Cohabitation Agreements / Marriage Contracts

Those who are already married, or intending to marry, as well as those persons only cohabitating, or intending to cohabit, may enter into agreements which set out their rights and obligations in the event that the relationship ends. These agreements provide certainty in that each party will know where they will stand should the relationship end.

For those intending to marry, these agreements are typically referred to as Marriage Contracts or Pre-nuptial Agreements. For those entering into these agreements after they are married, these agreements are usually referred to as Post-nuptial Agreements. They are referred to as Cohabitation Agreements for those just intending to live together or those without any immediate intention to marry.

In the event of a relationship ending, these agreements eliminate disputes over assets and finances, which can be costly, both financially and emotionally. They allow parties to agree, in advance, on the distribution of assets, ownership of property and the payment of support. These agreements cannot, however, deal with issues related to custody and access to children.

These agreements are equally applicable and provide similar benefits to those who choose to only cohabit and to those who choose to marry, even though the law still treats these relationships differently in some respects. Under the law, a common law spouse has the same right to seek support from his or her partner as if he or she were married. However, there is no right on the part of the common law spouse to seek an equalization of matrimonial property from his or her partner nor does the common law spouse have any possessory rights in the matrimonial home. Despite this, there are other property rights which a common law spouse may have upon the end of a relationship. These property rights are often more complex to resolve than the property rights which arise upon the end of a marriage.

While nobody enters into a relationship expecting it to end, should the couple choose to part ways, having an agreement in place will make dealing with financial matters much easier.

FREQUENTLY ASKED QUESTIONS - COHABITATION AGREEMENT

What rights are generally covered in a cohabitation agreement?

Generally the issues of property division and spousal support are covered in cohabitation agreements.  However, there can be other areas covered. A cohabitation agreement should always be tailored to the specific needs and concerns of those entering into them.

Can a cohabitation Agreement just deal with one issue?

Yes. A cohabitation agreement can deal solely with one very specific issue or cover a number of different issues.  For example, the only purpose of a cohabitation may be to ensure an inheritance from one person's family, used to pay the mortgage on a jointly held home, is not shared if the couple separates.

We are already cohabiting. Can we enter into a cohabitation agreement?

Yes you can. You may enter into a cohabitation agreement at any point in the relationship.

What happens to a cohabitation agreement if we marry?

Your cohabitation agreement automatically becomes a marriage contract (also sometimes referred to as a prenuptial agreement) upon marriage, unless you specifically state otherwise. There is no need to do a whole new agreement, unless of course you want to change the terms of the agreement you already have.

What are the requirements for a cohabitation agreement?

To help ensure that a cohabitation agreement is upheld by a court, should it ever be challenged, there are a number of steps which should always be taken:

• The cohabitation agreement must be in writing, signed by the parties and witnessed. This is a requirement of Ontario's Family Law Act.
• The couple must exchange financial disclosure (e.g. bank statements).
• Neither person entering into the cohabitation agreement can do so under duress. It must be a voluntary decision.
• Each person should have independent legal advice. This means that each person needs to have their own lawyer. This helps to ensure that everyone fully understands the cohabitation agreement before they sign it and have a lawyer, working only for them, provide them with assistance and advice before they do so.  Cohabitation agreements signed without the involvement of two lawyers risk being overturned by the courts, should they ever be challenged, on the basis that one or both persons did not fully understand what it is they were signing.The Agreement cannot be unduly unfair to one person.

Are there certain items that cannot be included in a cohabitation agreement?

Yes. There are certain items that cannot be included in cohabitation agreement. These are a few examples:

• Parenting related provisions, including a determination of child custody and access schedules.
• Child support provisions, unless it can be shown that the cohabitation agreement provides child support that is equivalent to or greater than the amount that would be payable according to the Child Support Guidelines.