both people room to make informed decisions without allowing the wedding date to control the legal process.

3. Using vague, inconsistent, or incomplete language

An agreement may fail in practice because the wording does not clearly explain what should happen.

Common drafting problems include:

• undefined terms;
• inconsistent descriptions of the same property;
• conflicting clauses;
• missing dates;
• incomplete schedules;
• unclear debt responsibilities; and
• no explanation of how replacement assets will be treated.

Consider a clause stating that “all personal assets remain separate.”

What counts as a personal asset?

Does the term include investments?

Does it include future property?

What happens to assets purchased with money from a separate account?

The wording may appear simple, but its meaning can become uncertain.

Precise drafting should identify important property and explain what happens when that property is sold, transferred, refinanced, reinvested, or mixed with other funds.

The same care is needed for debt.

An agreement might state that each person is responsible for their “own debts.” However, it should be clear whether this refers only to debts existing before marriage or also includes future borrowing.

Good drafting reduces the need to guess.

4. Using a generic template without adapting it

Templates can make complicated legal issues appear simpler than they are.

A generic document may not account for:

• a matrimonial home;
• ownership of a private corporation;
• professional practice interests;
• investment properties;
• pensions;
• inheritances;
• second marriages; or
• children from previous relationships.

A template may also contain language from another province or country.

Family law is location-specific. A document found online may use terminology, legal assumptions, or procedural requirements that do not reflect Ontario law.

Another problem is internal inconsistency. People sometimes combine clauses from several templates without checking how the provisions work together.

For example, one clause may state that future property is shared. Another may say that every asset acquired in one person’s name remains separate.

Both provisions may appear reasonable when read alone. Together, they may create uncertainty.

Drafting should begin with the couple’s objectives and financial circumstances. The document should then be structured around those facts.

5. Ignoring independent legal advice

An agreement can have long-term financial consequences. Each person should understand what the document says and how the proposed terms may affect them.

Independent legal advice allows each person to receive advice based on their own interests.

This is different from asking one lawyer to explain the agreement to both people as though their interests are identical.

A drafting lawyer may prepare an agreement based on one client’s instructions. The other person should have a meaningful opportunity to obtain separate advice about:

• the meaning of the terms;
• the rights affected by the agreement;
• potential financial consequences;
• unclear or unusual provisions; and
• proposed changes.

Ontario’s Family Law Act identifies lack of understanding of a domestic contract’s nature or consequences as another circumstance a court may consider on an application to set aside the contract or part of it.  

Independent advice is therefore not merely about completing a step. The process should help each person understand what they are being asked to sign.

6. Drafting terms that are unrealistic or too one-sided

An agreement should be based on the couple’s actual circumstances and objectives.

Problems may arise when terms:

• create extreme financial outcomes;
• impose obligations that are difficult to perform;
• assume circumstances will never change;
• ignore major differences in financial knowledge; or
• do not reflect what the parties discussed.

The issue is not that every agreement must divide everything equally.

Couples often consider a marriage contract because they want arrangements that differ from the results that might otherwise apply. The problem arises when drafting becomes disconnected from the parties’ real circumstances or intentions.

For example, an agreement may require one person to make a large payment by a fixed date without explaining what happens if the relevant property cannot be sold.

A more practical agreement may address:

• how the payment will be calculated;
• when it becomes due;
• what documents are required;
• whether payment can be made in instalments; and
• how a disagreement about value will be resolved.

Practical drafting asks whether the terms can actually be understood and followed.

7. Failing to meet Ontario’s signing requirements

Even carefully negotiated terms must be properly documented.

Under Ontario’s Family Law Act, a domestic contract is unenforceable unless it is:

1. made in writing;
2. signed by the parties; and
3. witnessed.

Before signing, the parties should review the complete final document rather than relying on an earlier draft.

A practical signing checklist includes confirming that:

• names are correct;
• all pages are present;
• schedules and attachments are complete;
• asset descriptions are accurate;
• final revisions have been incorporated;
• there are no unresolved comments or placeholders; and
• the signing and witnessing process is properly completed.

A signed document should represent the final agreement the parties actually intended to make.

How Can Couples Avoid Problems When Drafting Prenuptial Agreements?

The safest approach is a deliberate process that gives both people enough information and time to make informed decisions.

A practical drafting process can be divided into six steps.

Step 1: Start the process early

Early preparation creates time to identify the real issues.

The first discussion does not need to settle every clause. It should identify:

• why the couple wants an agreement;
• which assets or obligations matter most;
• what information must be gathered; and
• which issues may require further advice.

Starting early also separates the drafting process from immediate wedding pressure.

