Cohabitation And Marriage Agreements. Your Most Common Questions Answered.

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Cohabitation and Marriage Agreements can be overwhelming if you don’t know where to start.  As a family lawyer practicing in BC I am frequently asked many questions about marriage agreements.  I am hopeful that this article will help you by answering the most common questions I get asked by friends, family members, current and potential clients.

Do I really need a cohabitation agreement or marriage agreement?

As family lawyers, we cannot make this decision for you and everyone’s needs are unique. If you understand the basic assumptions within family law during a separation, such as 50/50 split of assets and debt acquired during the relationship, including increase in value on anything brought into or acquired during the relationship through inheritance or gift, or potential spousal support entitlements payable, and those determinations do not sit well with you- you SHOULD get a cohabitation agreement or marriage agreement.

Why? Marriage Agreements allow you to better control how your property will be divided and how much spousal support may be payable by either partner should your relationship breakdown. These Agreements are also meant to acknowledge what each partner is bringing into the relationship, how any increase in value will be treated, how gifts, inheritances, settlements, windfalls, and even how pets will be dealt with. You can regain control of the process and set a framework for how everything will be dealt with.

Are marriage agreements worth the paper they are printed on?

Yes.

To help ensure that the Cohabitation or Marriage Agreement is enforceable and that the Court will not overturn it or find the contents significantly unfair to either person, the following should be considered:

  1. be very thorough and include as much detail as possible about each partner’s current and prospective financial future;
  2. hire a lawyer that specializes in family law to draft the Agreement;
  3. provide full financial disclosure;
  4. include a review clause that gives the parties a chance to make revisions periodically, if you will actually do a review;
  5. if either party has a very high current or prospective net worth, include some level of property division;
  6. if there are children or plans for children, include some level of spousal support; and
  7. both parties should have independent legal advice from their own separate lawyer.

If you follow the guidelines listed above, you will avoid many of the pitfalls that have historically made these Agreements unenforceable in the past.

This sounds like a lot of work, where do I even start?

Start with a conversation. The best place to start is to have a very mature and open conversation with your partner about each of your values, financial goals, and ultimately the vision you each have of your future together. Ideally, you will have these conversations early in the relationship to help you to determine if you have a compatible plan with your prospective long-term partner. The sooner you have these conversations, the easier it is to determine if your values and goals line up.

Once you understand both of your intentions and have agreed that a cohabitation agreement or marriage agreement fits the needs of your relationship, one of you should hire a lawyer to start drafting the Agreement. This lawyer will help answer all of your questions and ensure that your intentions are captured within the Agreement.

What if I am already married or considered common-law, do I have options?

Yes.

Cohabitation agreements and marriage agreements can be entered into at any time in the relationship including before you move in together, after living together for two years, or even after being married for any amount of time. However, the difficulty with these Agreements is that they are harder to negotiate since the rights and responsibilities granted by the legislation are already in effect. Thus, there may be less incentive for either party to sign depending on their respective financial position.  For relationships of short duration, especially without children, there may still be negotiating room, but if you’ve been in a relationship for 10 years, negotiations are going to be entirely dependent upon the goodwill of both parties involved.

How do I know if I am in a common-law relationship?

Many people do not know if their relationship is considered common-law. The definition of a common-law relationship varies within Canada.

Federally, individuals are considered common-law if they live together in a conjugal relationship and are not married, for period of 12 or more continuous months (or for CRA purposes have a child together). This is relevant for filing your taxes but is not the definition within the context of family law.

Provincially, each province has a different definition. In British Columbia, an individual is in a common-law relationship if they:

  1. live together in a marriage like relationship for at least 2 years; or
  2. Although they are not common-law, and cannot apply for property division under the Family Law Act, a couple who have a child together are considered spouses for the purpose of spousal support.

Is there legally a difference between being common-law and being married?

The difference between the two has become less obvious after the Family Relations Act was replaced with the Family Law Act in 2013. This is the piece of legislation that governs family law within British Columbia.

With this change in legislation, common-law spouses had the same rights and responsibilities as married spouses. This was a progressive change that placed a higher value on the contributions of a common-law spouse to the relationship and allowed for more equality in the absence of marriage.

The real difference is that when the relationship breaks down, married couples must seek a formal divorce through the Supreme Court of British Columbia, while common-law spouses can separate without formal input from the Court. There are also differences in the limitation periods set on both for when they can seek spousal support or division of property relief from the Court.

This process does not need to be overwhelming. We are here to answer any questions you may have about obtaining a cohabitation or marriage agreement. It is better to know your options and then decide where to go from there. Call 604-974-9529 or get in touch.