Divorce is a challenging and emotionally draining process, and one of the biggest concerns for many individuals is how to protect their hard-earned assets. In New Brunswick, family law governs how property and debts are divided during a divorce, and understanding these rules can help you take proactive steps to safeguard your financial future.
This guide will walk you through the key strategies to protect your assets from divorce in New Brunswick in 2025, including legal structures, prenuptial agreements, and smart financial planning.
Understanding New Brunswick’s Matrimonial Property Laws
Before diving into asset protection strategies, it’s crucial to understand how New Brunswick divides property in a divorce.
1. Equalization vs. Division of Property
New Brunswick follows the Marital Property Act, which means that marital property (assets acquired during the marriage) is typically divided equitably, but not always equally. The court considers factors such as:
- The length of the marriage
- Each spouse’s financial contributions
- Non-financial contributions (e.g., homemaking, childcare)
- Future financial needs
Excluded Property (Separate Property):
- Assets owned before the marriage
- Gifts or inheritances received individually during the marriage (unless commingled)
- Court-awarded damages (e.g., personal injury settlements)
However, if separate property is mixed with marital assets (e.g., depositing an inheritance into a joint account), it may lose its protected status.
Key Strategies to Protect Your Assets
1. Prenuptial Agreements (Premarital Contracts)
A prenuptial agreement (prenup) is one of the most effective ways to protect assets before marriage. In New Brunswick, prenups are legally binding if:
- Both parties provide full financial disclosure
- Each spouse has independent legal advice
- The agreement is fair and not unconscionable
What Can a Prenup Cover?
- Definition of separate vs. marital property
- How assets will be divided in case of divorce
- Protection of family inheritances or business interests
- Spousal support (alimony) limitations
2025 Update: Courts are increasingly upholding well-drafted prenups, but they may still be challenged if deemed unfair.
2. Postnuptial Agreements
If you’re already married, a postnuptial agreement can serve a similar purpose. These are especially useful if:
- One spouse receives a significant inheritance
- A family business is at risk
- Financial circumstances change dramatically
3. Keeping Assets Separate
To prevent separate assets from becoming marital property:
- Avoid commingling funds – Keep inheritances, pre-marriage savings, and gifts in separate accounts.
- Title property wisely – If you buy a house before marriage, keep it in your name only (but be aware this may affect equity division).
- Document everything – Maintain clear records proving an asset’s separate status.
4. Trusts for Asset Protection
Placing assets in a trust can provide an extra layer of protection.
- Family Trusts – Can shield inheritances or business interests from division.
- Discretionary Trusts – Give trustees control, making it harder for a divorcing spouse to claim assets.
Important: Trusts must be set up before marriage (or well in advance of divorce) to avoid being seen as a fraudulent transfer.
5. Protecting Business Interests
If you own a business:
- Prenups/postnups should specify how the business is handled.
- Shareholder agreements can restrict transfers of ownership.
- Pay yourself a fair salary (rather than reinvesting all profits, which could be considered marital property).
6. Limiting Joint Debt & Liabilities
Debts incurred during marriage are typically split equally. Protect yourself by:
- Avoiding unnecessary joint loans or credit cards.
- Keeping major purchases (e.g., a car) in one spouse’s name if possible.
7. Insurance & Retirement Accounts
- Life insurance policies with named beneficiaries can bypass divorce claims.
- RRSPs & pensions may be divided—consider a domestic contract to exclude them.
What If Divorce Is Already Imminent?
If divorce proceedings have started, you still have options:
1. Negotiate a Fair Settlement
- Mediation can help reach an agreement without court intervention.
- Focus on protecting high-value assets (e.g., family heirlooms, businesses).
2. Prove Separate Property Claims
- Provide bank statements, deeds, or gift letters to show an asset’s separate nature.
3. Be Wary of Fraudulent Transfers
- Courts can penalize spouses who hide assets before divorce.
- Any large transfers must be well-documented and justifiable.
Common Mistakes to Avoid
❌ Assuming common-law rules are the same – In New Brunswick, common-law couples have fewer property rights than married couples (unless a cohabitation agreement exists).
❌ Mixing inheritance with joint accounts – This can turn separate property into marital assets.
❌ Ignoring tax implications – Transferring assets during divorce may trigger capital gains taxes.
Final Thoughts: Plan Ahead
Divorce can drastically impact your financial stability, but with the right strategies, you can minimize risks. Whether through prenups, trusts, or careful financial management, taking proactive steps now can save you significant stress later.
If you’re unsure about the best approach, consult a New Brunswick family lawyer specializing in asset protection to tailor a plan for your situation.
