What Happens If Your Prenup Isn't Enforceable in Alberta?

You may have signed a prenup or marriage agreement and now wonder whether it will actually hold up. Or you may be on the other side, hoping an agreement will not be enforced. Either way, the key question is what happens to your property if the agreement fails.

In Alberta, the answer depends on the Family Property Act. This article explains common reasons an agreement fails, what rules take over, and how a failed agreement can still matter. It does not repeat a signing checklist. A lawyer can look at your actual documents and facts.

This article covers the law of Alberta.

When an agreement replaces the default rules, and when it does not

Part 1 of the Family Property Act, the default division rules, does not apply to property covered by a subsisting written agreement between spouses or adult interdependent partners that is enforceable under section 38. So an agreement that meets section 38 replaces the default rules for the property it covers.

The reverse is also true. If an agreement does not meet section 38, it does not displace Part 1, and the default rules can apply. Enforceability turns on sections 37 and 38.

Common reasons an agreement fails

• Missing or defective acknowledgments. Each party must acknowledge in writing, apart from the other party, that they know the nature and effect of the agreement, understand their possible future claims and intend to give them up as the agreement provides, and are signing freely and voluntarily.
• Wrong lawyer. Each acknowledgment must be made before a lawyer other than the lawyer acting for the other party. This is the Alberta statutory form of independent legal advice for property agreements.
• No statement that it continues after the wedding. An agreement made before marriage is unenforceable after the marriage unless it is clear that the parties intended it to apply or continue to apply after the marriage.
• A void marriage known to one party. An agreement is unenforceable by a spouse who, when it was made, knew or had reason to believe the marriage was void. The same applies to a person who knew or ought to have known there was no valid adult interdependent relationship.

A marriage that is void or voidable still counts for the Act's definition of spouse, but the knowledge exception in section 37(4) still applies.

What the default rules look like

For property acquired during the marriage that is not exempt, the Court shall distribute it equally between the spouses unless it would not be just and equitable to do so. In this Act, the Court means the Court of King's Bench.

Exempt property is treated differently. Exempt property, such as gifts from third parties, inheritances and property acquired before the marriage, is excluded at its market value on the applicable date. The Court distributes any increase in value of that exempted property up to the time of trial in a just and equitable manner. Whether a particular asset is exempt depends on your facts, so it is worth confirming with a lawyer.

Can a failed agreement still matter?

Yes, in a limited way. Even when an agreement does not meet section 38, the court can consider the terms of an oral or written agreement between the spouses as one factor under section 8(g). It sits alongside other matters, such as each spouse's contribution to the marriage, the length of the marriage, each spouse's income and property at marriage and at trial, and dissipation of property. The court may also consider any fact or circumstance that is relevant.

A failed agreement is therefore not automatically ignored, but it is no longer binding. How much weight it carries depends on the facts.

Arguments that an agreement was unfair, or that one side did not disclose finances, are different. The Act has no separate section giving a judge a general power to set aside a compliant agreement as unfair. Those arguments come from case law, so they depend heavily on the facts and are worth discussing with a lawyer.

Older agreements and time limits

Agreements signed before the current rules came into force are judged by the rules in force when they were made. Property agreements that were enforceable under the earlier law when signed remain enforceable.

If you need the court to divide property, a spouse may apply only if a condition is met, such as a divorce judgment or living separate and apart for at least one year immediately before the application. For the one-year-separation and dissipation grounds, the application must be commenced within 2 years after the spouses separated, and a single reconciliation period of up to 90 days is excluded. The application is made by statement of claim. Transfers or gifts made to defeat a claim have a different deadline: 2 years after separation or 1 year after the transfer or gift, whichever is earlier.

What to do next

• Gather the agreement, any acknowledgments and the names of the lawyers who signed them.
• Note the date you signed and whether it was before or after the marriage.
• List your property by category: acquired during the marriage, inheritances, gifts and pre-marriage assets.
• Record your separation date, since time limits may run from it.
• Ask a lawyer whether the agreement meets sections 37 and 38 before you rely on it or challenge it.

Frequently asked questions