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鈥淎t first I thought the whole idea of a pre-nup was a little bit unnecessary, but then it was something that was important for his family,鈥� Felippe says. 鈥淎nd considering that we were so young when we got married, I can understand where that came from.鈥�

The couple ultimately听decided to create a pre-nup that reflected their mutual goals for the relationship.

The pre-nup 鈥�听a听legally binding contract outlining how a couple’s assets and debts will be divided if the marriage ends, either by divorce or death 鈥斕齣s growing in popularity among generation Z, those born between 1997 and 2012, according to Statistics Canada. More than half (52 per cent) say they would want their partner to sign a pre-nup before marriage or entering a common-law relationship, compared with 31 per cent of Canadians across all age groups.

Younger generations have been hit hard by 鈥渉ousing prices, interest rates, the ongoing cost of living and disparity between what costs are and what people are actually making,鈥� says Caitlin O鈥橤arr, associate lawyer at Shulman & Partners LLP.

As a result of this economic storm, they鈥檙e increasingly focused on financial transparency and protecting their assets, she says.

Given the high cost of housing, many young adults are also receiving substantial financial gifts from their parents.

鈥淲hen you鈥檙e accepting a large gift from loved ones, you might put a little more thought into risking their money, so to speak, than your own, and be more inclined to draft a contract and put some formal arrangement in place, either because you feel like you should or because your family has requested that you do that in the context of giving you that help,鈥� O鈥橤arr says.

The total cost of securing a pre-nup typically ranges from $3,000 to $5,000, which would include negotiation, financial disclosure, drafting the agreement with some revisions, and execution, O鈥橤arr says.听

Here鈥檚 what you need to know if you’re considering a pre-nup:

Tailor your pre-nup to your unique circumstances

A pre-nup 鈥� legally referred to in Ontario as a marriage contract 鈥� can help couples avoid default provincial rules that govern the division of assets and debt in the event of separation or divorce, says Nicole Ewing, principal of the Wealth Planning Office at TD Wealth. For common-law couples, a cohabitation agreement can serve a similar purpose.

It鈥檚 鈥渁n opportunity for people to define what their relationship will look like going in, to share their goals, to get on the same page and to define what the rules are going to be,鈥� she adds.

鈥淚 like to say to everybody, you already have a pre-nup or a marriage contract, it鈥檚 just been written by the government for you. So this is your opportunity to say what works for you.鈥�

Not all assets are treated equally

One key default rule, without a pre-nup in Ontario, is that the matrimonial home is considered an asset that鈥檚 divided equally upon divorce, Ewing says, even if one spouse brought that home into the marriage.

This differs from an investment portfolio built by one spouse before the marriage 鈥� this is considered a separate asset that can be kept after the divorce.

It鈥檚 important for couples to 鈥渦nderstand that the assets they have are treated quite differently than they might expect,鈥� Ewing says.

Thirty-three-year-old Logan Beatty, a resident of Saskatoon, Sask., cautions other Canadians to learn from his experience and get a pre-nup before marriage if they wish to keep family gifts or specific financial contributions to housing.

According to Beatty,听he paid the entire $120,000 down payment on the first home he shared with his soon-to-be ex-spouse. The couple bought a larger house just over a year ago, but are now heading for divorce. Several months before his ex filed for divorce, Beatty received a $50,000 monetary gift from his father, which he says he used to pay down the mortgage on their new home. He now regrets not having a pre-nup to protect those financial contributions.

鈥淚 feel a bit guilty that half of that (gift) is now going to an ex-spouse,鈥� Beatty says.

Express shared values

Felippe and her spouse also used their pre-nup to reinforce their shared values around lifelong commitment. As a deterrent to infidelity, they included a $200,000 penalty for cheating.

Infidelity clauses are generally not considered enforceable in Canada, says Ewing. (Felippe鈥檚 pre-nup was signed in Brazil).

鈥淥ur family laws do not assign blame or fault when determining a spouse’s entitlement to support or division of assets,鈥� she says. 鈥淭he courts have explicitly stated that marriage contracts are not intended to enforce personal obligations such as the duty to remain faithful, and an infidelity clause would likely be considered against public policy in Canada.鈥�

鈥淣onetheless, while likely not enforceable, some people may include a clause like this as a means of communication with each other, expressing their values and expectations for the marriage.鈥�

Seek independent legal counsel

Jeff McCartney, financial planner with Objective Financial Partners, recommends that if there鈥檚 a financial disparity between partners, the wealthier one should ensure the pre-nup is as fair as possible.

鈥淭he goal of a pre-nup should not be to cut someone out if something goes wrong,鈥� he adds.

McCartney emphasizes that pre-nups must not be overly coercive or show signs of pressure, as this can affect their enforceability. If a court finds that one spouse signed under duress 鈥� or that there was a lack of full financial disclosure 鈥� the pre-nup could be considered invalid.

That鈥檚 one reason both parties should seek independent legal counsel, he adds.

A pre-nup might feel like a big deal in the lead-up to marriage, but once you鈥檙e happily married, it鈥檚 not something that typically comes up, Felippe says.

Her advice to those considering a pre-nup is to have open, ongoing conversations with your soon-to-be-spouse and make sure you鈥檙e on the same page.

If finances are a point of contention, then that鈥檚 something you need to consider before taking the next step, she adds.