Are Prenups or Cohabitation Agreements a Good Idea?

Unless they’re rich and famous, and people are telling them to protect their cash and assets, the majority of people who are married or living common-law don’t have prenuptial agreements (“prenups”), cohabitation agreements, or marriage agreements in place. But with so many marriages ending in divorce, and so many relationships ending, period, is it smart to have some kind of contract?

Hoping for the best, but…

Some people find prenups and similar contracts tacky or think that having one would mean there is no trust in the relationship, or that one or both people are planning for the relationship to fail. Some people, however, see them as “hoping for the best, but planning for the worst.”

For those practical planners who fall into the latter category, a prenuptial, cohabitation, or marriage agreement can allay concerns about possibilities no one wants to think about when marriage is on the horizon or when already living with a partner.

Even though no one wants to think about the end of a relationship, (especially in the beginning of one!), endings can happen, and can be devastating. A previously agreed-to set of outcomes can help both parties avoid nasty surprises. Relationship endings can be quite stressful without the added stress of disputes over who gets to keep the car you bought together, or with which partner your child will be spending the majority of his or her time.

The new risk in living common law

Agreements may be especially important in provinces such as British Columbia, where the law changed in early 2013, and those living common law for two years or more may not be legally married but are now held to the same standard as married people of splitting assets and debt should the partnership end. This can also mean spousal support payments after splitting up; something which may not have been as frequently awarded to (or paid by) common-law exes before the new law.

One helpful resource for Canadians is a book by lawyers David Greig and Ross Davidson: The Prenuptial Guide: Contracts for Lovers. The authors explain how every couple — straight or same-sex, married, living together, or about to be married or living together — should have a written contract in place to define and clarify relationship expectations.

The book includes instructions and examples so readers can create their own prenuptial, cohabitation, or marriage agreement, and explains how to make them legal.

Although it may be an unpleasant topic to bring up with your partner at first, planning for future possibilities by creating agreements in advance can help to avoid future disputes and unforeseen issues.

About prenup-guide-large
For more information on prenuptial agreements in Canada see The Prenuptial Guide: Contracts for Lovers by David Greig and Ross Davidson.

David Greig has also written other useful family law resources:

Separation Agreement and

The Separation Guide.

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