Considering living together?

Here’s why you should think about a cohabitation agreement 

Deciding to move in together is an exciting milestone, but with that big step comes some important conversations about your finances and your shared future. While no one wants to think about separation when you’re in the midst of planning for a life together, having a legal agreement that protects both partners is a good idea – just in case.

What is it?

That’s where a cohabitation agreement comes in. This legal document isn’t about anticipating the failure of your relationship, it’s about protecting each other and making your relationship stronger as you build a life together.

Much like prenuptial agreements for married couples, cohabitation agreements provide a structured way for unmarried partners who live together to clarify financial responsibilities and protect their interests. Even if marriage isn’t on the horizon, a cohabitation agreement lays out each person’s rights and what happens if the relationship doesn’t work out.

Why consider a cohabitation agreement?

Many people assume that living together for a certain amount of time gives them the same legal rights as married spouses. But in most provinces, this isn’t the case.

Here’s what you should know:

• • Married couples typically have automatic legal rights regarding the division of marital property and spousal support.
• • Common-law partners, on the other hand, may not be entitled to the same benefits, even after many years of cohabitation.

A cohabitation agreement helps address this gap by creating a clear, enforceable contract that defines each partner’s rights and obligations. This type of agreement is particularly useful for protecting personal property and managing assets, debts and financial responsibilities within your relationship – and how they would be handled if you separate.  

What can a cohabitation agreement cover?

Cohabitation agreements are flexible and can be tailored to your specific situation. Common topics include:

• Rent or mortgage arrangements: Who will be listed on the lease or title? What happens to the home if the relationship ends?
• Bill and expense sharing: How will you divide utilities, groceries, and other household costs?
• Ownership of pets: Who will keep the pet acquired before or during the relationship?
• Personal property: What happens to items like cars, electronics or furniture each partner owned before moving in?
• Jointly acquired property: How will assets purchased together be divided?
• Debt responsibilities: Who is responsible for pre-existing and shared debts – like student loans or credit cards?
• Spousal support: Will one partner be entitled to financial support after a breakup?
• Major assets: How will larger assets like homes, businesses, RRSPs, pensions, and other investments be handled?
• Family contributions: How will financial assistance (e.g. for a down payment), or an inheritance be treated?
• Estate planning: If you have a blended family, how can you protect inheritance rights or estate division?

Note that a cohabitation agreement only covers financial and property-related issues. When it comes to child support or custody, that’s governed by provincial or federal law.

Why would you need one?

Not everyone needs, or will choose to have a cohabitation or prenuptial, but certain circumstances make these agreements especially important. These can include:

• ✓ Significant differences in income, assets, or debt between partners
• ✓ Inheritance or family gifts/contributions
• ✓ One or both partners have previously experienced divorce or separation
• ✓ One or both partners have children from a previous relationship

Is a cohabitation agreement legally binding?

Cohabitation agreements are legal documents in Canada, but they need to be freely entered into without coercion or undue influence, both parties should have independent legal advice, and both spouses must agree to it.  

Working with a notary or lawyer can help you draft an agreement that is legally sound.

Starting the conversation

It may feel awkward to discuss legal agreements and money early in a relationship, but it’s not just about protection, it’s about partnership. Talking about money early on is a great opportunity to have open, honest communication about financial expectations, responsibilities and long-term goals.

Even if you decide not to move forward with a formal agreement, having the conversation can bring clarity and reduce the chance of misunderstandings down the road.

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Talk to us

Planning for a future together involves more than choosing a home or organizing a wedding, it also means protecting your individual and shared interests. Whether you’re getting married or just moving in together, we can help you see the bigger financial picture and work together to create an agreement that protects your future.