When it comes to living together without being married, many couples in British Columbia may not fully understand the possible legal consequences or the importance of protecting their rights and assets. Establishing a cohabitation agreement is a proactive and important step for spouses in safeguarding their interests. This blog delves into the reasons why couples should opt for cohabitation agreements in British Columbia.
1. Protecting Property Rights:
One of the primary advantages of having a cohabitation agreement is the security it provides regarding property rights. In the absence of a legally recognized marriage, unmarried couples aren’t always afforded the same protection under traditional property laws. There are requirements that must be met respecting the length of your common law relationship that do not apply to married couples under the Family Law Act. These requirements vary for the purposes of property division, spousal support and the law may or may not be applicable depending on the facts of your situation.
Spouses and relationships between spouses
3 (1) A person is a spouse for the purposes of this Act if the person
(a) is married to another person, or
(b) has lived with another person in a marriage-like relationship, and
(i) has done so for a continuous period of at least 2 years, or
(ii) except in Parts 5 [Property Division] and 6 [Pension Division], has a child with the other person.
A cohabitation agreement enables spouses to outline specific property expectations, clarify individual ownership, and address any potential complications that may arise if the relationship ends. Right now this is more important than ever. With the rising costs of living expenses we are seeing many parents assist their children by going on title or providing funds for the down payment of a property. It is essential to protect the interest of those involved and further it is crucial to explain clearly in writing what the intention of the parties involvement are. E.g. – is it a gift? Is it a loan? Are the parents on title as true owners? It is crucial to have a well crafted cohabitation agreement and all parties involved should receive independent legal advice prior to signing the cohabitation agreement.
2. Clarifying Financial Obligations:
Cohabitation agreements also play a crucial role in clarifying financial obligations between partners. This includes determining how household expenses will be split, who is responsible for specific bills, and how tax obligations will be handled. By clearly outlining financial expectations in writing, couples can avoid misunderstandings and financial disputes in the future.
We often see that couples do not think about these things when making the decision to move in together. You may end up in a position where you have made significant contribution but it cannot be traced because it wasn’t documented. You could also find yourself in a position where your partner states that they will ‘handle’ all finances leaving you unaware of the family finances. To avoid being taken advantage of, it is imperative to have agreements in place to avoid any unwarranted claims that your spouse may bring against you in the future.
3. Defining Child-Related Matters:
For couples who have children or plan to have them in the future, a cohabitation agreement can help establish parental rights and responsibilities. It can outline parenting time arrangements, child support obligations, and decision-making authority, protecting the best interests of both parents and children.
4. Protection Against Debt Liability:
A cohabitation agreement can clearly define how debt is managed and shared, ensuring that one partner does not end up bearing the brunt of the other’s financial obligations incurred during the relationship.
6. Promoting Open Communication:
Creating a cohabitation agreement requires both spouses to have open and honest conversations about their expectations, interests, and concerns. This process fosters clarity and understanding within the relationship, promoting better communication and conflict resolution skills. Furthermore, it provides an opportunity for couples to establish mutual respect and compromise in defining the terms of their relationship.
By addressing critical legal and financial matters, couples can avoid unnecessary conflicts and protect their interests. While it may be an uncomfortable topic to discuss initially, the proactive creation of a cohabitation agreement can provide peace of mind and strengthen the foundation of a committed relationship.
This blog is not intended to provide legal advice. Each case varies according to its unique facts and the law is applied accordingly. If you have questions respecting your options or you need a cohabitation agreement, call us for a consultation and one of our experienced family lawyer’s will be happy to assist you.
