What is a Cohabitation Agreement and How Can it Help You?
According to the law, there is little difference between a marriage and a common law relationship, except when it comes to division of property – and that’s where a cohabitation agreement can help.
When a couple enters into a marriage, their relationship is considered an equal economic partnership. If that marriage ends, the value of their property is divided equally between the two partners (with a few exceptions). Any increase in value of the property is also shared. In addition, both partners have equal rights to the family home.
When a couple is cohabitating, or in a common-law relationship, property (like furniture, vehicles, artwork) belongs to the partner who brought them into the relationship. If the relationship ends, the property generally belongs to that individual. If a couple contributed jointly to property (e.g., a home), both have rights to the property or increase in value. But you may have to go to court to get – or protect – your share.
A Cohabitation Agreement lays out your financial and family arrangements both during the relationship, and in the eventuality that it ends.
What is a Common Law Marriage, or Cohabitation?
The Ontario Family Law Act (FLA) states a couple has entered into a common-law marriage when they have either:
Lived together continuously in a conjugal relationship for three or more years; or
Have lived together for a period (“relationship of some permanence”, and have a child together by birth or adoption.
What are Spousal Rights if the Common Law Relationship Ends?
When a common law relationship ends, spouses are entitled to spousal support and child support, similar to a marriage. Support can be determined through mediation, arbitration, or through the courts. To learn more, read our blog: How a Family Law Lawyer Can Help You During a Separation.
Unless you have a child together, the spouse who owns the home, or whose name is on the lease is entitled to remain in the home. If you have a child, or children together, you can ask to remain in the home as part of a child support order.
A clear Cohabitation Agreement can set out these decisions before a relationship ends, simplifying the process of moving on with your life.
Why Would You Want a Cohabitation Agreement?
A Cohabitation Agreement typically covers property division and support. You may wish to create a Cohabitation Agreement to:
Define ownership of a house, cottage, or business.
Protect children from an earlier relationship.
Protect yourself from debt incurred by the other spouse prior to, or during the relationship.
Share particular property that wouldn’t otherwise be shared under a common law relationship.
Outline child and spousal support obligations in the case of separation.
Creating a Cohabitation Agreement
You do not need a lawyer to create a Cohabitation Agreement, but a good family lawyer can help you draft one that will be legally binding and enforceable.
To create an agreement, partners must each provide information on their finances. The agreement must:
Be in writing
Be dated, and signed by both people entering into the agreement.
Be witnessed by a third-party, and signed by that witness.
Should you and your partner decide to get married, your Cohabitation Agreement can become your marriage contract, unless you both wish to change it at that time.
Get Independent Legal Advice on your Cohabitation Agreement
Although you don’t need a lawyer to create a Cohabitation Agreement, it’s strongly recommended you each get legal advice to understand your rights and responsibilities in a common law partnership, and how your agreement might affect those rights.
Having independent legal advice, and involving a lawyer the process helps show the process was fair. This reduces the chance of the Cohabitation Agreement being successfully challenged in court.
Review and Update your Agreement Periodically
Your life changes over time. Just like with a Will, a Cohabitation Agreement should be reviewed and updated as your relationship grows. Similar to creating the agreement, there are rules to follow to ensure the changes are legal. Your family law attorney can provide advice to ensure the changes are properly documented.
Contact Sutherland Law for Advice on Your Cohabitation Agreement
Whether you need help drafting a Cohabitation Agreement, or are looking for independent legal advice to protect your rights, contact Sutherland Law. The Sutherland Family Law Team understands how family law decisions impact you and your family, and can handle all your family law needs with compassion and experience.
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Resources:
Steps to Justice
https://stepstojustice.ca/questions/family-law/what-is-a-cohabitation-agreement/
Ontario Ministry of the Attorney General
https://www.attorneygeneral.jus.gov.on.ca/english/family/familyla.html#_Toc436729008
Ontario Family Law Act
https://www.ontario.ca/laws/statute/90f03