PEACE AT HOME STARTS WITH A GOOD AGREEMENT

What is a Cohabitation Agreement?

Living together before marriage or as domestic partners is increasingly common. There is no one size fits all when it comes to relationship preferences and we have seen a lot of options through the years. Unmarried couples that live together for as little as one year but certainly by two years are referred to as common law partners. Common law partners have similar rights to married persons with some limited exceptions. Just as with married couples who wish to keep their assets separate when they are in a marriage, common law partners also have this option but instead of entering into a marriage agreement, common law couples enter into a cohabitation agreement.

A cohabitation agreement is a way to formalize in writing how the couple wishes to address property division and other rights in the event of a relationship breakdown. It is common for a cohabitation agreement to refer to who gets to live at the home that the partners were residing, whether there will be a cash payment by one to another, and how dealt is dealt with after a relationship ends. These agreements are often put in place before the date at which a common law couple becomes common law and we see them frequently used where one spouse has children from another relationship or where one spouse has more financial resources than the other and wishes to be able to elect to give some of her or his wealth to her or his partner rather than being compelled to do so by law as a result of a relationship breakdown.

Cohabitation agreements can be customized to meet your specific needs but the most common paragraphs in this type of agreement include:

• Excluded property;
• Managing joint accounts;
• Spousal support;
• Division of debts; and
• Joint property acquired during the relationship.

Who should have a Cohabitation Agreement?

Cohabitations agreements are ideal for non-married couples who plan to live together or already live together. If you are married or about to get married and would like something similar to a Cohabitation Agreement, a Marriage Agreement (hyperlink to this page) is ideal. By having an written agreement in place at the outset of the formal rights and obligations of common law being imposed, domestic partners can reduce the risk of unnecessary legal and court expenses to later determine rights and entitlements and obligations. It also makes everything more opaque for blended families and reduces the airing of dirty laundry in public as ideally, the partners will have pre agreed and there would be no need to access the public courts.

How do I make a Cohabitation Agreement?

A Cohabitation Agreement is a legal document that must be made in writing. Each person must sign the document in front of an independent witness. Before signing, each person ought to obtain independent legal advice to ensure the agreement is fair and that the agreement terms are understood.

Will a Cohabitation Agreement be enforced?

If a Cohabitation agreement is fair and reasonable and domestic partners had access to counsel or knowingly waived their right to get legal advice, it is likely that the agreement would be upheld if challenged into the future but care should be taken to ensure a reasonable review clause is included or that the agreement may come to an end on a specific event or time frame in order to be fair and reasonable. Full, fair and honest disclosures are equally important so that both partners go into the agreement knowing what assets the other has. Failure to disclosure has been held a valid reason to set aside a cohabitation agreement by the courts.