BY VALERIE DYE
Part IV of the Family Law Act sets out provisions to allow persons to enter into agreements in order to regulate their matrimonial affairs. The most common type of domestic contract in Ontario is the Separation Agreement which some couples enter into upon the breakdown of a relationship. A fewer number of persons enter into a marriage contract either before marriage or after they become married.
It is less common for unmarried or common law spouses to enter into a domestic contract. Part of the reason for this is that many persons are unaware of the provision of the Family Law Act which recognizes the existence of Cohabitation Agreements. Under section 53 of the Family Law Act spouses who are merely cohabiting and are not legally married may enter into a domestic contract to regulate their affairs. Section 53 of the Family Law Act provides as follows:
Two persons who are cohabiting or intend to cohabit and who are not married to each other may enter into an agreement in which they agree on their respective rights and obligations during cohabitation, or on ceasing to cohabit or on death, including: ownership in or division of property; support obligations; the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and any other matter in the settlement of their affair.
Given the fact that common law spouses do not enjoy the same legal rights as married spouses upon termination of a relationship, a Cohabitation Agreement can be a useful tool to ensure that they enjoy similar rights. For instance, although the equalization of family property does not apply to common law spouses, there is nothing to prevent those spouses from entering into a Cohabitation Agreement which states that in the event of separation the party who has a higher value in assets will pay to the other party half of the difference in value between them. Furthermore, common law couples may also agree that even if property in which they reside is held only in the name of one party that property will be divided between them in the event of separation. Couples may also make agreements regarding division of pension and RRSP’s and the payment of spousal support. If a Cohabitation Agreement is well drafted common law couples may be able to enjoy the same rights as married couples if their relationship ends.
Apart from guaranteeing rights for parties in a common relationship a Cohabitation Agreement may also protect parties from certain obligations. For instance, common law spouses may be entitled to spousal support if they have cohabited for a period of three years or more or if they are in a relationship of some permanence by virtue of have a child or children together. Signing a Cohabitation Agreement may protect one party or the other from such obligations.
According to section 53 (2) of the Family Law Act, if parties to a Cohabitation Agreement eventually marry, the Cohabitation Agreement will be deemed to be a marriage contract.