Entering Into a Common-Law Relationship? You Should Seriously Consider a Cohabitation Agreement.

It can be a very exciting time when you decide to move in with your partner. It is important, however, to not let that excitement overshadow the reality of what you are getting yourself into. Moving in with your partner affects your rights regarding your assets, your income, and your children (if you have any or plan to have any). Many people may think that this only happens when you get married, and in actuality, that is not the case. Common-law couples have rights too.

How do you protect yourself?

No one wants to think that things could potentially not work out, but if your relationship were to dissolve, you will be very happy and relieved to know that you are protected. Some may say it is ‘unromantic’, but, it is the wise thing to do!

It’s called a “Cohabitation Agreement”. This legal document can be used for heterosexual or homosexual couples. You can think of this Agreement as a way of being proactive, should any problems arise in the future. It is an opportunity to set parameters individually suited to you and your partner. It will save you both from unnecessary costs and litigation, should you decide to go your separate ways. As the saying goes, “It is much better to be proactive than reactive”.

When are Cohabitation Agreements made?

Ideally, Cohabitation Agreements are made before people move in together, but they can also be made between partners who are already living together. It is in the best interest of both parties to do this as soon as possible.

What are the goals of a Cohabitation Agreement?

  • To ensure that both parties understand what their legal rights and obligations are.
  • To help protect individual assets, income, and children.
  • To have a plan in place should you separate, or in the unfortunate event that your partner should pass away.

What are the top reasons for getting a Cohabitation Agreement?

(1) To Protect Your Property – You can outline what property can be split and how it will be split. If you own the home that you will both be living in, chances are you will not want to give that up should you breakup. You can also protect any other property you bought prior to cohabitating.

(2) To Protect Your Wealth – If you are earning more money and/or are much wealthier than your partner, you would not have to worry about losing everything that you have worked so hard for.

(3) To Protect Your Inheritances

(4) To Agree How Joint Debts Will Be Paid

(5) To Indicate Whether or Not Spousal Support Will Be Paid

(6) To Protect Your Business – If you do not have a Cohabitation Agreement in place, your partner could essentially end up owning part of your business (whether you have other business partners or not). As you can imagine, this could end up being extremely stressful emotionally and financially. Business partners will often have this requirement in place to protect themselves.

(7) To Protect Your Estate Plan – If you pass away, it will ensure that your assets are distributed as you wish. It will prevent your partner from overturning your estate plan.

It is very important that both parties get independent legal advice about what exactly their Cohabitation Agreement means. This will prevent one partner from saying “I didn’t know what I was signing!” should they try to challenge the Agreement.

A Cohabitation Agreement turns into to a Marriage Agreement if the couple marries.

Contact Clean Divorce today for a FREE 20 minute consultation with Rahul about Cohabitation Agreements in BC to answer any questions that you may have. Your future self will thank you for entering your common-law relationship with a feeling of security and peace of mind!