Moving in with your special someone is exciting. There is lots to get organized and think about as you move forward with your life together.
Part of those considerations is the legal rights and obligations that are created by living together. Not everyone realizes that certain laws apply to them once they move in with their special someone, whether they want them to or not. You can make your own rules with a Cohabitation Agreement.
A Cohabitation Agreement is a written agreement between you and your significant other, that comes into effect when you start living together. The Agreement sets out how you will deal with property and finances (support) in the event your relationship breaks down.
The laws that apply to you and your partner, if you’re unmarried and living together, depends on whether you are adult interdependent partners.
If you are adult interdependent partners, your property will be divided as if you were married. Also, you and your partner may claim partner support from the other.
If you are not adult interdependent partners, the law of unjust enrichment will apply to your property division, in the event of a relationship breakdown.
You and your partner will become adult interdependent partners if you live together in a relationship of interdependence for at least three years or have a child together and have lived together for some permanence. You can also decide to be adult interdependent partners by entering into an Agreement that says you are.
It can be difficult to imagine the possibility of not being together when you’re happy in your relationship. Possible legal implications make it important to plan ahead of time.
It may feel overwhelming to have to think about how you want to deal with things if that happens. This is especially true once you’ve decided to move in together. However, for many partners there are good reasons and advantages to thinking through this unexpected life change. You may decide that a Cohabitation Agreement is beneficial for you and your partner.
The goal of these Agreements is often to create certainty, protect specific assets, and reduce the conflict and stress of a relationship break down.
You and your romantic partner have the option, before or after you have moved in together, to set out in advance what will happen to your home, other property and finances should there be an end to your relationship. You can even choose, ahead of time, to not go to Court and solve your potential disagreements in a private, efficient way.
Agreements typically do not include provisions on parenting or child support, nor lifestyle type clauses. An Agreement can cover financial matters during cohabitation, on separation and death (often in conjunction with a Will). The Agreement can set out different provisions that cover possible scenarios and apply different consequences.
If you and your special someone intend to marry, the Agreement is called the Prenuptial Agreement. If you’re already married, it’s usually called a Marriage Contract. We discuss Prenuptial Agreements separately on their own page.
Cohabitation Agreements aren’t just for partners with pre-relationship or inheritance assets they want to protect.
Thinking about how you want to deal with property acquired during the relationship and the roles each of you play in your family can help to avoid stressful and costly conflict at a very difficult time.
Issues become complicated if you or your partner pass away after separation but before your divorce has been finalized. Cohabitation Agreements can help to ensure your wishes are carried out after a relationship breakdown.
There are benefits to planning ahead.
Separating is hard enough without having to also turn your mind for the first time to how you want to divide your things and solve disagreements. People often make better decisions about how to deal with the logistics of a relationship breakdown before it happens.
Talking this through with your partner when you are in a good space is helpful. The stress of a relationship breakdown often effects the ability of partners to have productive discussions, creatively solve problems and make good decisions.
It is important to have an understanding of the current property and support laws – what property division and spousal/partner support could look like without an Agreement – when thinking about how you would like to structure your Agreement. Knowing the law ahead of time will help you avoid circumstances imposed by the law that may not align with your values and wishes.
Your Agreement must comply with certain legal requirements.
Agreements must follow certain requirements to be effective and valid. To be legally binding in Alberta, your Agreement must comply with the Family Property Act (effective January 2020) or the previous law, if signed before then.
For example, each party must have independent legal advice (their own lawyer) and sign an acknowledgment that each understands the nature and effect of the Agreement and any rights and obligation under the Act they are giving up for the Agreement. In the Family Property Act, if the Agreement is to apply after marriage, it must specify this.
The Family Property Act will apply to married couples and “adult interdependent partners” who separate after January 2020. If this Act does not apply to your relationship, it is still recommended that each party have independent legal advice on the Agreement.
We will help you think this through and discuss things you may want to consider. Helping clients plan for the future and drafting these Agreements is a positive and productive process.