British Columbia Law

Prenups and Marriage Agreements for Professionals and Business Owners in BC

By Andrew Liggett, Sea to Sky Law, New Westminster, BC

A marriage agreement — what most people call a prenup — is one of the most effective legal tools available to a professional, business owner, or person of significant assets who is entering a marriage or long-term relationship in BC.

Done correctly, it can protect a business, a professional practice, an inheritance, or pre-relationship assets from division if the relationship ends. Done poorly, it can be set aside entirely, leaving both parties worse off than if they had never signed one.

This guide explains what BC law requires, what a marriage agreement can and cannot accomplish, and why getting it right from the start matters far more than simply having one.

What Is a Marriage Agreement Under BC Law?

In BC, the Family Law Act (FLA) governs all agreements between spouses about property and support. A marriage agreement (also called a prenuptial agreement or, if made after marriage begins, a postnuptial agreement) is a contract that specifies:

• How family property will be divided if the relationship ends
• What property will be treated as excluded (protected) and what will be shared
• Whether and how spousal support will be paid
• Any other financial arrangements the parties agree on

A cohabitation agreement serves the same purpose for couples who are living together without marrying. Under the FLA, couples who live together in a marriage-like relationship for two years or more have substantially similar property rights to married spouses — so a cohabitation agreement is equally important for professionals and business owners in common-law relationships.

Why Professionals and Business Owners Need One

Without a marriage agreement, BC's default rules apply: family property — including the increase in value of a business, professional practice, or investment portfolio accumulated during the relationship — is divided equally. Even if you started your practice before the relationship began, its growth in value during the marriage is family property.

A marriage agreement can:

• Exclude a pre-existing business entirely, including all future growth
• Protect an interest in a family trust or anticipated inheritance
• Set agreed values for complex assets so no valuation dispute arises at separation
• Establish that a professional practice will remain with the professional spouse with an agreed buyout formula
• Limit or define spousal support obligations in advance
• Provide certainty for shareholders in a professional corporation who have obligations to partners

Without this certainty, the most likely outcome on separation is expensive litigation — including contested business valuations — with an uncertain result.

What Makes a BC Marriage Agreement Enforceable?

BC courts have broad discretion to set aside or vary a marriage agreement that does not meet the requirements of the Family Law Act. The key requirements are:

1. Full Financial Disclosure

Both parties must have had full disclosure of the other's significant assets, liabilities, and financial circumstances before signing. A party who did not know — and could not reasonably have discovered — the extent of the other's wealth when they signed may have grounds to set aside the agreement later.

2. Independent Legal Advice

Each party must have had the opportunity to get independent legal advice from their own lawyer before signing. An agreement signed by both parties with only one lawyer — or with no lawyer at all — is at high risk of being set aside. The lawyer's role is to explain the agreement's meaning, what rights are being given up, and whether the terms are fair.

3. Voluntary Execution

The agreement must be signed freely, without duress, undue influence, or pressure. An agreement presented and signed days before a wedding — or signed under emotional or financial pressure — is vulnerable to challenge.

4. Formal Requirements

The agreement must be in writing and signed by both parties in front of a witness.

5. Fairness at the Time of Enforcement

Even an agreement that met all requirements when signed can be varied or set aside if enforcing it would be significantly unfair — for example, because circumstances changed dramatically in ways the parties could not have anticipated, or because one party would be left with grossly disproportionate hardship.

What a Marriage Agreement Cannot Do

• It cannot restrict or modify child support obligations — the law treats children's right to support as non-waivable.
• It cannot address custody or parenting arrangements — courts will make parenting decisions based on the child's best interests at the time, regardless of what an agreement says.
• It cannot be enforced if it was obtained by fraud, misrepresentation, or failure to disclose significant assets.

Timing: Earlier Is Significantly Better

The earlier a marriage agreement is made, the stronger its position. An agreement made before cohabitation begins, when both parties are fully independent and have had ample time to review and negotiate, is the most defensible.

Agreements made close to a wedding date — particularly where one party felt pressured to sign — face much greater scrutiny. Courts look at whether the party who gave up rights had a genuine and informed opportunity to negotiate or decline.

If you are already married or in a long-term relationship and do not have an agreement, a postnuptial agreement is still valuable — it is simply subject to heightened scrutiny because the relative bargaining positions of the parties have already been established.

What Good Process Looks Like

A well-drafted, enforceable BC marriage agreement involves:

1. Early start: Begin the process months before a wedding or cohabitation, not weeks.
2. Full financial disclosure on both sides: Each party prepares a complete list of assets and liabilities with supporting documentation.
3. Separate legal advice: Each party retains their own lawyer. The lawyers negotiate and refine the terms.
4. Enough time to consider: No agreement is signed under time pressure. Each party has a clear window to review, ask questions, and, if they choose, decline.
5. Regular review: As circumstances change — particularly on the birth of children, a significant increase in the business's value, or an inheritance — reviewing and updating the agreement ensures it continues to reflect the parties' intentions.

The Cost of Not Having One

The most common reason professionals and business owners do not have a marriage agreement is that they found the conversation uncomfortable or assumed the relationship would never end. The cost of that discomfort — if the relationship does end — is a contested business valuation, months or years of litigation, and a result that neither party controls.

The cost of a well-drafted agreement is a fraction of the cost of litigating without one.

This article is general information, not legal or tax advice. Meetings are by appointment only, by phone or secure video.