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Prenuptial & Cohabitation
Prenuptial Agreements
No one wants to think about the possibility of separation and divorce when they marry, but statistics show that thirty-eight percent of all Canadians who marry will separate or divorce. So, one does well to prepare and plan for what will happen to their hard-earned assets if their relationship fails… just in case.
The law sets out what will happen to your property if you separate without an agreement in place. But you and your loved one can stay in the drivers’ seat by taking courage and creating an agreement or marriage contract between yourselves about the details of your separation, if that must ever happen. You can make valid binding agreements with different terms and conditions from those provided for by the Family Law Act and the Divorce Act. However, you cannot make enforceable arrangements about custody, access or child support in these agreements. The law concerning children is based on the belief that the circumstances concerning the best interest of the children may always be changing, so issues concerning them may only be decided at the time of separation.
You may however agree on:
- What property you are both bringing into the marriage and how much of its value you wish to keep separate throughout the marriage;
- How your personal and family property will be dealt with if separation occurs;
- Whether and what amount of spousal support will be payable upon separation;
- Allocating economic responsibility for running the household during the marriage; and
- Agreeing on what happens to property if you should die.
Cohabitation agreement
Nearly half of all Canadian couples live common-law which means that they do everything that married couples normally do, except that it is outside of the contract of legal marriage. However it is important to know that, unlike legally married couples, common-law couples are not entitled to Equalisation of Net Family Property or to possession of the family home upon separation. In addition, it is challenging to prove who created which assets or liabilities and therefore proving ownership of that asset or responsibility for a debt at separation is challenging and time-consuming without documentation.
Cohabitation Agreements are meant to set out who retains ownership of what, if and when the relationship ends; who will move out of the family home; if and how much support will be paid and by whom, and how property will be divided. You can determine how debts created in the relationship will be settled as well, differentiating between family debt and personal debts.
These agreements are legally enforceable, so whether you are seeking to have one done, already have one and need some legal advice on changes to it, or are considering marriage and want to change the Cohabitation Agreement to a Prenuptial Agreement you and your partner should each seek Independent Legal Advice.
At Sterling Law, we listen to your concerns, gain an understanding of the type of security you want or need and create a legal structure to create it … all with an understanding of what is truly enforceable and what is not. We never plan for a break-up but if it must happen, ensure that your strategy is to be prepared for a smooth transition and not to be left at the mercy of the circumstances that may exist at the end of your relationship.
