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Cohabitation Agreement and Marriage Contracts

Cohabitation Agreements and Marriage Contracts in Ontario

Cohabitation agreements are entered into by couples who are living together or are about to start living together. Marriage contracts are entered into by couples who are about to get married or are already married. Under Ontario law, they are both types of “domestic contracts” and, when properly done, are enforceable in our courts. For couples that are coming into a relationship with property, entitlements, obligations and/or children from a previous relationship, they are a “must do”.

  • A cohabitation agreement is used by couples who are living together or planning to live together but are not legally married.
  • A marriage contract is used by couples who are married or planning to marry.

Both agreements can address:

  • Ownership and division of property
  • Spousal support obligations
  • Certain rights to the matrimonial home
  • To a limited extent, the right to direct the education and moral training of children
  • Debt responsibilities
  • Estate planning considerations

When Are These Agreements Appropriate (and When Are They Not)?

What is Mediation?

Cohabitation agreements and marriage contracts are appropriate in many situations, including:

Blended families: When one or both partners have children from previous relationships and want to protect inheritances or property.

  • Blended families: When one or both partners have children from previous relationships and want to protect inheritances or property.
  • Unequal financial positions: When one partner owns significant assets or earns substantially more than the other.
  • Business ownership: When one partner owns a business and wants to protect it from claims in the event of separation.
  • Second (or beyond) marriages or late-in-life relationships: When partners want to preserve assets for themselves, their children or grandchildren.
  • Home ownership: When one partner owns a home and wants to clarify rights and obligations.

These agreements are also useful for couples who simply want clarity and peace of mind about their financial future. Ironically, it is usually easier for a couple to agree on how they will separate when they are fresh into their relationship and getting along, than when their relationship is over and their communications have soured.

However, cohabitation agreements and marriage contracts may not be appropriate when:

  • One party is under pressure or duress from the other to sign.
  • There has been inadequate financial disclosure.
  • The agreement is grossly unfair or unconscionable.
  • The parties do not have independent legal advice.

In such cases, the agreement may be challenged and even set aside by the court. It is therefore essential that both parties understand the terms and enter into the agreement voluntarily.

When considering such an agreement, it is also important to think about how the parties’ lives may change in the future. For example: could their careers and earning potential be affected by starting a family? What if health issues arise? Thinking ahead and planning for such circumstances can create more flexible and durable agreements that provide for such change and are more likely to stand the test of time.

What Professionals Are Involved?

Creating a valid and enforceable cohabitation agreement or marriage contract typically involves:

Family Lawyers
Each party should retain their own lawyer to:

  • Explain their legal rights and obligations
  • Review financial disclosure
  • Negotiate and draft the agreement
  • Provide a Certificate of Independent Legal Advice

This ensures that the agreement is fair, informed, and less likely to be challenged later.

Financial Advisors or Accountants

In more complex cases, financial professionals may help:

  • Value assets and liabilities
  • Model future financial scenarios
  • Advise on tax implications
  • Assist with estate planning

This is especially important when the agreement involves business interests, trusts, or significant investments.

Estate Planning Professionals

Marriage contracts often intersect with wills and estate plans. Lawyers or advisors may coordinate the agreement with:

  • Wills and powers of attorney
  • Trust structures
  • Beneficiary designations

This ensures that the agreement aligns with the couple’s long-term goals and avoids conflicts between family law and estate law.

How It Works

Arbitration follows a structured process designed to resolve disputes efficiently and fairly.

Initial Consultation

The parties exchange full and honest disclosure of their financial situation, including:

Financial Disclosure

The parties exchange full and honest disclosure of their financial situation, including:

  • Income
  • Assets (e.g., real estate, investments, pensions)
  • Debts and liabilities
  • Business interests
This disclosure is critical. To make agreements about finances and property, both parties must understand each other’s holdings, income and debt. Without such disclosure, the agreement may be vulnerable to challenge.

Drafting the Agreement

The lawyers draft the agreement based on the parties’ instructions. Common clauses include:

  • Ownership of property brought into the relationship
  • Treatment of jointly acquired assets
  • Spousal support waivers or entitlements
  • Rights to the matrimonial home
  • Debt allocation
The agreement may also include review clauses, dispute resolution mechanisms, and provisions for future changes.

Independent Legal Advice

Each party reviews the draft with their own lawyer. The lawyer explains the terms, confirms understanding, and signs a Certificate of Independent Legal Advice.

This step is important to enforceability. Courts are more likely to uphold agreements when both parties had legal advice.

Signing and Storage

The agreement is signed and witnessed. Each party keeps a copy, and the lawyers may retain originals or a scanned copy of an original. The agreement can be referenced or filed with the court if needed in the future.

What Happens If We Separate Without an Agreement?

Without a cohabitation agreement or marriage contract, Ontario’s default family law rules apply:

  • Married couples may be subject to equalization of net family property, which can result in sharing assets acquired or that grew in value during the marriage.
  • Unmarried couples do not have automatic property rights, but may make claims against the other parties’ property based on contributions to it or to the family’s life more generally (these arguments typically involve legal concepts such as constructive and resulting trust, unjust enrichment and “joint family venture”).
  • Spousal support may be claimed based on compensation or need based principles.
  • The matrimonial home has special protections for married couples, including equal rights to “possess” or live in it, regardless of which spouse holds legal title.

An agreement allows couples to modify, or in some cases opt out of, these default rules and create their own framework.

Can These Agreements Be Changed or Cancelled?

Yes. Cohabitation agreements and marriage contracts can be:

  • Amended by mutual consent
  • Replaced with a new agreement
  • Terminated if both parties agree
  • Changed or set aside by the court in certain limited circumstances

When a change is made to a marriage contract or cohabitation agreement, the change must be made in writing and signed with the same formalities as the original agreement. It’s wise to seek legal advice before making changes.

Common Questions About Cohabitation Agreements and Marriage Contracts

Are these agreements legally binding?

Yes, if properly drafted, signed, and supported by financial disclosure and independent legal advice.

Yes. Marriage contracts can be signed before or after marriage. Cohabitation agreements can be signed at any time during the relationship.

To a very limited extent, you can address the right to direct a child’s education and moral training. But such agreements are not binding on the court in the event of a future dispute and in such cases are determined based on the child’s best interests at the time of separation.

Yes, but the waiver must be fair and informed. Courts may override waivers in cases of hardship or unfairness.

While not strictly required, independent legal advice is important and increases the chances that the agreement will be found fair and enforceable if challenged later.

Yes, but only in limited circumstances—such as lack of disclosure, duress, or unconscionability. The more work that goes into financial disclosure and fair negotiation of an agreement when it is created, the better the chance that it will be upheld in the event of a court challenge.

Yes. Agreements can be amended or replaced by mutual consent.

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