A divorce is a stressful event in the lives of family members. It may be the best choice but nevertheless it can have a negative impact on the financial, social, psychological, and physical well-being of the couple divorcing and their children. The divorce rate in Canada is approximately 42%. While this number has decreased, it is predicted to increase. Nobody plans to get divorced when they get married and that is why many couples are entering into common-law/cohabitating relationships to avoid all the worry about marriage and divorce. The fact of the matter is that it is common and it is important to know your rights and responsibilities when getting married, divorced or even deciding to cohabit with your partner.
It is important to be prepared for such events in your life, and one way to get started is to have a marriage contract, separation agreement or cohabitation agreement, depending on your circumstances.
Having an agreement in place before such an event arises will save you time, money and unnecessary stress that is often involved during the process.
Marriage Contract | Prenuptial Agreement
Commonly referred to as a ‘prenup,’ a marriage contract, under section 52 Family Law Act, provides an agreement outlining the terms of a marriage. It will address how you and your spouse will divide your finances and assets. Everyone can benefit from a marriage contract, even if you only have a small amount of assets. This agreement will protect your separate property, support your estate plans, define what property is considered marital or not, save money in reducing conflicts, outline special agreements and establish any procedures/protocols you may want to instill for deciding on future matters between you and your partner.
The valuable characteristic about a marriage contract is that the couple have the autonomy to decide everything. If a marriage contract is non-existent, divorce becomes a nightmare and each spouse is essentially left unprotected and vulnerable. By outlining rights and responsibilities, it becomes easier to divide everything and adhere to any special arrangements such as support, property, education and training of children without having a court decide for you. It is the dreaded conversation that no one wants to have before marriage; however, the consequences of this may lead to difficult months and sometimes even years settling everything.
One of the most common mistakes a couple makes regarding marriage contracts is not knowing that they can still enter into an agreement after they are married. Should a couple choose not to address a marriage contract before marriage, they are able to enter into one after marriage as long as they are not doing so with the intention to get divorced in the near future.
Many couples in Canada choose to live together without getting married. Approximately 14% of couples living together are cohabitating in Canada. However, this number does not accurately reflect the real rate of couple cohabitating together, which in fact is much higher, this is because many couples just choose to live together and when their relationship ends, that’s it.
The Canada Revenue Agency considers you to be in a common-law relationship when you have cohabited for 12 months, however, common-law relationships are defined differently all around Canada. It mainly depends on the circumstances of the relationship to consider yourselves in an unmarried relationship or as a common-law marriage. Regardless of the situation, it is important to protect yourself, especially when you choose to own property with your partner.
A cohabitation agreement typically lays out terms for division of assets and spousal support when a common-law relationship comes to an end. This is similar to a marriage contract as discussed above. It outlines each spouse’s rights and responsibilities. It is imperative to have an agreement in place when cohabitating to protect your rights. With a written agreement, it can be enforceable should your relationship end.
Should you get married to your partner, your cohabitation agreement automatically becomes a marriage contract without any further action required.
In Canada, a couple must be separated for at least one year before they can file for a divorce. However, a couple can remain separated and never file for a divorce. The main reason individuals file for divorce is to enable one spouse to remarry in the future. Separation can be misunderstood by many couples because they are under the impression that a separation is simply living in two separate addresses. However, a valid separation in Canada is to not only be living in separate addresses but also be living and leading separate lives.
A separation agreement is a legally binding agreement that a couple enters into at the time of their separation. This contract will outline each spouse’s rights on different matters such as property, child custody and access, any pending debts, child and/or spousal support and any specific agreements a couple would like to address. Legally, a separation agreement is not necessary between a couples; however, it is always better to have a written agreement because verbal agreements are frequently undermined and denied. In a court, a written agreement is enforceable should one spouse refuse to adhere to the terms of it.
How we can help
When drafting your own marriage, separation or cohabitation contract, it is strongly advised to seek legal representation. A lawyer has clear knowledge of the rights and the laws that apply to you and can offer their expertise which can benefit your particular situation. No relationship is the same, therefore, a general internet search will not provide you with the best results for drafting contract from home. Your contract can be held to be invalid or contain certain matters that cannot be enforced by the courts.
At A. Princewill Law Firm we are committed to drafting strong contracts and agreements. We take the time to sit down and get to know your situation. This enables us to serve and represent you the best we can. We have many years of experience involving divorce, marriage and separation that aid us to draft a contract that will not only be enforceable, but also one that is fair and satisfies you. Please fill out our contact form to get started.
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