For common law or couples living together.
More and more couples are choosing to live together without getting married. Cohabitation is a living arrangement in which an unmarried couple lives together in a long-term relationship that resembles a marriage resulting in common law.
Cohabitation may create rights and legal obligations between partners, including parenting and guardianship of children, child support, partner support, and potentially the division of property. Each province sets out how long you need to be living together for it to be considered a common-law relationship.
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A cohabitation agreement (cohab agreement) is a legally binding agreement that addresses areas where there could be a dispute when faced with a relationship breakdown.
This agreement is binding and it is recommended that a general practice lawyer provide you with independent legal advice prior to signing.
Couples set out terms in advance to protect themselves, with the intention of avoiding the high costs of fighting and litigation. This agreement is specifically for couples who have chosen to live together whether they are heterosexual or homosexual. These agreements have become more common in recent years because of changing social views, regarding marriage and gender.
Typically, a cohab agreement is used by two people wanting to live together in common law for an extended time without getting married. A prenuptial agreement is usually entered prior to getting married. Both contracts are designed to set out the agreement with regards to assets, debt, spousal support and perhaps children. They allow the individuals concerned to determine in advance, who will keep specific assets and what will happen to assets that have been purchased jointly or during their relationship. Both agreements are intended to bind both parties.
The agreement should set out clearly and accurately the terms with regards to property rights (before and after cohabitation), mutual financial support, addressing debt and taking care of the children. It may also set out terms to cover areas of financial responsibility and property while living together. These agreements generally include terms that:
The Divorce Act does not apply to couples who are not married. For provinces to compensate, most 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. In the provinces that do not have Acts to cover cohabitation, then in a relationship breakdown, you must rely on case law developed through years of litigation.
Dividing property between cohabiting couples is more difficult. With regards to property, there has been much movement in Canada in integrating common law into the family laws governing property in marriage. Each province has taken a different stance, but the trend is toward equating common law to marriage.
There is a trend in the Provinces under their respective Family Law Acts to align the laws around cohabitation with those of a marriage. After a set number of years living together, then these laws will apply. This is the reason; many couples are deciding to set out their terms and agreements so to avoid misunderstandings that can result in legal battles. Unfortunately, this is a murky area of law and litigation and lawyers can offer little certainty.
Ensuring that your agreement will stand the test of time both legally and otherwise, is contingent on the efforts when drafted. There have been many situations and stories in the media, of cases where cohabitation or prenuptial agreements have been thrown out or overruled by the courts. Usually, it is because the terms were either against the law, vague, missing important details or neglecting an obvious legal obligation. Regardless of whether you have a lot or a little to protect, you need to prepare the agreement properly.
You need to ensure you have considered many scenarios. For example, if you want to protect a piece of property, but during your cohabitation period the property sells then you buy another property or merely invest the money, then the property you listed as exempt, no longer exists. Another example is the case of support. Things change, and if you set out an agreement that is clearly unfair and legally offside, then the terms may be challenged and overruled.
The first step in doing this right is to set out what you both want to protect with regards to assets/debts and relationships. While this is that is designed specifically for this purpose is key to a successful, happy outcome.
There are numerous benefits to creating a cohabitation agreement. Upon breakdown of a relationship, a professionally drafted cohabitation agreement helps reduce fighting, stress, emotional distress and legal fees. There is no hard and fast rule about whether you need one or not. Quite frankly, it comes down to a personal decision. If you do not have one and your relationship ends, you may find yourself bound by laws that were not there when you moved in together. Many lawyers and financial experts would encourage those with assets to having a cohabitation agreement.
At fairway divorce solutions, we have a proven process that achieves a cohabitation agreement while protecting your relationship, self-worth and your integrity. Many couples avoid this agreement because they are afraid of how it might be received or interpreted by their loved one. At Fairway, will do our very best to ensure you achieve an agreement, but not at the expanse of your relationship. While getting a cohabitation agreement is the outcome, the process that we use is similar for divorcing couples as the issues you must cover are the same. However, the fairway process is specifically tweaked to assist couples wanting a cohab agreement. We ensure we do not miss anything and at the same time, help you both lay the foundation or a great life together.
There is no doubt that this can be stressful. This is why getting one that protects you as well makes sense. Protecting pre-cohab assets is not a bad thing if you are treated fairly and considering the laws. The conversations and negotiations can be empowering and give you both confidence and control in financial matters. You can address many important scenarios; including death, disability, children as well as the relationship ending. Just make sure that you are using an experienced professional, negotiator or dispute resolution expert and have it properly executed.
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 hurt your relationship. Negotiating or drafting a cohabitation agreement may be difficult. It can be emotionally taxing deciding how you would end your relationship while it is still going strong or before you take the exciting step of moving in together. The best way to approach the conversation is to be straight-forward and honest. Assure your partner that the intention is to be fair to both parties and will protect each one of you, and not just the one who had the most assets to start with.
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.