Cohabitation Agreements

From Clicklaw Wikibooks

Cohabitation agreements are contracts signed by couples who plan to live together or who are already living together. Cohabitation agreements typically deal with things like how propertySomething which can be owned. See "chattels" and "real property." and debtA sum of money or an obligation owed by one person to another. A "debtor" is a person responsible for paying a debt; a "creditor" is the person to whom the debt is owed. will be divided or whether spousal supportMoney paid by one spouse to another spouse either as a contribution toward the spouse's living expenses or to compensate the spouse for the economic consequences of decisions made by the spouses during their relationship. will be paid if the relationship ends. Cohabitation agreements can also deal with things during the relationship, like how the housework is distributed and how the household expenses are paid. There is no legal requirement for people to sign a cohabitation agreementAn agreement signed by people who are or have begun to live together in a marriage-like relationship that is intended to govern their rights and obligations in the event of the breakdown of their relationship and, sometimes, their rights and obligations during their relationship. See "family law agreement." when they decide to live together.

This section talks about when and why cohabitation agreements are usually signed and the legal requirements of valid cohabitation agreements.

Entering into a cohabitation agreement

Cohabitation agreements, also known as "living together agreements," are usually signed before or shortly after a couple starts living together. A couple may enter into a cohabitation agreement with the intention of addressing things that might happen during the time they live together, while they cohabit, but cohabitation agreements are most often intended to address the issues that might arise if their relationship breaks down.

There is no legal requirement that you must sign a cohabitation agreement if you're living with someone or plan on living with someone. You can't be forced to sign a cohabitation agreement.

Unmarried couples and cohabitation agreements

The big difference between marriage agreements and cohabitation agreements is that people who sign a cohabitation agreement aren't married and may not intend to get married, or at least not just yet. They may become unmarried spouses or they may not. As a result, it's important to understand exactly how the legal status of unmarried spouses differs from the legal status of other unmarried couples and the legal status of married spouses before even thinking about the idea of a cohabitation agreement.

Married spouses have been legally married, either by a civil ceremony performed by a marriage commissioner or in a religious ceremony performed by a religious official. Married spouses who go to court are entitled to ask for orders under the Family Law Act about the division of property and debt and spousal support, and, if they have children, orders about parenting arrangementsA term under the ''Family Law Act'' which describes the arrangements for parental responsibilities and parenting time among guardians, made in an order or agreement. "Parenting arrangements" does not include contact. See "contact," "guardian," "parental responsibilities" and "parenting time." and contactA term under the ''Family Law Act'' that describes the visitation rights of a person who is not a guardian with a child. Contact may be provided by court order or by the agreement among the child's guardians who have parental responsibility for determining contact. See "guardian" and "parental responsibilities.".

An unmarried couple will become "spouses" for the purposes of the Family Law Act if:

  1. they've lived together in a marriage-like relationshipIn family law, the quality of an unmarried couple's relationship that demonstrates their commitment to each other, their perception of themselves as a couple and their willingness to sacrifice individual advantages for the advantage of themselves as a couple; a legal requirement for a couple to be considered spouses without marrying. See "cohabitation," "marriage" and "spouse." for two years, or
  2. they've lived together in a marriage-like relationship for a shorter period of time and have a child together.

Unmarried spouses who have lived together for at least two years and go to court are entitled to ask for orders under the Family Law Act about the division of property and debt and spousal support, and, if they have children, orders about parenting arrangements and contact. Their rights are exactly the same as married spouses; these couples should also read the discussion on Marriage Agreements in the next section of this chapter.

However, unmarried spouses who have a child and have lived together for less than two years are only entitled to ask for orders about and spousal support, and, if they have children, orders about parenting arrangements and contact. They can't ask for orders about the division of property and debt under the Family Law Act.

An unmarried couple who aren't spouses under the Family Law Act can only ask for orders about parenting arrangements and contact. They can't ask for orders about the division of property and debt or spousal support under the Family Law Act.

