Vaughan Family Lawyers Drafting & Reviewing Cohabitation Agreements
A cohabitation agreement is strongly recommended for any unmarried couple who lives together, in order to clarify their expectations and preserve the rights most important to them. Whether you are a young couple planning to live together prior to getting married, Millennials who have opted for common law status over marriage, or seniors in a new stage of life, a cohabitation agreement is vital to protect each party’s rights during the relationship and in the future. The rights of common law partners are drastically different from those of a married couple and the decision to cohabitate can create unintended legal consequences. A comprehensive cohabitation agreement aligns expectations and provides clarity to both parties with respect to their financial rights, responsibilities, and obligations. Ideally, cohabitation agreements should be created before or as soon as possible after moving in together with your significant other.
At Bortolussi Family Law in Vaughan, our lawyers regularly draft cohabitation agreements for clients in a common law relationship. We work with clients to identify areas where they may be vulnerable, often pointing out issues they hadn’t previously considered. We bring clarity to the process of designing an effective cohabitation agreement, so our clients can move ahead, confident their interests are secure.
What Is a Cohabitation Agreement?
A cohabitation agreement sets out each party’s rights and obligations in the relationship and terms relating to financial matters such as property or spousal support should the relationship come to an end. Given the lack of property and limited financial rights of unmarried couples who share a home, a cohabitation agreement can be used to create rights each party would not otherwise enjoy. For example, if the shared home is owned by one spouse yet both spouses contribute financially, it would be in the interest of the non-owner spouse to contractually create a right to a monetary or ownership interest in the home or even the equalization of the value of the home.
Despite the fact that the law in Ontario does not create a statutory right to the equalization of property nor spousal support for common law couples until they are cohabited for three years or had a child together and their relationship is of some permanence, there have been cases where courts have imposed rights equal to or similar to an equalization of property. In cases where courts have determined one partner was financially reliant on the other in the relationship, a court may find an order for support is necessary or that the contribution to the family by a non-titled owner is justification for granting support or a monetary interest or rights to a property. Couples who wish to avoid the potential for litigation down the road can do so by setting out in a domestic contract their expectations clearly from the start.
What Can and Cannot Be Included in a Cohabitation Agreement?
A cohabitation agreement may outline each person’s rights pertaining to property, finances and support. The education and moral training of their children can be included in a cohabitation agreement but not the rights relating to parenting time and decision-making (previously referred to as custody and access). A cohabitation agreement should focus solely on financial and property matters, including:
- Assigning rights to the family home if it is not owned jointly;
- Creating rights to other property, including bank accounts, business assets or pensions, if desired;
- Stating the parties’ intentions to keep certain property separate, and to prevent future claims for unjust enrichment, joint family venture, or constructive trust in the future; and
- Spousal support limitations or releases.
Why Do Common Law Spouses and Unmarried Partners Need a Cohabitation Agreement?
Living together, while a permanent choice for some, is sometimes also a first step for couples who will later become married. More and more Millennial couples are choosing to enter a common law relationship over marriage. Baby Boomers who have previously divorced or lost a spouse may wish to keep unnecessary legal complications out of their new relationship or preserve assets for their grown children. No matter the motivation behind the decision to move in together before or without getting married, each person involved will have unique interests to protect. A well-constructed cohabitation agreement will provide much-needed assurance to both parties with respect to their financial rights and obligations moving forward.
A Cohabitation Agreement Can Transition Into a Marriage Contract
Under Ontario’s Family Law Act, a cohabitation agreement is automatically deemed to transition into a marriage contract once the couple marries unless otherwise specified in the agreement. This allows a couple to plan ahead and protect themselves both before and after marriage in the same domestic contract. Additionally, a cohabitation agreement can be used to create the same rights in common law that would not ordinarily take effect until marriage, such as rights to the matrimonial home.
It is important to note that married couples are not permitted to contract out of the right to possession of the matrimonial home. If an existing cohabitation agreement contains a term excluding one spouse from the home post-separation, this term will not be enforceable after marriage.
Protecting the Interests of Common Law Partners
For those who choose to remain in a common law relationship and never legally marry, a cohabitation agreement is equally important, and perhaps even more so. In Ontario, common law couples do not enjoy the same rights to property equalization as married couples do. When a common law couple separates, each party will generally leave the relationship with the assets (and debts) they brought with them or acquired independently throughout the relationship. This includes the family home, as the concept of the matrimonial home does not apply outside of a legal marriage. Setting terms out clearly in an agreement can prevent surprises after separation, and secure rights that otherwise would not exist under law. In addition, the parties may want to change the right to spousal support such that entitlement is acquired before the statutory three-year wait or to provide for a complete release of the right to support or something in between.
The Importance of Independent Legal Advice for Cohabitation Agreements
Since a cohabitation agreement may dictate support and property rights and obligations in the event of a separation, it is extremely important for each party to have independent legal counsel. This ensures neither person will be taken advantage of or sign away their rights to support or property to which they would otherwise be entitled. In fact, if each party does not obtain independent legal advice prior to signing, it is likely the document will be considered unenforceable in the future.
At Bortolussi Family Law, we will ensure you are fully aware of the potential impact of each aspect of your cohabitation agreement during the drafting and review process. Our team has the experience and know-how to help you consider important permutations of a cohabitation agreement based on the circumstances so that you can decide how you want the issues dealt with. As our client, our primary goal is to provide you with the clarity of knowing exactly what needs to be addressed in the agreement, as well as the confidence in knowing your interests are fully protected.
Contact Bortolussi Family Law in Vaughan for Skilled Drafting & Review of Cohabitation Agreements
The experienced and compassionate lawyers at Bortolussi Family Law skilfully draft cohabitation agreements for common law spouses and unmarried couples across the Greater Toronto Area, extending out to Mississauga, Brampton, Caledon, Vaughan, Woodbridge, Concord, Maple, Kleinberg, Whitchurch-Stouffville, Markham, and Etobicoke and all areas in between. Our family lawyers also regularly provide independent legal advice on cohabitation agreements drafted elsewhere prior to signing.
Whether we are drafting an agreement or reviewing it, we take the time to listen carefully and attentively to your needs and objectives. We review the financial disclosure exchanged by the couple which informs the financial terms of the agreement. Our primary focus is always on achieving your goals, addressing your concerns, and providing you with clarity and confidence. Our family lawyers will ensure your entitlements and rights are properly protected in a comprehensive cohabitation agreement. To discuss your circumstances with a member of our team, please reach out to us online or by phone at 416-987-3300.