Difference between revisions of "Cohabitation and Living Together Agreements"

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#if they've lived together for a shorter period of time and have a child together.
#if they've lived together for a shorter period of time and have a child together.


Unmarried couples, including unmarried spouses, are not legally married to one another, and they'll stay that way until they are formally married. For the purposes of this discussion, the critical distinction between married spouses, and unmarried spouses and other unmarried couples w lies in the different legal issues that arise when these different sorts of relationship come to an end. Here's a summary:
Unmarried couples, including unmarried spouses, are not legally married to one another, and they'll stay that way until they are formally married. For the purposes of this discussion, the critical distinction between married spouses, and unmarried spouses 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:
 


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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. With respect to spousal support and the division of property and debt, only married spouses and unmarried spouses may make these claims.
 
Issues relating to the care and control and financial support of children born in the relationship are fairly straightforward, since the claim mostly depends on whether someone is a parent, not on the nature of the relationship between the parties. With respect to spousal support, only married and common-law couples may make a claim. Issues relating to property are a bit more complex.
 
Only married couples can make a claim for the division of assets under the Family Relations Act. Since unmarried couples can't apply for the division of assets under the Family Relations Act, they can only make a claim against assets owned by the other under the law of trusts, usually the law relating to constructive trusts, express trusts or resulting trusts. (If the couple jointly owns real property together they can also make a claim under the Partition of Property Act.) Trust claims are a lot more complex than making a claim under legislation, and, even if the trust claim is successful, the amount awarded is generally a lot less than what the result would have been had the couple been married.
 
Trust claims to assets are discussed in the chapter Family Assets > Dividing Assets.


===Deciding Whether a Cohabitation Agreement is Appropriate===
===Deciding Whether a Cohabitation Agreement is Appropriate===


The usual reason why a couples enter into cohabitation agreements is to protect their respective property and finances, so that each party's assets going into a relationship are preserved as much as possible if the relationship comes to an end. Sometimes one party wants to preserve property from claims by the other party; sometimes a party wants to protect property from the other party'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. Curiously, as was just mentioned and as will be explained later in more detail, this is precisely the wrong reason to have a cohabitation agreement.
The usual 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.


Cohabitation agreements are usually entered into when:
Cohabitation agreements are usually entered into when:


the relationship is expected to be a long one;
#the relationship is expected to be a long one;
one or both parties have a substantial amount of assets going into the relationship;
#one or both parties have a substantial amount of property going into the relationship;
one of the parties has significantly more income than the other;
#one or both parties has significant debts going into the relationship;
the couple anticipate living in a home owned by one of the parties;
#one of the parties has significantly more income than the other;
one or both parties expect to acquire substantial assets during the relationship from, for example, a business, an inheritance, a court award, a gift or employment income;
#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 has significant debts going into the relationship;
#one or both parties is bringing a child into the relationship; or,
one or both parties is bringing a child into the relationship; or,
#the parties expect that spousal support may be an issue if the relationship ends.
the parties expect that spousal support may be an issue if the relationship ends.


Cohabitation agreements are generally not appropriate when:
Cohabitation agreements are generally not appropriate when:


the couple are young;
#the couple are young;
the point of the agreement is to avoid sharing assets that are brought into or acquired during the relationship;
#neither party has significant property or debt going into the relationship;
neither party has significant assets or income going into the relationship;
#neither party is bringing any children into the relationship; or,
neither party is bringing any children into the relationship; or,
#both parties are working out of the home and expect to continue working out of the home.
both parties are working out of the home and expect to continue working out of the home.
 
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.
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 issues a household management type of cohabitation agreement might be intended to address include:
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?


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?
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.
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 responsibilities?
If, at the end of the day, a cohabitation agreement is appropriate and desireable, 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 is 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 that the agreement will terminate if the parties marry, or that the agreement will become a marriage agreement if the parties marry. Either way, the prospect of marriage and its impact on the cohabitation agreement should be dealt with in some manner.
Finally, a good cohabitation agreement should specify that the agreement will terminate if the parties marry, or that the agreement will become a marriage agreement if the parties marry. Either way, the prospect of marriage and its impact on the cohabitation agreement should be dealt with in some manner.
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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.
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. They are not fine for cohabitation agreements. Cohabitation agreements can be terribly complicated, more so than marriage agreements or separation agreements, and must be drafted with a good knowledge of family law in general and cohabitation agreements in particular. I really encourage you against do-it-yourself cohabitation agreement kits.
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 in general, cohabitation agreements in particular and the law applicable in British Columbia. I really encourage you against do-it-yourself cohabitation agreement kits.


