Whether you know it or not, you may be in a common law relationship. A common law relationship is where two individuals live together as a couple but are not legally married. A common misconception amongst partners is that a certain period of time must elapse before a relationship is considered ‘common law’. There is also a similar misconception regarding when a common law spouse may attain a proprietary interest over your property. The reality is, in Alberta, you or your partner may have a claim to each others’ property despite only living together for as little as one day!
When common law relationships end, the division of debts and assets often become a point of disagreement. To mitigate these issues, common law couples often enter into a Cohabitation Agreement. Much like a marriage agreement or prenup, a Cohabitation Agreement is a legally binding contract between two individuals which determines how assets will be divided if the relationship ends.
If you are currently living with your partner, you and your assets will be better protected if you have a Cohabitation Agreement in place. However, there are situations where it is especially important to establish such agreements. The following are the top five reasons why you should consider a Cohabitation Agreement;
1. You have been previously married.
If you or your partner have been previously married, your legal and financial concerns often require more attention. For instance, you may have children from your previous marriage, support obligations, or own a home or another significant asset. A Cohabitation Agreement can ensure that if you separate or pass away, your assets are distributed according to your wishes.
You own or are part-owner, of a business.
Business assets are often overlooked when it comes to common law relationships. However, without a Cohabitation Agreement, your partner could end up owning a share of your business if your relationship ends. If a properly executed Cohabitation Agreement is in place, you can ensure your ex-partner does not become an unwanted owner of your business.
You want to protect a dependent partner.
During your relationship, one partner may interrupt their career to raise children, relocate to another part of the country, or sustain an unforeseen injury or illness. In these events, a Cohabitation Agreement can be used to protect against some of these financial uncertainties.
You are financially stronger than your partner.
If you are significantly wealthier than your partner or earn significantly more money, a Cohabitation Agreement can be used to protect your wealth and income. The greater the financial disparity between you and your partner, the more likely a court will intervene if there isn’t a Cohabitation Agreement in place.
You purchased, or plan to purchase, a home together.
Typically, when couples purchase a home together, they do not provide equal financial contributions. It is often the case that one individual will contribute more to the down payment and the initial costs of the home. Without a Cohabitation Agreement, your home is likely to be shared equally upon separation. If you want to protect your initial deposit, it is in your best interest to enter into a Cohabitation Agreement.
Are You Looking for a Cohabitation Agreement?
While you are not required to hire a lawyer to make a Cohabitation Agreement, it is wise to seek legal guidance. It is important to understand your rights and responsibilities, both before and after the Agreement is in place. It is also important to ensure that your Agreement is written so that it satisfies the necessary requirements in order to make it legally binding.
If you are interested in learning more about Cohabitation Agreements, contact us at Lift Legal. Our lawyers at Lift Legal take the time to understand your situation so that we can meet your needs. Give us a call today to schedule a consultation and let us show you how we can help!