Avoid a messy and expensive legal battle over your assets by planning ahead.
The rest of this website discusses what legal rights you have when you live common law. You may be happy with them, or unhappy, or often, surprised. However, there is a way to take control of your situation and change some of your legal rights and obligations – this is through a cohabitation agreement.
What is a Cohabitation Agreement?
A cohabitation agreement is basically the equivalent of a prenuptial agreement for common law relationships. It sets out the rights and obligations of each party in the relationship when the relationship ends, either through separation or death.
Why Get a Cohabitation Agreement?
As you can see from the rest of this website, the law relating to common law relationships in Canada is often a mess. For instance, property division often relies on a legally complex and expensive claim for unjust enrichment. You may want to avoid this, and share property equally as if you were married. Or not share property at all. The point is that getting a cohabitation agreement allows you and your partner to define what you believe is fair, rather than relying on what the government thinks is fair.
Some of the different themes I’ve seen in couples who want cohabitation agreements:
* they want certainty and to avoid legal disputes
* they want to ensure that the mother doesn’t suffer financially for taking time off work to raise the children
* they want to ensure that one partner’s family business stays in the family
* they want to ensure that children from a previous relationship, rather than a new partner, get their assets
* they want to ensure that the financially less secure partner is protected
* they want to communicate their wishes and expectations for the relationship
When Should You Get a Cohabitation Agreement?
If you’re reading this, probably yesterday Seriously, ideally you want to enter into a cohabitation agreement before moving in together or before having children together. Obviously, that’s not always possible. However, you can enter into a cohabitation agreement any time you want, even if you are already living together or have children together.
What Can and Can’t Be in a Cohabitation Agreement?
Neither child custody and access (visitation) nor child support can be dealt with in a cohabitation agreement. The thinking behind this is that a court always has to do what is in the best interests of a child, regardless of any agreement.
As well, Canadian courts generally won’t enforce moral type clauses such as penalties for adultery.
The two big things normally dealt with in a Canadian cohabitation agreement are property division and spousal support.
As for spousal support, typical types of provisions are for lump sum spousal support, no spousal support at all, or a sliding scale of spousal support that increases the longer the relationship lasts.
As for property, typical types of provisions are for no property division (each party keeps what is in their own name), provisions dealing with how the matrimonial home is to be dealt with, provisions emulating how property is divided by married couples, and provisions excluding specific assets, such as a business or cottage, from being divided.
Sometimes cohabitation agreements set out different results if the relationship ends via separation rather than via death.
Are Cohabitation Agreements Legally Valid?
Well they must be if I’ve taken the trouble to write this much about it Seriously, the way that the law works is that any agreement you enter into can be reviewed and invalidated by a Canadian court, and that includes cohabitation agreements. Courts will scrutinize a cohabitation agreement much more closely than they would a regular business contract.
In scrutinizing the validity of a cohabitation agreement, the court will look at several factors. The first of these is duress. If one party exerted an undue amount of pressure on the other to enter into the cohabitation agreement, then a cohabitation agreement may be set aside.
The second factor is financial disclosure. Both parties must present each other with full and frank disclosure of their financial situation when they are entering the cohabitation agreement, or it may be set aside. A good idea is to put this disclosure in writing and keep it, perhaps even attached to your cohabitation agreement.
The third factor is that legal formalities must be followed. A cohabitation agreement must be in writing (there is no such thing as an oral cohabitation agreement) and signed by both parties with each parties’ signature witnessed.
Sometimes a judge will invalidate part of a cohabitation agreement if it is grossly unfair. For instance, if you and your partner agree that no spousal support will be paid, then live together for twenty years while one of you goes on to earn millions of dollars per year and the other becomes ill and is no longer able to work, chances are high that spousal support will be payable.
As you can see on the rest of this website, family law in each province is quite different, especially when it comes to property division. The law that applies is the law in the province you are living in when your relationship ends. If there is a chance you may move provinces during your relationship you may want to ensure that your cohabitation agreement accomplishes what you want it to accomplish in both provinces.
What Happens to our Cohabitation Agreement if we Marry?
If you marry, your cohabitation agreement becomes a prenuptial agreement (also known as a marriage contract in some provinces). It still remains in full force and effect.
Sounds Good. How Much Do You Charge for a Cohabitation Agreement?Unlike most lawyers, we don’t charge hourly rates for a cohabitation agreement, but a flat rate so that you know at the outset what your costs will be. Provided you and partner pretty much agree what will be in the agreement, our fee is $749 (+hst).
To get started with your cohabitation agreement, simply call us at 613-519-0320 or contact us via email on our contact form.