Deciding not to get married doesn’t mean that couples are not committed to each other.
However, if these relationships end, parties can face similar challenges to people who get divorced, including who gets to keep which property. This is especially true for people who own a home or other significant asset. Because of this, it can be wise to take precautions that can protect you and your property if you are unmarried but living (or plan to live) with your partner. One way to do this is to sign a cohabitation agreement.
What is a cohabitation agreement?
A cohabitation agreement is similar to a prenuptial agreement. As this article describes, it is a legal document that specifies financial responsibilities and property ownership for common-law couples. Should the relationship end, the agreement directs parties on how to separate assets and liabilities.
Having this type of agreement in place can also allow couples to avoid legal disputes and complications, as provinces treat property division among unmarried couples differently.
What can be in a cohabitation agreement?
While every case is unique, there are some common clauses most people include in these agreements, such as:
- Specifications on who owns what property
- How you plan to divide assets, like a home you live in together
- Information on individual and shared debts
- Directions on who will take care of pets
- An inventory of separate and jointly-held property
Talking to your partner
It can be uncomfortable to talk about what will happen to your property in the event of a breakup. However, doing so can accomplish some important goals.
First, it can ensure parties are open and honest, and on the same page as each other. Second, it can give each person the opportunity to define their financial goals and priorities. Finally, it can prevent significant anger and confusion if the relationship ultimately odes end.
While this can seem overwhelming, understand that creating a cohabitation agreement can be a vital resource for common-law couples. And know that you can speak with a lawyer to help you navigate the legal process and create an enforceable agreement.