In recent years, it has become more and more popular for partners to remain unmarried and, instead, pursue a common-law relationship. According to data released in 2019 by Statistics Canada, more than one-fifth of all couples – 21.3 percent – were living common law in 2016. And while a common-law couple might share many of the same rights as their married counterparts, they will likely face a wholly different set of property division challenges.
With so many couples choosing to remain in a common-law relationship rather than getting married, it is not surprising that several of them will decide to purchase property or other large assets over time. It is important to understand the benefits afforded by a cohabitation agreement.
A cohabitation agreement is a document that can outline how the couple with assets if the relationship comes to an end. These documents can be revised to account for new assets, property or debt to ensure the relationship is properly reflected in the agreement. A new home, for example, or a new car that is shared by both partners should be reflected in the cohabitation agreement so proper ownership is clearly defined. Likewise, personal loans, medical debt or credit card debt that is shared should be accounted for. A couple’s financial arrangements can be complex – with one individual maintaining ownership of a car, for example, with the other individual agreeing to pay half of the monthly payment.
Couples might eschew marriage for reasons related to finances, medicine or other factors. It is important, though, to use the legal resources available to ensure you are protected from unnecessary disputes.