Marriage Or Cohabitation Agreements - When They Might Be A Wise Idea

Go back even a quarter century. That's when marriage agreements (aka "prenups") were typically perceived as exotic, complex legal documents used only by the rich and famous. Nowadays, they're not. More and more prudent couples are discovering the benefits of these legally-binding family law instruments. Same goes for common-law couples, especially in Ontario where cohabiting spouses enjoy fewer legal protections than their married counterparts in key areas such as property division.

With about half of all Canadian marriages ending in divorce, our post this week looks at three possible scenarios in which a marriage or cohabitation agreement could prove to be a wise and foresighted investment.

Scenario 1: A Spouse Who Brings A Home Into The Relationship

If a husband and wife own a home, the law says that this hefty asset must be split 50/50 in divorce - regardless of who owned it before the marriage or if it was a gift or inheritance. For common law couples, no such protections exist by right. For live-in partners, the spouse who brought the home into the relationship is the one who keeps it when the couple splits.

In the first instance, a marriage agreement could expressly state that the home and any increase in valued accrued during the marriage will stay with the original owner. In the second instance, a cohabitation agreement could stipulate that spouses will split the home equally, even though the law does not automatically grant that right.

Scenario 2: Children Whose Parents Provide A Sizable Loan Or Gift

Similar to our first scenario above, one party to a relationship may wish to protect an intergenerational advance such as a down payment on a home (a topic that we wrote about here). In fact, mom and dad might even insist on having a contract that lays down the rules in case their progeny's conjugal relationship does not last.

Scenario 3: Spouses Remarrying Later In Life

Individuals who enter a new relationship during the latter part of their life often have children from a previous relationship. In this situation, a marriage agreement could be the means by which each spouse protects their assets from the typical 50/50 split, thus ensuring that their children's inheritances will not be significantly impacted.

These are just three possible situations in which a marriage or cohabitation agreement might make sense, but there are others - typically involving complex family and financial structures.

Need to protect your interests in a marriage or common-law relationship?

Give our lawyers a call. We can help.

No Comments

Leave a comment
Comment Information

shameless self promotion

  • Quinn Ross Takes Office As President Of The Ontario Bar Association

    The Ontario Bar Association (OBA) is pleased to announce Quinn Ross as the 83rd President of the OBA.

    Ross, Managing Partner of The Ross Firm, with offices in Goderich, Kincardine and Stratford, has been an active member in senior roles on the OBA board since 2012.

    Read More

  • Ross Firm Golf Tourney In Support of Huron Women’s Shelter a Swinging Success

    On behalf of the Huron Women’s Shelter and The Ross Firm P.C., we say “THANK YOU” to our many Sponsors and Donators for their outpouring of generosity and support for the annual Take a Swing Against Violence Golf Tournament held at Goderich Sunset Golf Club.

    Read More

  • Who needs a Will? You do!

    Our guests can explain why. Are you single and renting? A new Family? Or Homeowner? Enjoying your Golden Years? We all need a Will and our guest speakers will show you the why and the way.

    Read More

  • Take a Swing Against Violence

    On June 21, 2017, the Huron Women’s Shelter Second Stage Housing and Counselling Services, Board of Directors and The Ross Firm will be hosting the Taking a Swing Against Violence golf tournament at the Goderich Sunset Golf Course.

    Read More

View All

Send Us An Email. Talk To Us. We Can Help.

To schedule a consultation with one of our experienced lawyers, contact The Ross Firm online or give us a call toll free at 888-567-4917.

Contact Us

Goderich Office
144 Courthouse Square
Suite 100
Goderich, ON N7A 1M9

Toll Free: 888-567-4917
Fax: 519-524-8438
Map & Directions

Stratford Office
1 Ontario Street
2nd Floor
Stratford, ON N5A 3G7

Toll Free: 888-567-4917
Fax: 519-814-5533
Map & Directions

Kincardine Office
943 Queen Street
Kincardine, ON N2Z 2Y8

Phone: 226-396-5532
Fax: 226-396-5533
Map & Directions