If you figure that you absolutely must have a cohabitation agreement, it's well worth $1,500 to $4,000 to pay a lawyer to draw it up correctly for you, rather than spend $15,000 to $40,000 on lawyer's fees down the road if the agreement is flawed.
If you figure that you absolutely must have a cohabitation agreement, it's well worth $1,500 to $4,000 to pay a lawyer to draw it up correctly for you, rather than spend $15,000 to $40,000 on lawyer's fees down the road if the agreement is flawed.

Revision as of 17:51, 8 March 2013

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

DRAFT

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, and 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. As a result, it's important to understand exactly how the legal status of unmarried couples differs from that of married couples before even thinking about the idea of a cohabitation agreement.

Married couples have been legally married, either by a civil ceremony performed by a marriage commissioner or in a religious ceremony performed by a religious official. An unmarried couple will become "spouses" for the purposes of the Family Law Act:

  1. once they've lived together in a marriage-like relationship for two years; or,
  2. if they've lived together for a shorter period of time and have a child together.

Unmarried couples, including unmarried spouses, are not legally married to one another, and they'll stay that way until they are formally married. For the purposes of this discussion, the critical distinction between married spouses, and unmarried spouses 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 Other Unmarried Couples
Divorce
Guardianship Yes Yes
Parental Responsibilities and
Parenting Time
Yes Yes
Contact Yes Yes
Child Support Yes Yes
Spousal Support Yes
Family Property and
Family Debt
Yes
Protection Orders 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. With respect to spousal support and the division of property and debt, only married spouses and unmarried spouses may make these claims.

Deciding Whether a Cohabitation Agreement is Appropriate

The usual 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.

Cohabitation agreements are usually entered into when:

  1. the relationship is expected to be a long one;
  2. one or both parties have a substantial amount of property going into the relationship;
  3. one or both parties has significant debts going into the relationship;
  4. one of the parties has significantly more income than the other;
  5. 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;
  6. one or both parties is bringing a child into the relationship; or,
  7. the parties expect that spousal support may be an issue if the relationship ends.

Cohabitation agreements are generally not appropriate when:

  1. the couple are young;
  2. neither party has significant property or debt going into the relationship;
  3. neither party is bringing any children into the relationship; or,
  4. both parties are working out of the home and expect to continue working out of the home.

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 that the agreement will terminate if the parties marry, or that the agreement will become a marriage agreement if the parties marry. Either way, 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 in general, cohabitation agreements in particular and the law applicable in British Columbia. I really encourage you against do-it-yourself cohabitation agreement kits.

If you figure that you absolutely must have a cohabitation agreement, it's well worth $1,500 to $4,000 to pay a lawyer to draw it up correctly for you, rather than spend $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 set out in writing. The agreement should be signed by each party in the presence of a witness. The parties shouldn't be under the age of majority or suffer from any other legal disability. 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 proper family law agreement, certain principles of contract law should also be considered, including the following:

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. Both parties must make full and complete disclosure of their circumstances going into the agreement. The parties cannot make an illegal bargain, that is, they can't form an agreement which obliges them to do something illegal or otherwise 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 agreeement 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, they 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 fails. The remainder of the agreement will continue to be valid and binding on the parties. Aside from these considerations, it is also important to remember that cohabitation agreements dealing with assets or issues like spousal support are usually only meant to be used when the relationship comes to an end, at some uncertain time in the future. While separation agreements are intended to work immediately from the moment they are signed, cohabitation agreements aren't usually intended to work until some unknown future date. As a result, it can be extremely difficult to guess what each party's situation will be like in the future and decide whether the agreement will remain appropriate, fair and relevant to their circumstances. Because of these problems, hiring the services of a lawyer to prepare the agreement is highly recommended. Crafting a solid cohabitation agreement is a tricky business at the best of times.

Finally, you should also know that the courts will rarely — if ever — uphold an agreement which attempts to contract out of a statutory obligation. Child support, for example, is a positive, almost absolute obligation a parent has towards his or her children. A court is not likely to allow an agreement to stand which provides that a parent will never have to pay child support who would otherwise be obliged to provide support.

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