Complex financial circumstances may require additional time. Business interests may need supporting records. Real estate ownership may require clarification. Pension information or international property may also take time to organize.

The process should be driven by the issues, not by an artificial rush to sign.

Step 2: Define the couple’s actual goals

A marriage contract should solve specific problems.

Before drafting detailed clauses, it is useful to identify what the parties are trying to address.

Possible objectives include:

• protecting property owned before marriage;
• addressing future property acquisitions;
• dealing with business interests;
• allocating responsibility for certain debts;
• considering spousal support;
• addressing anticipated inheritances; or
• coordinating the agreement with broader estate-planning goals.

A couple may have several objectives, but each should be clear.

For example, “protect the business” is too general to guide detailed drafting.

A better discussion asks:

• Which company is involved?
• Who owns the shares?
• Is future growth important?
• Will either spouse work in the business?
• Could family money be invested?
• What happens if the business is sold or reorganized?

Specific goals lead to more precise terms.

Step 3: Exchange complete financial information

The parties should organize relevant financial information before finalizing substantive terms.

Depending on the circumstances, this may include:

• income information;
• bank and investment statements;
• real estate details;
• mortgage and credit information;
• business ownership records;
• pension information; and
• significant debts.

The purpose is to create a reliable financial picture.

Ontario’s family court guidance describes financial disclosure in the litigation context as information about finances, including income, expenses, assets, and debts, supported by applicable documents. While a prenuptial agreement is not the same as a family court proceeding, that broader concept illustrates the importance of accurate financial information when significant rights are being considered.  

The information should also be understandable.

A list containing only account numbers may not show the value or nature of the assets. Conversely, a total figure without identifying the underlying property may be too vague.

Good disclosure supports informed negotiation.

Step 4: Draft terms for real-life situations

A strong agreement should be tested against realistic events.

For each important asset or obligation, ask:

• What happens if it increases in value?
• What happens if it is sold?
• What happens if it is replaced?
• What happens if both spouses contribute?
• What happens if ownership changes?
• What happens if new debt is connected to the asset?

Consider a rental property owned before marriage.

The agreement may need to address more than ownership. Depending on the couple’s objectives, relevant questions could include:

• Who receives rental income?
• Who pays expenses?
• What happens to mortgage reduction?
• How are renovations funded?
• What happens to the sale proceeds?
• How is a replacement property treated?

Not every agreement needs to answer every imaginable scenario. The goal is to address circumstances that are reasonably connected to the couple’s finances.

Step 5: Allow separate legal review and meaningful negotiation

A draft should not move directly from preparation to signature.

Each person needs time to:

• read the complete document;
• ask questions;
• understand financial consequences;
• obtain separate legal advice;
• propose revisions; and
• consider the final wording.

Negotiation does not necessarily mean conflict.

A proposed revision may reveal an ambiguity that neither person originally noticed. Clarifying that issue can improve the final agreement for both parties.

The process should also preserve clear versions of the document. When several drafts are exchanged, everyone should know which version is final.

Last-minute handwritten changes or unexplained edits can create unnecessary confusion.

Step 6: Review the complete final version before signing

Before execution, review the agreement from beginning to end.

Confirm that:

• legal names are correct;
• dates are accurate;
• assets are properly identified;
• financial schedules are complete;
• defined terms are used consistently;
• cross-references point to the correct clauses;
• negotiated changes appear in the final version; and
• no conflicting provisions remain.

The signing process should involve the final document, not a partial copy or an earlier draft.

6-Step Prenuptial Agreement Drafting Process

1. Start early and avoid wedding-related time pressure.
2. Define the objectives the agreement needs to accomplish.
3. Exchange meaningful financial information about assets and debts.
4. Draft for realistic future events, not only current circumstances.
5. Allow separate legal review and genuine time for negotiation.
6. Check and properly execute the final agreement before signing.

 

Frequently Asked Questions  

Can a prenuptial agreement be set aside in Ontario?

Yes. A court may set aside all or part of a domestic contract in certain circumstances, including significant non-disclosure or lack of understanding.

Is a prenuptial agreement valid without independent legal advice in Ontario?

Independent legal advice is not one of the statutory signing formalities, but separate advice can help each person understand the agreement and its consequences.

What happens if someone hides assets before signing a prenuptial agreement?

Significant non-disclosure can create serious legal risk and may support an application to set aside all or part of the domestic contract.

Can an Ontario prenuptial agreement be changed after marriage?

Yes. Spouses may amend or replace arrangements, but changes should be properly documented and comply with Ontario’s applicable requirements for domestic contracts.