Menu

Jun

2

Cohabitation Agreements: common questions and answers…

cohabitation agreement lawyer michael carabash

Cohabitation Agreement

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to Ontario cohabitation agreements (drafting, reviewing, negotiating one), you should seek professional assistance.

Question #1: What is a Cohabitation Agreement?

A cohabitation agreement is a written agreement entered into between two persons who are cohabiting (e.g. living together) for an extended period of time. In Ontario, a properly drafted and entered into cohabitation agreement allows parties to dictate their financial affairs as they see fit (this doesn’t include however dealing with children). Importantly, a cohabitation agreement AUTOMATICALLY becomes a MARRIAGE CONTRACT (or prenuptial agreement) UNLESS it says otherwise (e.g. if it says that it terminates upon the parties marrying each other). At the end of the day, these agreements allow the parties to have more certainty as to how their property and income will be affected upon death or if they separate from their spouse. These agreements also allow the other side to release them from claims they could make against their estate.

Question #2: Where can I find an Ontario Cohabitation Agreement?

You can find cohabitation agreements that continue past marriage or which terminate upon marriage on THIS WEBSITE.

Our Cohab-O-Matic is like Turbo-Tax for creating an Ontario Cohabitation Agreement.  You can start the Cohab-O-Matic wizard by click on the “Get Started” button below:

The Cohab-O-Matic is an online questionnaire that takes users through a series of questions about their relationship to ultimately create a custom-tailored cohabitation agreement that is based on the laws of Ontario. It asks questions related to:

  • The parties
  • The children of the parties
  • Date of cohabitation
  • Support
  • Description of significant financial assets, debts and other liabilities (required for a cohabitation agreement to be valid and enforceable)
  • The home (ownership of the home, home expenses, leaving the home, selling the home, etc.)
  • When the agreement will terminate
  • Whether the agreement will become a marriage contract if and when the parties marry each other
  • Estate entitlements
  • Alternative dispute resolution (e.g. mediation, arbitration, etc.)

As you can see (or perhaps will see), the Cohab-O-Matic is VERY comprehensive and flexible. Once you’ve completed the online questionnaire, you can proceed to PayPal and then, when you’re done paying, you’ll be able to download your custom-tailored Cohabitation Agreement.

And here’s some more value that we bring to the table: you can edit your Cohabitation Agreement for a set period of time afterwards for FREE, you can read a comprehensive and regularly updated eBook about Cohabitation Agreements in Ontario (to better understand your legal rights and entitlements and how Cohabitation Agreements work and what they’re all about), and you can read the mandatory signing instructions at the end to make sure that enter into the Cohabitation Agreement properly.

And you can do all of these things by yourself with your spouse without the involvement of a lawyer or having to spend thousands of dollars on legal fees.

Question #3: Is a lawyer needed?

Many people think that a lawyer is needed in order for the cohabitation agreement to be legal. This is NOT TRUE. A lawyer is always recommended if you can afford one, but is not a formal requirement under the Family Law Act. Now, importantly, when you have your witness sign, you should (as a precaution) have your witness swear an affidavit that they saw the parties sign.

Question #4: Is a witness needed?

Under the Family Law Act, a witness is needed in order for the cohabitation agreement to be valid and enforceable. The witness DOES NOT need to be a lawyer. It can be a complete stranger. It is a good idea, however, to have your witness swear in an affidavit that they saw the parties signing and that they believed that the parties were of sound mind, etc.

Question #5: Can a cohabitation agreement be challenged?

ANY legal agreement – REGARDLESS of who prepared it – can be challenged! The key is to understand how these agreements can get challenged and then try to mitigate against those challenges. For example, if the terms of the agreement are unclear, vague, open to interpretation, then they can get challenged. If a party was pressured into signing, then the agreement can get challenged. If a party relied upon a statement that turned out not to be TRUE (i.e. a misrepresentation), then the agreement can be challenged. If the agreement contravenes public policy, then it can be challenged. If the parties fail to adequately disclose their financial assets and liabilities to the other party, then the agreement can be challenged. There are lots of ways in which these types of agreements can be challenged and many of them are covered in the two DL guides that come with the cohabitation agreement package.

Question #6: What is the difference between a cohabitation agreement, a prenuptial agreement, and a marriage contract?

All 3 forms are domestic contracts under the Family Law Act. If properly drafted and executed, they allow the parties to bypass or modify the existing regime for property division or support under that Act. The big difference between these three agreements is TIMING: cohabitation agreements are for unmarried couples who are living together; prenuptial agreements are for adults who plan to get married; marriage contracts are for adult couples who are already married.

Question #7: What entitlements does a common law spouse have?

This will depend on the context.

First, absent a cohabitation agreement, a common law spouse may claim SPOUSAL SUPPORT if they meet the definition of a spouse under the Family Law Act. This typically includes the situation where the couple has been cohabiting in a conjugal relationship of some permanence for at least 3 years. IF you have a cohabitation agreement, however, you can avoid paying any spousal support by having the other spouse release you of this liability during and after the period of cohabitation.

Second, absent a cohabitation agreement, common law spouses have NO entitlements under the Family Law Act to the property of the other spouse. This is different from married spouses, who get an EQUALIZATION OF NET FAMILY PROPERTY PAYMENT upon divorce (unless there is a prenuptial agreement, marriage contract, or separation agreement that says otherwise). Now, even though common law spouses have no STATUTORY entitlements to the other spouse’s property (absent a cohabitation agreement), they may still be able to make equitable claims – based on unjust enrichment and constructive trust. You can read up more about this here. Note that that blog post was written before the Supreme Court of Canada held that the resulting trust has no place in family law agreements!

Question #8: If my common law spouse didn’t include me in his or her will, what rights do I have?

Section 58(1) of the Succession Law Reform Act allows a deceased’s dependents to apply to the court for support where the deceased (either through a Will or absent one) has not made adequate provision for their proper support. A dependent is defined under s. 57 of that Act to include your common-law spouse. A dependant may have to prove that they are a dependent and entitled to financial support under s. 58(1) in court. If the court decides that the person is a dependant and that person can show a need for financial support, then it may order that a certain amount of money be paid to them out of the estate.

written by admin \\ tags: , , , , , ,

Comments on this entry are closed.