For the purposes of this discussion, the critical distinction between unmarried spouses who have lived together and other unmarried couples lies in the different legal issues that arise when these different sorts of relationship come to an end. Here's a summary:

Unmarried Spouses
(together for two years or more)
Unmarried Spouses
(together for less than two years)
Other Unmarried Couples
Divorce
Guardianship Yes Yes Yes
Parental Responsibilities and
Parenting Time
Yes Yes Yes
Contact Yes Yes Yes
Child Support Yes Yes Yes
Spousal Support Yes Yes
Family Property and
Family Debt
Yes
Protection Orders Yes Yes Yes
Financial Restraining Orders Yes

Issues relating to the care and financial support of children born to unmarried people are fairly straightforward, since legal issues about children mostly depend on whether someone is a parentIn family law, the natural or adoptive father or mother of a child; may also include stepparents, depending on the circumstances and the applicable legislation; may include the donors of eggs or sperm and surrogate mothers, depending on the circumstances and the terms of any assisted reproduction agreement. See "adoptive parent," "natural parent" and "stepparent.", not on the nature of the relationship between the parties. Only married spouses and unmarried spouses who have lived together for at least two years or have a child together can make claims for spousal support, and only married spouses and unmarried spouses who have lived together for at least two years can make claims for the division of property and debt.

Deciding whether a cohabitation agreement is appropriate

The most common reason why a couple enters into cohabitation agreements is to protect their separate property and income, so that each person's property going into a relationship is preserved as much as possible if the relationship comes to an end. Sometimes one person wants to preserve property from claims by the other person; sometimes a person will want to protect property from the other person's debts. Generally speaking, most couples who are thinking about executing a cohabitation agreement want a "I'll keep what's mine, you'll keep what's yours" sort of deal, and that's fine.

A couple might also enter into a cohabitation agreement to address spousal support if the relationship comes to an end. Sometimes a person will want to guarantee a certain minimum payment, but most often people want to be protected from having to pay spousal support. That's fine too, it happens all the time.

Cohabitation agreements are usually entered into when:

  • the relationship is expected to be a long one,
  • one or both parties have a substantial amount of property going into the relationship,
  • one or both parties have significant debts going into the relationship,
  • one of the parties has significantly more income than the other,
  • one or both parties expect to acquire property during the relationship from, for example, a business, an inheritanceReal property or personal property received as a result of the provisions of a will or the ''Estate Administration Act''. Inheritances do not usually qualify as family property subject to division between spouses. See "family property," "real property" and "will.", a court award, a giftA voluntary transfer of property from one person to another, without expectation of payment or reward. Gifts to one spouse do not usually qualify as family property, and are excluded from the pool of property to be divided. See "donee," "donor," "excluded property," and "family property.", or employment income,
  • one or both parties are bringing a child into the relationship,
  • the parties expect to have child within the first two years of living together, or
  • the parties expect that spousal support may be an issue if the relationship ends.

Cohabitation agreements are generally not appropriate when:

  • the couple are young,
  • neither partyIn law, a person named as an applicant, claimant, respondent or third party in a court proceeding; someone asserting a claim in a court proceeding or against whom a claim has been brought. See "action" and "litigant." has significant property or debt going into the relationship,
  • neither party is bringing any children into the relationship and no children are expected right away, or
  • both parties are working out of the home and expect to continue working out of the home.

On top of these considerations, the Family Law Act also says that an agreement made before the parties have separated cannot deal with:

  1. parental responsibilitiesA term under the ''Family Law Act'' which describes the various responsibilities exercised by guardians in the care, upbringing and management of the children in their care, including determining the child's education, diet, religious instruction or lack thereof, medical care, linguistic and cultural instruction, and so forth. See "guardian." and parenting timeA term under the ''Family Law Act'' which describes the time a guardian has with a child and during which is responsible for the day to day care of the child. See "guardian.", or
  2. child supportMoney paid by one parent or guardian to another parent or guardian as a contribution to the cost of a child's living expenses..

