Do We Need a Cohabitation Agreement?: Understanding How a Legal Contract Can Strengthen Your Life Together

210 Pages·2010·0.89 MB·English

by  Michael G. Cochrane

MICHAEL G. COCHRANE

B.A. LL.B.
Copyright © 2010 by Michael G. Cochrane
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Library and Archives Canada Cataloguing in Publication Data
Cochrane, Michael G. (Michael George), 1953-
Do we need a cohabitation agreement? : understanding how a legal contract
can strengthen your life together / Michael G. Cochrane.
Includes index.
ISBN 978-0-470-73750-7
1. Cohabitation agreements—Canada—Popular works. 2. Unmarried
couples—Legal status, laws, etc—Canada—Popular works. 3. Common-law mar-
riage—Canada—Popular works. I. Title.
KE590.C62 2010 346.7101’6 C2010-900205-9
KF538.C62 2010
Production Credits
Cover design: Adrian So
Cover photo credit: ©Getty/Photodisc/Ross Anania
Interior text design and typesetter: Natalia Burobina
Printer: Printcrafters Inc.
John Wiley & Sons Canada, Ltd.
6045 Freemont Blvd.
Mississauga, Ontario L5R 4J3
Printed in Canada
1 2 3 4 5 PC 14 13 12 11 10
CONTENTS

Acknowledgements ix
Caution About Legal Information xi
Chapter 1: Is this book for you? 1
A Real—and Revealing—Case 1
Why Canadians Live Common Law 3
I reject the idea of marriage on principle. 4
I want to give the relationship a trial run before deciding
on marriage. 4
I experienced a bad divorce in the past and just want to
avoid the possibility of that happening again. 5
I cannot get married because there is a legal impediment
to doing so. 5
If I marry, I will lose a benefit that I need. 5
Things are going fine—why would I rock the boat? 6
Terminology 6
How Many Canadians Live Common Law? 8
Chapter 2: Eyes Wide Open: Due Diligence and
Relationship Building 11
Why Due Diligence? 11
Your Partner’s Health 12
Criminal Problems 14
Financial Problems 15
Relationship Building 17
What Makes for a Mature Relationship? 18
Have Realistic Expectations 23
Have Good Problem-Solving Skills 28
Ten Elements of Good Problem Solving 28
Chapter 3: Rights and Responsibilities to Each Other
While Living Together 33
When Does Cohabitation Begin? 33
What about Having Children? 36
What about Property? 40
vi
What about Income and Expenses? 40
What about Medical/Dental Health Benefits? 41
What about Income Tax Returns? 42
What about Wills and Powers of Attorney? 42
Chapter 4: The Legal Consequences of Living Common Law:
Rights and Responsibilities if You Separate 45
When Does Cohabitation End? 46
What Happens if We Have Children and Separate? 49
What Happens if We Have Children Who Need Financial
Support? 52
What Happens to Property We Owned Before We Began Living
together? 56
What Happens to Property We Acquired While Together? 61
What if One of Us Needs Financial Support After Separation? 62
What if We Move While Living Common Law? 65
Are There Time Limits for Bringing a Claim? 65
Chapter 5: The Legal Consequences of Living Common Law 67
Rights and Responsibilities if One of You Dies, Is Injured or
Becomes Ill 67
Some Common Scenarios 67
Joint Property 68
Joint Accounts 68
Having a Will and Not Having a Will 70
Powers of Attorney for Personal Care and Property 72
Support 73
Chapter 6: Creating Your Own Set of Rights and Obligations 75
An Overview of a Cohabitation Agreement 75
Providing for Children 76
Biological Children of the Couple 77
A Specific Formula for Childcare When a Career
Change Arrives 79
Spousal Support, Releases, and Sunset Clauses 79
Providing for Your Support 80
Providing for Death, Injury, or Illness 84
What about Your Property? 87
Sunset Provisions and Termination Clauses 94
Managing Household Budgets and Other Matters 94
vii
What if We Get Married After Signing a Cohabitation
Agreement? 96
Conditional Gifts from Third Parties 97
Contracts Made Outside Ontario 97
Minors and the Mentally Incapable 98
Breakup to Makeup: Reconciliation 98
Enforcement of the Cohabitation Agreement 99
Dispute Resolution 100
Chapter 7: Having “The Conversation” 105
The “Do’s” 106
Do Have a Purpose and Make a Plan 106
Do Have an Answer to the Question, “Why Do We Need
a Cohabitation Agreement?” 107
Do Give Yourself Enough Time 107
Do Use the Conversation as an Opportunity to Discuss
the Need for Wills, Powers of Attorney, and Insurance 108
Do Keep It Simple 109
Do Be Fair and Respectful 109
The “Don’ts” 110
Don’t Present Your Partner with a Draft Contract 110
Don’t Mention Lawyers 111
Don’t Rush the Discussion 111
Don’t Present a One-Sided Option 111
Don’t Blame It on Other People 112
What if You’re Already Living Together? 113
Chapter 8: The Role of Your Lawyer 117
Why Do People Fear Hiring a Lawyer? 117
Cost 118
Control 118
Why Do You Need a Lawyer? 119
Why Do You Need a Lawyer with Family Law Experience? 120
Choosing Your Lawyer and Managing the Relationship 121
Buying Some Advice, but Not Independent Legal Advice 123
Using a Mediator 123
Chapter 9: Signed, Sealed, and Delivered 125
The Three “Must-do’s” 125
1. The agreement must be in writing. 125
viii
2. Both parties to the contract must sign it. 126
3. Signature must be witnessed. 127
Obtain Independent Legal Advice 128
Doing It Yourself 130
How to Ruin Your Cohabitation Agreement 130
Some Tips for Negotiating and Drafting Cohabitation
Agreements 141
Chapter 10: Same-Sex Couples 145
Getting Married is the Easy Part 145
Sperm Donation 146
Same-Sex Families, Adoption, and Sperm Donors 146
Transgendering 147
Chapter 11: Let’s Look at an Annotated Cohabitation
Agreement 149
Cohabitation Agreement 150
Separation Agreement with Former Spouse (if this Applies) 153
Ownership and Division of Property 153
Support 161
Release of Spouse Support 162
Certificate of Independent Legal Advice 172
Appendices 175
Appendix A: My Cohabitation Agreement Worksheet—
What I Own and What I Owe 176
Appendix B: Our Cohabitation Agreement Schedules A and B 178
Appendix C: Some Considerations and Key Document
Checklist 180
Appendix D: Table of Common-Law Rights and
Responsibilities 183
Appendix E: Consent for Disclosure of Criminal History
Information 185
Appendix F: Permission to Conduct Credit References 187
Index 189