DOMESTIC CONTRACTS: COHABITATION AGREEMENTS AND MARRIAGE CONTRACTS

Cohabitation Agreements

Living with your partner can trigger certain family law rights and obligations, particularly with respect to spousal support (aka alimony). The law treats common-law spouses differently from legally married spouses. It does not matter how long you have been living together in a common-law relationship, common-law spouses do not have the same rights and obligations under the law as legally married spouses.

A Cohabitation Agreement will give you and your common-law spouse the peace of mind that you both know what to expect during the relationship, in the event of a separation, and in the event that one of you predeceases the other. The Cohabitation Agreement encompasses spousal support, the sharing of financial responsibility in the day-to-day expenses and with the family home, and how you will share the value of the home and other assets and debts.

Marriage Contracts (aka Pre-Nuptual Agreements)

It’s important to be aware of the legal consequences of getting married. The law stipulates how assets will be divided and the quantum and duration of spousal support upon separation, depending how long you were married. The law also sets out how much a spouse will receive from a deceased spouse if there is no Will.

Marriage Contracts set out you and your spouse’s mutual intentions with respect to division of assets, spousal support and the matrimonial home in the event of a separation or death. You can make a Marriage Contract at any time, before or after the marriage. (That’s why we don’t call them Pre-nuptual Agreements, which, as the name would suggest, must be signed before the marriage.)

While we still find that the majority of people choosing to have Marriage Contracts are those who have been married and divorced before and/or are blending families, more and more couples getting married for the first time are choosing to have a Marriage Contract. It’s not very romantic. If you don’t need it, you’ll still see the value of having done it; and if you do need it, you’ll be really glad you did it.

In the case of blended families in particular, you and your spouse may agree that you have something different than what the law prescribes. In Canada, we are fortunate to be able to override the law in contracts. You and your spouse can contract out of some or all of these rights and obligations set out in legislation and create a plan that better suits your family’s needs.