Differences between a Cohabitation Agreement and a Prenuptial Agreement
Cohabitation is a living arrangement when an unmarried couple lives with each other like a marriage. Cohabitation may create legal obligations between partners, including parenting, child and spousal support, and the division of assets.
The Divorce Act does not apply to couples who are not married. To fill in the gap for such cases, many of the provinces in Canada have provisions in their Property or Family Acts to cover the areas of guardianship, parenting time, child support and support for a common-law partner.
Dividing property between cohabiting couples is more difficult however some provinces have made the legal provisions like that of a marriage. In the regions that do not have Acts to cover cohabitation, then in the case of a relationship breakdown, you must rely on case law developed through years of litigation. Unfortunately, this is a murky area of law and litigation and lawyers can offer little certainty.
There is a trend in the Provinces to align the laws around cohabitation with those of a marriage. In this regards many couples are selecting to deal with the issues in advance to avoid the potential high conflict if their relationship ends.
A cohabitation (cohab) agreement is a legally binding agreement that sets out important aspects of the relationship. These agreements have become much common in recent years because of changing marriage relationships.
A cohabitation agreement is a legally binding document, if it is executed properly. It should address areas where there could be a dispute when faced with a relationship breakdown.
A cohabitation agreement may include decisions about the terms when living together and what will occur in the case of a breakup. These agreements generally include terms that:
The Family Law Act governs parenting and spousal support; however, a cohabitation agreement can be used to document a couple’s intentions with respect to the following:
There are numerous benefits to creating a cohabitation agreement. Upon breakdown of a relationship, a properly drafted cohabitation agreement helps reduce fighting, stress, emotional distress and legal fees. While most matrimonial laws set our property to be split 50/50, there are provisions in most provinces for pre-marriage assets and exemptions so you may be partly protected in this regard. If you want to be certain your fully protected, a cohabitation agreement should be considered.
While you may feel, you should have an agreement, approaching the subject with your partner can be a daunting task and if not handled with kid gloves may destroy your relationship. We know that making a Cohabitation Agreement will be hard. It is difficult and emotionally taxing trying to decide how you would end your relationship while it is still going strong or before you take the exciting step of moving in together. Fairway Divorce Solution’s negotiators use our step by step modified INR Process to facilitate these conversations so that you can lay the foundation for a great future versus injecting unnecessary stress and conflict in your relationship. A cohabitation agreement prepared by Fairway will give you the relief you want when entering this next phase of your life together and protect the relationship you are building.
A prenuptial agreement is a legally binding agreement created by two people before marriage. It is commonly abbreviated as “prenup.” The content of a prenup may vary significantly, and while it is like a cohabitation agreement in the areas it covers, it is strictly drafted prior to marriage to address what will happen in the case of a marriage breakdown. The agreement specifically sets out the details with regards to division of property and in many cases, spousal support. Normally issues around parenting and child support are not found in these agreements as the terms with regards to parenting are always negotiable depending on what is in the best interest of the children at the time. In the prenuptial agreement, the party bringing more assets to the marriage is likely setting out terms with regards to how he/she may protect them in the case of a divorce. The more detailed the agreement is, the more likely it will stand up under the scrutiny of a lawyer at the time of a marriage ending. The more specific it is, the better and reduces the changes of conflict around interpretation.
Prenup agreements are used to protect pre-marriages assets. It is a matter of personal choice, and there are strong opinions both in support of these kinds of agreements and opposed. If you want no confusion between pre-and post-marriage assets then a prenup could be wise.
What makes partners interdependent or common law?
Common law, otherwise referred to as Adult Interdependent Partners (AIP) are the terms used to define two people living together in a relationship of interdependence for a certain period.
When two people are living together and are considered common law, both parties should have a clear understanding of the expectations around money and children if the relationship should end. Having an agreement that sets out the decisions, will prevent legal issues after a breakup.
The rules in Canada have been changing so it is prudent to understand how the laws apply to your situation.
How can we get a plan drafted for common law or AIP relationships?
Fairway provides couples with the ease of mind when entering into an AIP by delivering a comprehensive Adult Interdependent Partnership Plan. We are trained to ask the difficult questions, so you have addressed the different scenarios.