Financial Disclosure Before Signing a Prenup in British Columbia

If your partner has handed you a prenup and a pen, one of your first questions should be: do I actually know what they own and owe? An agreement that divides property and debt is only as fair as the information behind it.

This article explains how British Columbia's Family Law Act treats disclosure, what you can reasonably ask for, and what may happen later if the other side left something out. It is general information, not advice on your situation.

This article covers the law of British Columbia.

What the Family Law Act says about disclosure

The Act lets spouses make agreements about dividing property and debt, despite the usual rules in Part 5. It also lets them divide family property and family debt equally or unequally. That freedom is the reason disclosure matters: you may be agreeing to give up a share you would otherwise have.

Without an agreement, spouses are presumptively entitled to family property and responsible for family debt, with each having a right on separation to an undivided half interest in family property, subject to an agreement or order that provides otherwise.

The Act does not set out a disclosure form. What it does is give the court power to act later if a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement.

What information is worth asking for

The Act speaks of significant property and debts and of information relevant to the negotiation. In practice, that points to anything that would change how you view the deal. Common items to ask about include:

• Real estate, including any mortgages and the current value
• Bank, investment and retirement accounts
• Business interests, including ownership share and debts of the business
• Loans, credit cards, lines of credit and any money owed to family
• Income, such as recent tax returns and pay records
• Expected inheritances or trusts that you know about

Why this matters in detail: spouses may agree to exclude items that would otherwise be included, such as a business or a home, or to include items that would not otherwise count, such as an inheritance or a pre-marriage asset. They may also agree to value property differently than the default valuation would. Each of those choices depends on knowing what the asset is worth.

If the other side hid assets or debts

For a written property agreement with each spouse's signature witnessed by at least one other person, the Supreme Court may set aside or replace all or part of it on a spouse's application, but only if one of the listed circumstances existed when the agreement was made. Failure to disclose significant property or debts, or other relevant information, is one of those circumstances.

Non-disclosure is not the only route. The court may also act where a spouse took improper advantage of the other's vulnerability, or where a spouse did not understand the nature or consequences of the agreement. Hidden information can overlap with these.

There is a limit. Even if a ground is proven, the court may decline to act if, on all the evidence, it would not replace the agreement with an order substantially different from the agreement's terms. A hidden asset that would not have changed the result may not lead to a different outcome.

If nothing was hidden but the deal turns out badly unfair, the court may still set aside or replace all or part of the agreement if it is significantly unfair. It considers the time since the agreement was made, the spouses' intention to achieve certainty, and how much they relied on its terms.

Spousal support, children and disclosure

A spouse may agree to release the other from spousal support. For a witnessed spousal support agreement, the court may set it aside or replace it if, when it was made, a spouse failed to disclose income, significant property or debts. Income disclosure is therefore especially relevant if a support waiver is in the draft.

Child-related terms are different. An agreement about child support is binding only if made after separation, or when the parties are about to separate and intend it to take effect on separation. Parenting arrangements follow a similar rule. Terms about children in a prenup should not be treated as settled.

What to do before you sign

• Ask in writing for a list of assets, debts and income, with supporting documents.
• Prepare your own list and share it, so both sides are working from the same picture.
• Compare the documents against what you were told; ask about anything missing.
• Make sure the agreement is in writing, signed by both of you, and that each signature is witnessed by at least one other person.
• Keep copies of everything exchanged, with dates.
• Get legal advice before signing. The Province advises it, although the Act does not make a lawyer or independent legal advice a condition of validity.

If you have already signed and think something was hidden, collect the documents and speak to a family lawyer promptly. Whether a particular omission is significant, and whether a court would change the result, depends on the facts.

Frequently asked questions