Cohabitation agreements can also be useful to set rules for how the parties will manage things during the relationship, although this type of cohabitation agreement is fairly rare. When a cohabitation agreement is needed to deal with those issues, the parties' financial positions may not be relevant.

The usual sort of things a household management type of cohabitation agreement might be intended to address include:

  • Who will pay for the household expenses? Will each party pay for a specific set of bills, or will the parties share in all the bills in a fixed amount?
  • Will the parties keep separate bank accounts, or will they have a joint accountA bank account owned by more than one person, normally with an equal entitlement to deposit or withdraw, with or without the consent of the other account holders. for household costs? If there is a joint account, how will each party contribute to the account?
  • Who will do the household chores? Will each party be responsible for a list of particular tasks?
  • How will children brought into the relationship be cared for? Will the other party assume any parenting tasks?

If, at the end of the day, a cohabitation agreement is appropriate and desirable, the parties will negotiate the terms of the agreement, and someone, whether a lawyerA person licensed to practice law in a particular jurisdiction. See "barrister and solicitor." or one of the parties, will draftA preliminary version of a document; an order prepared following judgment submitted to the court for its approval; to prepare, or ''draw,'' a legal document. the written agreement. As with all family law agreements, it's important that both parties get independent legal advice about what exactly the agreement means, how it affects their present rights and responsibilities towards one another, and how it will affect those rights and responsibilities if their relationship comes to an end. Getting independent legal advice strengthens the agreement by preventing one spouseUnder the ''Divorce Act'', either of two people who are married to one another, whether of the same or opposite genders. Under the ''Family Law Act'', married spouses, unmarried parties who have lived together in a marriage-like relationship for at least two years, and, for all purposes of the act other than the division of property or debt, unmarried parties who have lived together for less than two years but have had a child together. See "marriage" and "marriage-like relationship." from saying "I didn't know what it meant!" if the agreement is challenged later on.

Finally, a good cohabitation agreement should specify what will happen if the parties marry. The agreement could continue in effect after the marriage, terminate when the parties are married, or be reviewed and revised by the parties at the time of the marriageA legal relationship between two persons, whether of the same or opposite genders, that is solemnized by a marriage commissioner or licenced religious official and gives rise to certain mutual rights, benefits and obligations. See also "conjugal rights," "consortium" and "marriage, validity of.". In any caseIn law, a court proceeding; a lawsuit; an action; a cause of action; a claim. Also the historic decisions of the court. See "action," "case law, " "court proceeding," and "precedent.", the prospect of marriage and its impact on the cohabitation agreement should be dealt with in some manner.

Avoid do-it-yourself cohabitation agreement kits

Staples, Chapters, London Drugs and other stores generally carry a wide range of DIY legal products, from doing your own will to getting your own divorceThe legal termination of a valid marriage by an order of a judge; the ending of a marital relationship and the conjugal obligations of each spouse to the other. See "conjugal rights," "marriage," and "marriage, validity of.".

In my view most of these do-it-yourself kits are fine for most people most of the time. However, cohabitation agreements can be complicated and must be drafted with a good knowledge of family law, cohabitation agreements in particular, and the general law applicable in British Columbia. Using a do-it-yourself cohabitation agreement kit is really not a good strategy.

If you figure that you absolutely must have a cohabitation agreement, it's well worth spending $1,500 to $4,000 to have a lawyer draw it up correctly for you, rather than spending $15,000 to $40,000 on lawyer's feesThe money charged by a lawyer to his or her client for the lawyer's services, usually pursuant to the terms of the lawyer's retainer agreement. Most lawyers bill by the hour with a premium for success or the difficulty or novelty of the case. A lawyer's bill may include "disbursements," costs incurred by the lawyer for such things as courier fees, court fees or photocopying expenses. See "account" and "certificate of fees." down the road if the agreement is flawed.

