Planning Ahead

Pre-nuptial/Cohabitation Agreements

Honest Open Dialogue ∙ Respecting Needs and Fairness ∙ Building Trust and Future Communication Skills

Much confusion, stress, uncertainty and cost to sort through issues occurs on a breakdown of a relationship. This can be avoided or mitigated by entering into domestic contracts which are permitted under the Family Law Act in Ontario when couples are married (marriage contracts) or living common law (cohabitation or pre-nuptial agreements). A Cohabitation agreement becomes a marriage contract if the couple subsequently marries.

More and more often couples are choosing to live common law rather than marrying. What many fail to realize is that common law couples are not automatically entitled to the same property division rights on separation as married couples. Others may believe that upon the breakdown of the relationship, common law partners are not entitled to spousal support which is not the case in Ontario.

Domestic agreements are legally binding and sets out important structures in terms of how a couple will divide expenses, property, take into account whether or not the couple will maintain separate bank accounts or create joint accounts and determines financial obligations and division of assets, how much support one spouse is required to pay the other and for how long upon the breakdown of the relationship. A cohabitation agreement can be structured to provide the parties with the same rights under family law as married couples, allowing them to secure property division claims and avoid costly legal expenses trying to prove claims.

For both married and common-law couples, a mediator can help guide them through the creation of an agreement which helps protect their assets and help couples set the ground rules for their life together and can include discussions on matters such as inheritances, pre-marriage assets, investments, retirement savings, children, business assets, retirement savings, life insurance policies, wills, etc.

Fear and worry about what happens during the relationship or if it were to end begins to erode the love and trust that brought the couple together because the couple has not raised their worries for fear it would destroy the relationship before it had a chance to flourish. The most common worries arise from issues relating to:

  • Assets being brought into the relationship and the risk of having to divide it on termination of the relationship. This is particularly concerning for second time marriages where couples have already divided their assets in the previous marriage.
  • Protecting against future inheritances being subject to division which was not the intention of the person who bequeathed the inheritance.
  • Arguing over values at date of marriage or even having documentation available to prove legitimate deductions 25 or 30 years later when the relationship ends.

PRM Mediation recognizes the sensitivity of raising these issues. The greatest error that can be made is to make it about money. It is about creating a framework for couples to have honest open dialogue between the parties in a way that respects each party’s worries, allows each to be heard and together find a solution to remove those fears and replace it with even more trust. We believe that by creating a safe environment for couples to share their worries and why they are worried, couples are less likely to think there are ulterior motives and instead demonstrate fairness to each other and to their future. This is a testament to the love for one another and more importantly leaves them with communication skills to address in a positive way future worries or conflict that will arise during their relationship.

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