Should you get a prenup or cohabitation agreement before settling down?

According to an Ipsos poll commissioned by Global News, 92 per cent of married Canadians don't have a prenuptial agreement. Getty Images

Marrying couples will put a lot of time and effort into planning even the smallest of weddings – but what about preparing for what may come after the “I dos?”

With so much at stake down the road – like children and money, for example – some couples might want to think about drafting up some sort of legal protection in the form of either a prenuptial agreement or cohabitation agreement.


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But when it comes to such legal contracts, couples don’t often know the difference or are left wondering if they should even bother getting one. And with so many questions for such a daunting task, confusion and discouragement sets in, leaving many couples to wonder if they’re doing the right thing.

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So to help couples navigate those choppy legal waters, Global News spoke with John-Paul Boyd, executive director of the Canadian Research Institute for Law and the Family with the University of Calgary to talk prenuptial and cohabitation agreements – what every couple needs to know before signing on the dotted line and if they’re even worth signing.

Prenuptial agreements

What is a prenuptial agreement?: “The point of a prenuptial agreement is to stipulate in advance what happens in the unlikely and tragic event that the marriage collapses,” Boyd explains.  “The idea is that rather than leaving it until the date of separation to figure out what’s happening, you try to do some anticipating ahead of time.”

Who are prenuptial agreements for: Prenuptial agreements are reserved for legally married couples, not common law or other partnering arrangements, Boyd explains.

“People who get prenups are those entering relationships with significant disparities, assets or debts,” Boyd says. “Most commonly, it’s the parents who want their children – mostly their children’s spouses – to sign a prenuptial agreement for swearing an interest in the family business or family fortune. The next most often are spouses who have been divorced once before. You tend to be a little more practical going into your next marriage.”

Boyd also says people who have huge disparities of debt also tend to enter into these agreements.

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How popular are prenuptial agreements?: Having a prenuptial agreement in Canada is not at all a popular thing, Boyd says.

To put this into perspective, a recent Ipsos poll commissioned by Global News found that only eight per cent of Canadian couples actually have a prenuptial agreement in place.

How to get one: Prenuptial agreements can be done through a lawyer who specializes in family law and/or has experience in drawing up prenuptial agreements. They can also be drawn up using websites that offer prenuptial agreement templates. As well, books and kits which help you make your own agreements are available. It doesn’t matter which avenue you decide to go to get one, all three options are considered legally binding.

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However, Boyd says it’s best to go through a lawyer as to avoid any mistakes that could cost you in the future.

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“I would be careful about playing with things like that because a badly drawn-up contract can still be binding even if you have doubts about the content or don’t think it’s accurate,” Boyd warns.

Also be mindful that prenuptial agreements may be different depending on the jurisdiction. So what may work in Alberta, for example, may not apply to Quebec, Boyd adds.

Upsides: “In large, prenuptial agreements are intended to help sort out ahead of time what’s going to happen if things go south in a relationship,” Boyd says. “Sometimes they talk about how the couple are going to run the marriage itself… but that hardly ever happens. So the point most of the time is to figure out whether or not spousal support is going to be payable – and if so for how much and how long – and which properties to keep and things like that. So you’re entering into this agreement now so as to avoid spending tens of thousands of dollars on lawyers later.”

Downsides: Prenuptial agreements also come with a few downsides, Boyd says.

One of them, is anticipating where you will be as a couple, as well as individuals, in the near or far future. This can make it difficult to determine what you’d like to include in the agreement.

“The problem with marriage agreements though is that it’s often very difficult for a couple – especially a young couple just starting out – to anticipate where they are going to be at that unknown point in the future when or if their relationship collapses.”

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Another problem, Boyd points out, is that it may be pointless for a couple to get an agreement, which means they spent money they didn’t need to spend in the first place.

This could mean that the provisions set out in the initial agreement no longer apply to couple’s circumstances in the future (should the marriage dissolve), or the marriage stays intact.

In fact, of the eight per cent of Canadians who did obtain a prenuptial agreement, 12 per cent felt they had overspent on the process.

Cohabitation agreements

What is a cohabitation agreement?: “What it comes down to is if you’re in an unmarried relationship, you may want to get a cohabitation agreement for exactly the same reasons you would as a married couple would – except whether you need it in respect to spousal support depends on where you live and how you’re relationship is going to be,” Boyd explains. “And if you need it about property, it depends on what plans you have for the future, whether any property will be co-owned and whether the province or territory in which you live has any rule that gives you an automatic entitlement.”

Who are cohabitation agreements for: “Where I see cohabitation agreements most often is when it involves property issues with mom and dad because there’s no presumptive entitlement in most jurisdictions,” Boyd says. “Where you see it is where couples are entering into a relationship with a significant disparity in the assets or debts they have.”

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Boyd says he also tends to see couples who aren’t entering “traditional” relationships use such agreements, like polyamorous families, where living circumstances are decidedly complex and could create potential liabilities.

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How popular are cohabitation agreements?: If prenuptial agreements aren’t popular, cohabitation agreements are even less so, Boyd says.

How to get one: Like prenuptial agreements, cohabitation agreements can be drawn up by a lawyer. Websites, books and do-it-yourself kits are also available.

Upsides: Much like prenuptial agreements, having a cohabitation agreement can protect individuals in the event the relationship ends, Boyd says.

“If you’re getting ready to marry someone with a really bad history of managing credit and you want your partner to know you won’t be responsible for credit card debts then you might want one,” Boyd says.

These types of agreements can also set out who pays which bill and when and/or how, making the process of buying and selling any assets a smoother experience.

It’s a way of protecting your name and your assets, Boyd says.

Downsides: “It’s the same kind of cons as prenuptial agreements,” Boyd says. “So the agreement may not be worth what you spent on it because it doesn’t relate to how your circumstances are when you separate.”


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