February 17, 2016 MasterEditor

Marriage or Cohabitation Agreements

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The concept of marriage or cohabitation agreements has been around for many years.  They are often referred to as prenuptial agreements, which is actually a fairly archaic term.  The Family Law Act of British Columbia has now created a genuine sense of equality between married and common law couples in that couples have similar rights and obligations whether or not they are legally married. 

A couple that enter into a marriage-like relationship, including couples of the same gender, that cohabit for at least two years are generally treated by the courts in the same manner as a married couple when it comes to issues such as spousal support and property division.  Therefore, some couples, particularly those of a mature age and have been in previous relationships, may want to seriously consider entering into a marriage or cohabitation agreement with their partner.  The manner in which property is divided at the end of a relationship, be it a legal marriage or common law, can be very contentious. 

The Family Law Act states that at the end of a relationship each spouse has a prima facie right to a share in the property and assets that were acquired by either spouse during the relationship.  As a result most assets and debts may be divided equally between the spouses regardless of which spouse acquired the asset or incurred the debt, even if one spouse did not financially contribute to the acquisition.

Fortunately there are some exceptions to the concept of an equal division of the assets. Assets or property that was owned by a spouse prior to the relationship is not subject to division upon separation.  However, any increase in the value of that property during the relationship can be subject to a division.  Also, any gifts, inheritances or personal injury awards that one spouse receives during the relationship is not subject to division, with the exception that any increase in the value may be divided.

So when a couple decides to reside together in a marriage-like relationship they have the option of entering into a marriage or cohabitation agreement.  A properly drafted agreement allows couples to determine how their property will be treated in the event that they should separate or divorce.  Likewise, a couple can also set out provisions in an agreement as to how the issue of spousal support will be treated upon separation or divorce. 

Generally there is not a significant cost to obtain a marriage or cohabitation agreement through a lawyer.  That being said, not every couple may need such an agreement but it may be wise to seek advice from a lawyer as to whether or not an agreement is appropriate and to discuss the provisions that would be set out in an agreement if one is prepared.

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