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 property and debt will be divided or whether spousal support 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 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 arrangements and contact.

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

  1. they've lived together in a marriage-like relationship 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 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.

In some situations, an unmarried couple can become spouses for the purposes of the Family Law Act if they have been in a marriage-like relationship for two years, even if they do not live together in the same house all of the time. In other situations, an unmarried couple may not become spouses even after living together for two years, if they are not in a marriage-like relationship. If you are not sure about whether you would be a spouse for the purposes of the Family Law Act, it is good idea to get legal advice about this issue as part of deciding whether you need an agreement.

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 parent, 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 inheritance, a court award, a gift, 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 party 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, and
  • 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 responsibilities and parenting time, or
  2. child support.

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 account 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 lawyer or one of the parties, will draft 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 spouse 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 marriage. In any case, 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 divorce.

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 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 agreement, 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 witness. Although an agreement made without a witness can still be valid and binding, 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 order 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 disability 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 law such as these:

  • The parties must each enter into the agreement of their own free will, without any coercion or duress by the other party, or by anyone else for that matter.
  • Both parties must make full and complete disclosure 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.

Resources and links

Legislation

Links


This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Beatrice McCutcheon, February 22, 2017.


Creativecommonssmall.png JP Boyd on Family Law © John-Paul Boyd and Courthouse Libraries BC is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 2.5 Canada Licence.
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