Legal and formal requirements of a cohabitation agreement

The point of entering into a cohabitation agreement is so that, at some later time, the contract will be enforceable in court if the parties fail to live up to it. As such, a cohabitation agreement, just like any other family law agreementAn agreement between two or more persons about family law issues that have arisen or made arise, dealing with their respective rights and obligations to one another, which the parties expect will be binding on them and be enforceable in court. Typical family law agreements include marriage agreements, cohabitation agreements and separation agreements., must conform to certain basic rules, including the following:

  • A cohabitation agreement must be in writing.
  • The agreement must be signed by each party, and should be signed in the presence of a witnessA person with person knowledge of things; a person giving oral evidence in court on oath or affirmation as to the truth of the evidence given. See "affirm," "evidence," "oath" and "opinion evidence.". Although an agreement made without a witness can still be valid and bindingIn law, a requirement or obligation to honour and abide by something, such as a contract or order of the court. A judge's order is "binding" in the sense that it must be obeyed or a certain punishment will be imposed. Also refers to the principle that a higher court's decision on a point of law must be adopted by a lower court. See "contempt of court" and "precedent.", it is a very good idea to have a witness (or witnesses) because she (or they) can confirm that the parties signed the agreement. In addition, sections 94 and 165 of the Family Law Act provide that a court cannot make an orderA mandatory direction of the court, binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. See "appeal," "consent order," "decision" and "declaration." about division of property and debt or spousal support that has been dealt with in a written, witnessed agreement between the parties unless the court has set aside the agreement.
  • Neither party should be under a legal disabilityIn law, a legal incapacity to do certain things, like enter into a contract or start a court proceeding. Legal disabilities include insanity and being under the age of majority. See "age of majority." when signing the agreement, however children who are parents or spouses may enter into a binding agreement.
  • The agreement must clearly identify the parties and the nature of their rights and obligations to one another.

In addition to these simple formalities of a family law agreement, you might want to think about certain other principles of contract lawThe branch of law dealing with the interpretation and enforcement of contracts. The principles of contract law are usually but not always applicable to family law agreements. such as these:

  • The parties must each enter into the agreement of their own free will, without any coercionThe use of force or intimidation, whether emotional or physical, to compel another person to do something; interference with another person's freedom of choice to obtain an outcome, action or behaviour. or duressForcing someone to do something though psychological or emotional pressure; a defence to the enforcement of a contract. If, for example, a separation agreement was entered into under duress, that may be a ground to dispute or set aside that agreement. by the other party, or by anyone else for that matter.
  • Both parties must make full and complete disclosureA step in a court proceeding in which each party advises the other of the documents in his or her possession which relate to the issues in the court proceeding and produces copies of any requested documents before trial. This process is regulated by the rules of court, which put each party under an ongoing obligation to continue to advise the other of new documents coming into their possession or control. The purpose of this step is to encourage the settlement of court proceedings and to prevent a party from springing new evidence on the other party at trial. of their circumstances going into the agreement. This disclosure should include complete information about the parties' assets and debts, as well as information about the values of the assets and amounts owing on the debts.
  • The parties cannot make an illegal bargain, that is, they can't make an agreement that obliges them to do something against the law.
  • Where an agreement is prepared by one party's lawyer and the other party doesn't have a lawyer, any portions of the agreement that are vague may be interpreted in favour of the party who didn't have the lawyer.
  • The court will attempt to give effect to a contract wherever possible, that is, it will attempt to give meaning to the terms of a contract rather than declare it void.
  • If a term of a cohabitation agreement is found to be invalid, only the invalid part of the agreement will stop being in effect. The remainder of the agreement will continue to be valid and binding on the parties.

Aside from these considerations, it's also important to remember that cohabitation agreements that deal with property and debts or issues like spousal support are usually only meant to be used when the relationship comes to an end, at some unknown time in the future. As a result, it can be difficult to guess what each party's situation will be like when the agreement begins to operate and guess whether it will still be appropriate and fair. Because of these problems, hiring the services of a lawyer to prepare a cohabitation agreement is highly recommended. Crafting a solid cohabitation agreement is a tricky business at the best of times.

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