Monthly Archives: October 2015

“Pre-nups”, Cohabitation Agreements and Marriage Contracts

From time to time we are retained to prepare a “pre-nup” for a client.  This term is in common use among clients, and in full it means a “prenuptial agreement” (an agreement made prior to marriage).  In practice, however, it means any agreement that a couple may wish to make to set out their rights and obligations towards each other by means of a binding contract rather than relying on the general law that applies if there is no agreement.

These agreements can cover both married and unmarried (common-law) relationships, and they can be made prior to moving in together or marriage or at some point after the commencement of the married or common-law relationship.

Like any type of contract, the goal is to establish both partners’ rights and obligations so as to provide both partners with certainty and predictability in the event of the termination of the relationship. While that does not sound very romantic, the truth is that all relationships eventually come to an end in one of three ways:

  • There is a relationship breakdown (one or both partners actively terminate the relationship because they don’t want to be in it anymore).
  • One of the partners becomes incapacitated.
  • One of the partners dies.

These kinds of agreement are particularly useful for dealing with property issues.  For example, you can use an agreement to:

  • Preserve certain property that was originally yours from claims by your partner.
  • Determine how increases in value to property will be dealt with. (Will it be shared or will an increase in value be only for the benefit of the person who is the legal owner?)
  • Determine how you will acquire new property.  (Will it be in the name of one of you or both of you?)
  • Determine how property will be disposed of during the relationship. (For example, who gets the proceeds of any sale?)
  • Determine how property will be dealt with at the end of the relationship.  (This may be different depending on whether the reason for the termination of the relationship is a breakdown, incapacity or death.)

You can also use this kind of agreement to deal with issues involving children and financial support for your partner.  For example:

  • What is the plan if you have a child or children together?  (Will one of you be staying home to raise the child?  If so, for how long?  What about the financial effect that staying home may have on the ability of that parent to earn income in the future?)
  • What is the plan if there are children from a prior relationship?  (Is the “step-parent” going to function like a parent or not?  Will he or she be expected to contribute directly or indirectly to the financial care of the child?)
  • What are the plans for work and home life?  (Will both of you be working, or will one person stay home?)
  • If there is a relationship breakdown, how will each partner support himself or herself in the future?

Finally, It is important to note that lawyers play a vital role in ensuring that any agreement of this type is binding and enforceable.  The lawyer contributes two very important things:

  • The agreement is in writing, and is both clear and comprehensive.  While clients often attempt drafting these agreements themselves, the result is rarely clear and comprehensive.  This is for good reason:  lawyers have the specialized training to identify, analyze and advise you on all of the legal issues discussed above, and many more. Normally, a lawyer is retained by one of the partners in the relationship to produce the first draft of the agreement.
  • The agreement is signed with both partners having independent legal advice before signing. Many a time I have heard clients express dismay that a second (and independent) lawyer needs to be involved.  Obviously there is some additional expense involved, but it is for the important goal of ensuring that neither party can ever say in the future, “I didn’t understand what I was signing”, or “I had to sign the agreement – I didn’t have a choice”.  Having independent legal advice on both sides effectively prevents this sort of problem from arising because it is the lawyer’s job to clearly explain and provide advice about every aspect of the agreement so that the client makes the active and informed decision whether to sign the agreement. (We’ll have more to say about independent legal advice in a future blog post.)

This blog post discusses the law in Alberta relating to these issues but it is not intended to be legal advice for any particular situation.  If you want legal advice, then meet with a lawyer so that you can get it.

(photo “DIY Prenup Photoshoot – Fort Canning Park” by Bambi Corro III is licensed under CC BY-ND 2.0)

The Roles and Responsibilities of Client and Lawyer

handshake3An effective lawyer-client relationship is based on mutual trust and respect. To have this trust and respect, both client and lawyer need to understand each other’s roles and responsibilities.  These roles are very different, but the are complementary to each other.  Here is how we see it at Patriot Law.

 

The client’s role and responsibilities

The client is the person who makes the important decision that he or she requires a lawyer for some reason.  The client hires the lawyer and gives the lawyer his or her instructions.  For example, the lawyer may be hired (or, as lawyers sometimes say, “retained”) to represent the client in a real estate transaction as buyer or seller, or a court case, or preparing a Will.

The client’s role is to make all of the important decisions in a legal matter.  For example, it is the client’s role to:

  • decide whether to enter into a contract (or to breach a contract, for that matter);
  • decide who to name as executor of the client’s Will;
  • decide whether to commence divorce proceedings;
  • decide whether to start a lawsuit, or defend against a lawsuit in which the client is named as a defendant; and
  • decide whether to settle a lawsuit, and on what terms.

In working with a lawyer, the client is responsible to do two major things:

  • make the key decisions (such as those noted above) when required; and
  • provide the lawyer with the information (and records) necessary to understand the facts applicable to the legal matter.

The lawyer’s role and responsibilities

The lawyer brings to the table legal knowledge and expertise that the client does not have have.

The lawyer’s role is to provide the client with two main things:

  • Advice as to what law applies to the factual situation that the client brings forward, how that law applies to the client’s facts and what client should do to address the legal issue or problem; and
  • If the client requests it, representing the client by taking certain actions on the client’s behalf.  This may be representing the client in a court case, where the lawyer literally speaks on behalf of the client to the Judge.  It can also mean taking a client’s wishes for how to deal with his or her estate and putting it on paper in a Will that will ensure that the client’s intent is achieved.

In working with a client, the lawyer is responsible for many things, including:

  • being knowledgeable about the law (in the areas in which the lawyer practices, of course);
  • being thorough and analytical in applying the law to the client’s factual situation;
  • being practical is making recommendations on courses of action and the consequences of those courses of action; and
  • being ethical and civil in dealing with the client as well as others such as an opposing party, the court and the public in general.

Synergy between lawyer and client

More than anything else, the key to having an effective relationship is for both lawyer and client to realize that their relationship is dynamic and requires open, effective and honest communication,  The lawyer cannot do his or her best job unless the client is forthcoming about the facts, even if they may be unpleasant or embarrassing.  On the other hand, the lawyer must help the client to understand what kinds of information or facts are important in a given case.

The best client-lawyer relationships are characterized by very effective communication. This creates the best conditions in which mutual trust and respect develop and are maintained.

There are limits on what a client can require a lawyer to do.  This will be the topic of a future blog post.