Common Law Spouses
Why Do You Need a Cohabitation Agreement?
As we have mentioned in a previous post, many people wrongly assume that cohabiting or “common-law” couples have the same rights as married couples. In some respects, they are correct, but there are also some significant differences. One of the major difference is in the split of property.
Married couples are guaranteed an equal 50-50 split of their assets (net family property) when the relationship ends, but cohabiting couples are not afforded the same guarantee under Ontario law. A common-law spouse could try to make a common-law claim in order to get a share of their partner’s assets, but there is not guarantee that he or she will get it.
Because more Canadians are choosing not to get married, the demand for cohabitation agreements has been increasing over the last 20 years. Cohabitation agreements can protect spouses by setting out what property can be split and how it will be split if the relationship ends. It can also set out how spousal support will be handled (if at all), and how joint debts will be paid.
Cohabitation agreements offer the same protection as marriage contracts (also known as domestic contracts under the Family Law Act). A cohabitation agreement can turn into a marriage contract should the cohabiting couple get married. If they don’t get married, the agreement will remain active until one person dies, unless the contract sets out an end date.
If you and your partner are considering getting a cohabitation agreement, it is extremely important that each partner retain their own lawyer. A cohabitation agreement may not be enforceable in court if each partner does not obtain independent legal advice. In addition, both partners must sign the agreement willingly. When both partners have their own lawyer, it helps ensure that one partner is not coercing the other into signing it. An experienced lawyer can also help you ensure that you are getting a fair deal. If a cohabitation agreement unfairly favours one partner over the other, the court may not be willing to enforce it.
Questions about cohabitation agreements or common law relationships? Contact family lawyer Jason P. Howie, online or at 519-973-1500.