Moving In Together? What to Know About Cohabitation Agreements
Taking the next step in your relationship by moving in together is exciting, but have you considered the practical implications of combining your lives? While discussing legal agreements might not be the most romantic conversation, understanding cohabitation agreements could save you from significant stress and financial uncertainty down the road.
What Exactly Is a Cohabitation Agreement?
A cohabitation agreement is a written contract between partners who are living together (or planning to) that outlines how you'll handle finances, property, and other important matters during your relationship, as well as what will happen if things don't work out as planned. The purpose is to create clarity and protect the interests of both partners. Both married couples and common-law spouses can enter into a cohabitation agreement.
When Does a Relationship Become "Common-Law" in BC?
Under BC's Family Law Act, you're considered spouses if you've:
Lived together in a marriage-like relationship for at least two years, OR
Have a child together (please note that this has different implications for property division)
Once you hit that two-year mark, the law treats your relationship much like a legally binding marriage when it comes to property division and spousal support, which might come as a surprise if you thought "just living together" meant fewer legal obligations.
Why Consider a Cohabitation Agreement?
You're bringing significant assets into the relationship. Maybe you've worked hard and saved for years to buy your first home, or you've built up a healthy investment portfolio. A cohabitation agreement can protect what you've already accumulated.
There's a disparity in income or debt. If one partner earns significantly more or carries substantial debt, an agreement can clarify expectations and prevent future disputes.
You have children from previous relationships. Protecting their inheritance and clarifying financial responsibilities becomes even more important.
You want certainty. Rather than leaving things to chance (and potentially expensive legal battles), you're creating a clear framework for your shared life.
What Can You Include in Your Agreement?
These agreements are flexible, tailored to what is important to you and your partner. Here's what couples typically address:
Property and Asset Division: Who keeps what if you separate? This includes everything from real estate to that vintage car you inherited from your grandpa.
Debt Responsibility: How will you handle existing debts and any new ones incurred during the relationship?
Financial Contributions: Will you split expenses 50/50, proportionally based on income, or some other arrangement?
Spousal Support: Will either partner be entitled to financial support if the relationship ends?
Day-to-Day Finances: Joint accounts or separate? Who pays which bills?
Future Changes: What happens to your agreement if you get married or there is another change in circumstances?
What's Off-Limits?
While cohabitation agreements are flexible, they can’t cover everything. You cannot make binding decisions about:
Child custody or parenting time
Child support obligations
Any arrangements that would harm children's interests
The law recognizes that children's needs must be determined based on their best interests at the time of separation, not predetermined in an agreement.
Why Professional Help Matters
You might be thinking, "Can't we just write this up ourselves?" While it's fully possible, here's why that's risky:
Legal Requirements Must Be Met: Your agreement must be written, signed by both parties, and witnessed. It also needs to include full financial disclosure and be fundamentally fair to both parties.
Courts Can Overturn Unfair Agreements: If a judge finds your agreement significantly unfair, unclear, or signed under pressure, they can set it aside. This can also lead to unexpected litigation costs.
One Size Doesn't Fit All: Online templates and resources are designed to be generic and may overlook crucial elements specific to your situation.
Where to Start?
Start with Honest Conversations: Before going to a lawyer, have honest discussions about your values, financial goals, and expectations. A cohabitation agreement isn't just about protecting assets, as it's also about ensuring you're on the same page for your future together.
Full Financial Disclosure: Both partners must disclose all relevant information, including assets, debts, income, and any other relevant details. Hidden surprises can invalidate your entire agreement.
Get Independent Legal Advice: Yes, you each need your own lawyer. This might seem excessive, but it's important for ensuring the agreement is fair and enforceable. One lawyer can draft the agreement, and the other can review it and advise their client.
Review and Sign: Once both lawyers have provided advice and you're both comfortable with the terms, sign the agreement with witnesses present.
Keep It Current: Life changes, so consider including a review clause to revisit the agreement periodically or after significant life events.
Talk to a Lawyer at Mountain Peak Law Today
If you're moving in together or already sharing a home, consider whether a cohabitation agreement makes sense for your situation.
Creating a cohabitation agreement isn't about planning for failure—it's about building a strong foundation based on transparency and mutual respect. By addressing important financial and property matters now, you protect both yourself and your partner from future uncertainty.
Ready to explore whether a cohabitation agreement is right for you? Make an appointment with a family law professional at Mountain Peak Law who can guide you through the process and ensure your agreement meets all legal requirements while reflecting your unique situation and goals.
