Why couples should consider a cohabitation agreement

This article looks at why common-law couples in British Columbia should draft a cohabitation agreement.

Common-law relationships are growing in popularity in British Columbia, with over 160,000 such relationships in the province in 2011, according to the Globe and Mail. While many couples who choose to live together often have no intention of getting married, they may be surprised to learn that provincial law nonetheless considers them to have many of the same rights and obligations as married couples. When a common-law relationship ends, for example, the property rights of both common-law partners largely mirror the rights enjoyed by married couples. Of course, not all common-law couples want to be treated as though they are married, which is why they should seriously consider a cohabitation agreement in order to maintain control over their property rights.

Married or cohabiting?

As the National Post points out, changes to British Columbia’s family law that came into effect in 2013 brought sweeping changes to the status of common-law couples. Any couple that has been cohabiting for at least two years is now largely treated the same as a married couple when it comes to issues such as property division. The law was changed to reflect the fact that a growing number of couples in British Columbia had been living in marriage-like relationships without enjoying any of the legal protections that marriage affords. A significant difference remains: the time limit to apply for spousal support, stepchild support and property division for the non-owning former spouse, begins to run immediately on separation.

Property division

At the same time, however, not everybody who is in a long-term relationship will be happy to discover that the law now largely considers them to be married. How property is divided following the end of a common-law relationship can be an especially contentious issue. Under the current law, each party to a relationship has an equal right to the property that was acquired by either partner during the relationship. Most assets and debts, in other words, could be split equally between both partners regardless of which partner was originally responsible for acquiring such assets or debts.

There are some exceptions to the division. Property that was owned by either partner prior to when the relationship began, for example, is considered to be excluded from this division, although any increase in value of that property accrued during the relationship can be divided. Likewise, gifts, inheritances, damage awards and legal settlements are also largely excluded, but any increase in value can be shareable.

Cohabitation agreements

Couples who would rather not risk being treated as though they were married in case their relationships do have options. A cohabitation agreement, for example, works like a prenuptial agreement but for common-law couples. Such an agreement allows couples to decide for themselves how their property is to be treated in the event that they decide to part ways. Couples looking to draft a cohabitation agreement should contact a family lawyer for guidance. An experienced lawyer can help ensure that such an agreement adheres to all legal requirements so that couples will have greater assurance that they are as prepared as they can be for the future.