Moving in with your partner is an exciting and romantic milestone in any relationship. However, once you start living together for an extended period of time, you are now recognized as common law partners, and this status comes with legal implications.
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According to Stats Canada, amongst the G7 countries, Canada has the highest share of common law couples at 23%. This is heavily influenced by Quebec, with 43% of Canada's common law couples. But despite the increase in popularity, many couples are not aware of their rights as common law partners, and the importance of having a cohabitation agreement.
A cohabitation agreement is a legal contract that outlines both you and your partner's assets and liabilities, and what happens to them if the relationship ends. It is similar to a prenuptial agreement, but the difference is that the couple is not getting married. The agreement is especially crucial because finances tend to get co-mingled in a romantic relationship, unlike a platonic roommate or friend.
Common law relationships have some of the same rights as couples in a marriage contract. However, there are nuances, and neither party is as protected. For example, once you start living together, you're recognized as common law partners, and the time ranges between 2-3 consecutive years, depending on which province you live in. In Ontario & Alberta, it's 3 consecutive years, and in BC, it's 2 consecutive years. If you have a baby together by birth or adoption, this also impacts the timeline. You're considered common law after living together for 1 year.
The reality is, many couples who have lived together for a long time and have children together end up not being able to divide assets fairly. For instance, a person could live with their partner for ten years, contribute to the mortgage, but not be eligible to receive a 50/50 division of the property when they split. This situation can be prevented with a cohabitation agreement.
In conclusion, cohabitation agreements are an essential tool for any couple planning to move in together. With a cohabitation agreement, both parties can protect themselves and their assets in case the relationship ends. It's a legal document that ensures transparency and fairness in the relationship. Although it may not be a popular topic of conversation, it's an essential one that should be discussed and considered by every couple.
