Chapter 1: Did You Protect Yourself with a Cohabitation Agreement or Marriage Contract?
Nobody plans to separate when they begin a relationship but divorce happens. If a separation does occur, it can be a complicated and expensive process unless you have a cohabitation agreement or marriage contract in place.
Cohabitation agreements and marriage contract are contracts that predetermine your legal rights and responsibilities if you separate. It takes the ambiguity out of a normally complicated process so the cost of separation is minimized.
A cohabitation agreement or marriage contract can be used to prevent the sharing of assets upon separation. It’s a prudent move for couples who have already amassed substantial assets and want to preserve them should their new relationship end.
It’s a strong decision, no matter what phase of your life you’re in. Bruce Sellery, a MoneySense Columnist was once asked if 50-somethings need cohabitation agreements or marriage contracts. He replied “My advice? Call a family lawyer. Seriously.”
He added, “A good family lawyer will be able to outline the issues and help write up an agreement that will protect both of you. It will be well worth the money to have peace of mind. And it will require that you and fiancé share your full financial information and talk through the big financial topics before you tie the knot. It may be an uncomfortable conversation, but well worth it.”
In fact, if you’re even living with someone in a committed relationship, it’s worth considering. We will take a deep dive into common law relationships later in the book. For now, just know that a cohabitation agreement is a good idea.