While some people still consider the idea of living together before marriage to be ‘sinful’, the number of cohabiting couples has doubled since the 1990s. In the 2006 census, more than 15 million Canadians reported that they are married or in a common law relationship, nearly 20 percent — or 3 million — are common law. This has led to an increasing amount of complex and often costly legal disputes, when such couples split up.
1 in 4 people believe that common law couples have the same legal protection as married couples do. This is not the case, and it is important to know the difference.
Unlike married couples, common law couples do not have property rights in Ontario. In other words, while married couples enjoy the benefit of an equalization of net family properties, common law couples do not. Equalization is an equal sharing of the increase of the spouses’ net worth from the date of marriage to the date of separation. That being said the same support rights (spousal support and child support) apply to married and common law partners who have lived together for 3 years or more or who have a child together.
Cohabitation Agreements offer the same protection for common law spouses as marriage contracts (often referred to as pre-nups), offer for married couples, or couples who intend to marry. These agreements can deal with property and support much like marriage contracts do.
Cohabitation Agreements can also be very useful for couples who have just started living together who do not necessarily meet the legal definition of a common law couple.
Cohabitation Agreements can deal with property issues including protecting someone’s asset such as a home, how to deal with joint accounts, joint debts and various other scenarios to avoid a battle if there a breakdown of the relationship.
To finalize a Cohabitation Agreement, each partner must retain their own family lawyer. It is imperative that each party have independent legal advice and that full and complete financial disclosure be exchanged. If you think a Cohabitation Agreement may be the right thing for you, or if you have been asked to sign a Cohabitation Agreement, you should speak with a family law lawyer right away.