There are a myriad of benefits to marriage. Among some of the most obvious is the assumption that husband and wife share the same home whether both parties are listed on the title or not. The law assumes prima facie that both parties have legal rights and obligation should the marriage end due to separation, death, or otherwise. Unfortunately, unmarried couples may not have the same privileges. A cohabitation agreement is an alternative agreement between common-law couples that sets out their legal rights and obligation when the relationship ends.  An un-married couple can obtain a cohabitation agreement even after cohabiting with one another. However, it is wise to obtain an agreement prior to making significant plans in a relationship (i.e. starting a business).  Whether or not you need a cohabitation agreement is solely a decision for you and your partner to make. There is no law that makes it a mandatory requirement for unmarried couples. However, it is essential when protecting you and your partner’s interests.  If you’re unsure whether a cohabitation agreement is for you, consider the following checkpoints.

1. Clarity and Managing Expectations
A cohabitation agreement helps a common-law couple to determine who owns what at the start of the relationship. At first glance, it might seem like a very unromantic process and maybe even morbidly pessimistic.  However, the agreement puts the relationship into perspective where disagreement on financial matters is common.  When a marriage breaks down, a non-legal owner of the home may have basic legal rights as a remedy in law. However, when a common-law relationship breaks down, a non-legal owner has no claim to property in the same way that a married individual would. A cohabitation agreement facilitates managing expectations in a relationship.

2. Legally Enforceable
A cohabitation agreement is a legally enforceable document.  Consequently, parties can rely on the terms in a legal capacity should the relationship end.  Unmarried couples make verbal assertions and written agreements in the comfort of their own home pertaining to property ownership, the state of their affairs and medical incapacitation. However, where that agreement has not been accompanied by independent legal advice, it may hold no true weight.  It is not uncommon for a party to say they did not understand the terms of the agreement at the time it was executed. And on that premise, a judge may deem the agreement unreasonable. When parties obtain a cohabitation agreement, a lawyer can advise on the meanings of the terms and rely on the execution of the documents with full competency.

3. Protect Major Assets or Inheritance
If one or both partners in a common law relationship have major assets or inheritance, a cohabitation agreement is the immediate course of action to protect those interests. Major assets or inheritance may include any of the following:

  • Children from a previous relationship
  • Significant Debt
  • Owns business or property
  • Wants to specify health insurance
  • Wants to have specific guardianship over a partner should he or she be incapacitated
  • One makes a significantly larger income than the other

4. If you ultimately decide to get married
If the parties to cohabitation ultimately decide to get married and the terms of the cohabitation agreement remain the same, the agreement simply becomes a Marriage agreement or a pre-material agreement unless it is otherwise invalidated.  This demonstrates the binding power of the cohabitation agreement.

No matter how blissful you may be in a relationship, sometimes the unfortunate does occur. In those circumstances, it is wise to have a legally binding instrument to protect your assets and your mental health. Dealing with these matters once the relationship has ended may only result in a greater deal of stress.  Be proactive!