When couples start building a life together, they don’t always know what legal steps they should take to protect themselves. Two common tools are cohabitation agreements and prenuptial agreements (prenups). While these agreements cover similar territory, cohabitation agreements can have a more significant impact on the couple, depending on the law in your province. This guide breaks down everything you need to know about a cohabitation agreement vs prenup in Canada, so you can decide which one is right for your relationship.
Key Differences Between a Cohabitation Agreement and a Prenup in Canada
The main difference between a cohabitation agreement and a prenuptial agreement lies in timing and marital status:
- A cohabitation agreement is for couples who are living together or planning to live together but are not married.
- A prenuptial agreement is made before marriage and takes effect once the couple is legally married. Often, lawyers will say that prenups are made “in anticipation of marriage” – which simply means that you are engaged or planning to be in the near term.
Both agreements can address property division, debt, spousal support, and more. The purpose of both types of the agreements is to make your own decision about how your property should be divided if your relationship ends, instead of relying on the rules put in place by the government through family legislation.
In general, Canadian law gives married couples automatic rights to share equally in family property in the event the relationship ends – meaning that everything that you built together as a couple during the course of the relationship will be divided between you. However, depending on where you live, that might not be the case if you’re not married. In much of Canada, couples who are not married (often referred to as common law), do not have property division rights similar to the rights of married couples. That means that making a cohabitation agreement is the only way to opt-in to sharing the assets you build together as a couple.
What Do Cohabitation Agreements and Prenups Have in Common?
Despite their differences, these agreements share several core characteristics:
- They clarify financial expectations.
- They outline what happens in case of separation or death.
- They can protect property owned before the relationship.
- They are customizable and must be in writing to be legally valid.
- Both can help avoid conflict or costly legal disputes later on.
What Is a Cohabitation Agreement in Canada?
A cohabitation agreement is a legal document created by two people who are living together (or planning to) in a romantic relationship, without being legally married. It defines each person’s rights and responsibilities during the relationship and outlines how property, debts, and spousal support will be handled if they separate.
Couples might use a cohabitation agreement to:
- Keep finances separate
- Protect pre-owned property
- Clarify responsibilities like rent, bills, or childcare
- Set rules for buying shared property
What Is a Prenup Agreement in Canada?
A prenuptial agreement (or marriage contract) is signed before marriage and outlines how a couple will handle finances, property, and support during the marriage and if it ends.
Prenups are most often used to:
- Protect inheritances or family-owned businesses
- Clarify rights to assets brought into the marriage
- Set expectations around spousal support
- Avoid default rules in provincial family law
What Can a Cohabitation Agreement or Prenup Include in Canada?
Whether you’re drafting a prenup or a cohabitation agreement, you can include a wide range of terms, such as:
- Division of property and assets
- Spousal support (amount, duration, or waiver)
- Ownership of jointly acquired property
- Debt responsibilities
- Handling of specific assets (e.g., pets, vehicles, real estate)
You cannot use either agreement to limit parenting rights or responsibilities (such as child support or custody). Courts and legislators in Canada have decided that these issues must be decided based on the child’s best interests at the time of separation.
When to Use a Cohabitation Agreement
You should consider a cohabitation agreement if:
- You’re living with a partner but not planning to marry soon (or at all).
- You want to clarify property rights and responsibilities while living together.
- You or your partner owns significant assets, runs a business, or has children from a previous relationship.
- You want to avoid the uncertainty of common-law property claims.
When to Use a Prenup
A prenup is the better option if:
- You’re engaged or planning to get married.
- You want to establish clear financial terms before entering into a legal marriage.
- You need to protect pre-marriage assets, family wealth, or a business.
- You’re concerned about spousal support obligations in the event of a separation.
Are Cohabitation Agreements or Prenups Legally Binding in Canada?
Yes, both types of agreements are legally binding if they are made correctly. Cohabitation agreements and prenups must meet the following requirements:
- The agreement is in writing and signed by both parties.
- Each person discloses their financial information fully and honestly.
- The agreement is signed voluntarily (without coercion).
- Ideally, each person receives independent legal advice. This is mandatory in some provinces and optional in others, but always a good idea if you can afford it.
Courts may set aside or modify an agreement if it’s found to be unfair, signed under duress, or lacking full financial disclosure.
Can a Cohabitation Agreement Be Turned Into a Prenup?
Yes. If you have a cohabitation agreement and later decide to marry, the agreement can continue to be valid unless it states otherwise. In some provinces, a cohabitation agreement automatically becomes a marriage contract upon marriage.
However, some couples prefer to update or replace their cohabitation agreement with a new prenup that better reflects their plans as a married couple. Both prenups and cohabitation agreements should be seen as living documents, meaning that you should review and update them throughout the course of your relationship as your circumstances change.
How to Create a Cohabitation Agreement or Prenup in Canada
Creating either agreement involves a few key steps:
- Start early: Have the conversation well before moving in or getting married.
- Discuss openly: Talk about your financial situation, goals, and expectations.
- Use a reliable tool: Jointly offers a user-friendly online platform to help couples create customized cohabitation agreements or prenups.
- Get legal advice: While not required in all provinces, legal advice ensures your agreement is valid and enforceable. Sign up for our free Agreement Starter Kit to find out if legal advice is required in your province.
- Sign and store securely: Once complete, both parties should sign and keep a copy.
Do You Need a Lawyer for a Cohabitation Agreement or Prenup in Canada?
Technically, you don’t need a lawyer to create a prenup or cohabitation agreement. But independent legal advice is strongly recommended because:
- It protects against claims of unfairness or duress.
- It ensures each party understands their rights.
- It increases the likelihood that the agreement will be upheld in court.
At Jointly, we help you build a legally strong agreement that you can take to a lawyer in your area for independent legal advice if you choose.
Conclusion: Which Is Right for You?
The right agreement depends on where you are in your relationship:
- If you’re living together without plans to marry soon, consider a cohabitation agreement.
- If you’re getting married, a prenup is the best choice.
- If you’re already cohabiting and planning a wedding, start with a cohabitation agreement and update it as a prenup before the big day.
No matter your path, taking the time to create a clear, customized agreement is one of the most empowering and respectful steps you can take in a relationship. Get started today.
FAQs
What if we sign a cohabitation agreement and later marry?
In many provinces, your cohabitation agreement will automatically convert to a marriage contract unless otherwise stated. Still, it’s a good idea to review and update the agreement before your wedding to ensure it reflects your current intentions.
Should you have both a cohabitation agreement and a prenup?
You only need one agreement at a time. If you have a cohabitation agreement and then get married, you may want to revise or replace it with a prenup or postnup that reflects any changes to your relationship, finances, or goals.
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