Why Have a Cohabitation Agreement in Ontario?

Disclaimer: This article on drafting a cohabitation agreement in Ontario is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.

Entering into a committed relationship with your partner is a significant milestone in your life. There is a growing trend in Canada towards common-law relationships. For some, the intention is to never marry. For others, they just haven’t tied the knot yet. 

Regardless, you must consider the legal implications. This is where a cohabitation agreement comes into play.

This article will explore why having a cohabitation agreement in Ontario is a wise choice. We’ll discuss the purpose of these agreements and address common questions.

What Is the Purpose of a Cohabitation Agreement?

A cohabitation agreement is a binding contract. You may see it called a common-law or domestic partnership agreement. It is designed to provide clarity and protection for unmarried couples living together. Its primary purpose is to establish the rights and obligations of each partner within the relationship.

The property division sections in the Family Law Act only apply to married couples. This means that without an agreement, your property rights remain distinct from your partner’s. This is true even if you’ve been in the relationship for a long time.

Cohabitation agreements serve several essential functions.

Property Division: 

The agreement will typically outline how you will divide your property if you separate. This ensures that each partner’s assets are protected.

Debt Protection: 

Cohabitation agreements can safeguard each partner from the other’s debts. This means that if your partner accumulates debt during the relationship, creditors cannot access your assets.

Income and Asset Protection: 

One of you may expect more income or a financial windfall, such as an inheritance. The agreement can specify you will manage these scenarios. 

Clarifying Financial Expectations: 

The agreement helps establish clear expectations when it comes to financial matters. This will reduce any disputes if you separate.

Children’s Welfare: 

Cohabitation agreements cannot determine child custody or child support arrangements. However, they can address financial obligations related to your children from a previous relationship.

Inheritance: 

The agreement can include provisions regarding the inheritance of property if one partner dies. 

How Long Does a Cohabitation Agreement Last?

A common question that arises when discussing cohabitation agreements is their duration. Cohabitation agreements can be flexible and last as long you want. You can sign an agreement at any time during the relationship. You can sign one at the outset or years into your relationship.

However, these agreements can evolve if you get married. The cohabitation agreement may automatically transition into a marriage contract. 

The marriage contract will address the changed status and rights and obligations associated with marriage. It’s crucial to review and, if necessary, update the agreement to align with your new status.

Do I Need a Cohabitation Agreement in Ontario?

The decision to have an agreement is a personal one. However, there are situations when having an agreement becomes especially important:

Protecting Separate Property: 

Do you have significant assets or debts that you want to protect? A cohabitation agreement is crucial to ensure that they remain separate.

Financial Independence: 

Do you prefer financial independence? Do you want to maintain ownership of your assets? An agreement can clarify these expectations.

Avoiding Court Disputes: 

Having an agreement in place helps prevent disputes by spelling everything out and getting both of you on the same page. 

Protection for Children: 

Do either of you have children from a previous relationship? An agreement can outline financial support arrangements to ensure the children’s welfare.

Protecting your common-law relationship with Beeksma Law

In Ontario, the legal landscape for unmarried couples differs greatly from that of married couples. A cohabitation agreement is a valuable tool for protecting your rights and assets. To discuss your cohabitation agreement, get in touch with the team at Beeksma Law today!