Whether you’re getting married or planning on moving in with your partner, having a contract in place can save you stress and hardship in the future should your relationship end. Planning for divorce or separation isn’t romantic, but it is important for your future emotional and financial wellbeing.
There are several different types of agreements that can protect you should your relationship end. Here, we’ll dive into the differences between a prenuptial agreement, a marriage contract, and a cohabitation agreement.
Prenuptial Agreement vs. Marriage Contract
In Canada, both a prenuptial agreement and marriage contract refer to the same document. It is a contract both individuals sign before getting married. However, it is possible to create a similar document once you’re already married, which is called a postnuptial agreement.
A prenup is voluntarily signed by both parties in the relationship, including same-sex and heterosexual partnerships. It outlines what will happen to any property brought into the marriage. Additionally, a prenup includes directions for what will happen to each spouse’s assets should they pass away, as well as the terms for spousal support in the case of a divorce.
A common misconception about prenups is that you can include instructions regarding decision-making responsibilities of your children, which is not the case.
Cohabitation Agreement
A cohabitation agreement is a contract similar to a prenup but for unmarried couples. Partners can voluntarily sign a cohabitation agreement before they move in together or after, and it outlines each party’s legal rights.
In the agreement, couples will usually include instructions for any property they independently brought into the relationship, rules for the one spouse to follow if the other one passes away without a will, and a financial agreement regarding spousal support.
In Ontario, under the Family Law Act, common-law spouses have the same rights to spousal support as married couples, as long as they have been living together for at least three years or have a child together and have been living together in a relationship of some permanence. The cohabitation agreement protects the future wellbeing of each spouse should they break up, even if they are never married.
Which One Is Right for You?
If you are already married or are planning on getting married, a prenuptial or marriage agreement may be a suitable contract for you. If you live with a long-term partner or you are planning on living together, a cohabitation agreement could be the correct choice.
Some couples, married or not, choose not to have a contract in place for their relationship. However, we understand how devastating a separation can be both emotionally and financially when these contracts aren’t in place. We strongly recommend couples discuss these options out of love and care for each other’s wellbeing.
Interested in Getting a Prenuptial Agreement or Cohabitation Agreement?
Our team at Gelman & Associates understands how sensitive the topic of prenuptial agreements can be, so we ensure all parties feel supported and taken care of through this process. If you’re interested in learning more about one of these contracts or if you would like to start the process, reach out to us today.
