Marriage Contracts vs Cohabitation Agreements Understanding the Differences

1. 2025 Marriage Contracts vs. Cohabitation Agreements: Understanding the Differences DivorceGO.ca

2. Contents Marriage Contracts vs. Cohabitation Agreements: Understanding the Differences 1 Key Differences Between a Marriage Contract and a Cohabitation Agreement .. 3 1. Legal Status................................................................................................ 3 2. Automatic Property Rights ......................................................................... 3 3. Spousal Support Entitlements ..................................................................... 4 4. When They Take Effect ............................................................................. 4 Which Agreement is Right for You? .................................................................. 5 How to Create a Legally Enforceable Agreement in Ontario.............................. 5 1. Full Financial Disclosure............................................................................ 5 2. Independent Legal Advice (ILA) ................................................................ 6 3. Written and Signed Agreement .................................................................. 6 4. Avoiding Unfair or Unconscionable Terms ................................................ 6 Can a Cohabitation Agreement Become a Marriage Contract? ........................... 7 1. What Happens When Common-Law Partners Decide to Marry? ................ 7 2. How a Cohabitation Agreement Can Be Converted Into a Marriage Contract ......................................................................................................... 8 3. Reviewing and Updating the Agreement to Reflect New Legal Rights After Marriage ........................................................................................................ 8 When to Seek Legal Assistance ......................................................................... 9 1. Why Hiring a Family Lawyer in Ontario is Essential ................................. 9 2. Situations Where Court Intervention May Be Necessary ............................ 9 3. Reviewing Existing Agreements to Reflect Changes in Financial Status ...10 Final Thoughts ..............................................................................................10 Visit DivorceGo Law Firm ...............................................................................11

3. Key Differences Between a Marriage Contract and a Cohabitation Agreement 1. Legal Status The primary difference between these agreements lies in their legal status: Marriage Contracts apply only to legally married couples. These contracts allow spouses to define their financial rights and responsibilities before or during their marriage. Cohabitation Agreements are for common-law partners—couples who live together but are not legally married. These agreements help protect each party’s assets and clarify expectations for financial support. 2. Automatic Property Rights Ontario’s Family Law Act grants married spouses certain automatic property rights, but common-law partners do not receive the same legal protections. Married Spouses: Upon divorce or separation, married couples are subject to the equalization of net family property (NFP). This means that property acquired during the marriage is divided equally unless stated otherwise in a marriage contract. Common-Law Partners: Common-law spouses do not have an automatic right to a division of property. Instead, they must prove their financial contribution to a shared asset if they wish to claim an interest in it. A cohabitation

4. agreement can help establish financial protections for both parties. 3. Spousal Support Entitlements Both agreements can includespousal support provisions, but there are different legal standards for common-law and married partners: Married Spouses: Spousal support obligations may arise automatically under Ontario’s Divorce Act and Family Law Act. A marriage contract can specify spousal support terms, including waiving or limiting it. Common-Law Partners: A cohabitation agreement can outline spousal support terms, but a common-law partner must first prove eligibility for support. In Ontario, this typically requires proving: oThe couple has lived together for at least three years, or oThey have achild together and maintained a relationship of some permanence. 4. When They Take Effect A marriage contract becomes legally binding upon marriage. If a couple signs one after they are already married, it takes effect immediately. A cohabitation agreement applies as soon as the couple starts living together. If common-law partners later marry, the cohabitation agreement automatically becomes a marriage contract unless they update or revoke it.

5. Which Agreement is Right for You? If you are legally married or planning to marry, a marriage contract can clarify financial obligations and protect pre-marital assets. If you are in a common-law relationship, a cohabitation agreement ensures financial security and avoids future disputes. Both agreements must be voluntarily signed, in writing, and witnessed to be legally enforceable in Ontario. Each party should obtain independent legal advice to ensure fairness and validity. How to Create a Legally Enforceable Agreement in Ontario 1. Full Financial Disclosure Both partners must provide a complete and honest disclosure of their assets, debts, and liabilities before signing an agreement. Full financial disclosure ensures that both parties make informed decisions. Hiding assets or misrepresenting financial status can lead to a court invalidating the agreement. It is advisable to provide financial statements outlining income, property, savings, and liabilities.

6. 2. Independent Legal Advice (ILA) Each partner should obtainindependent legal advice (ILA) from separate lawyers before signing the agreement. This ensures that both individuals understand their rights and obligations under the contract. ILA helps prevent claims of coercion, undue influence, or misunderstanding. Courts are more likely to uphold agreements when both parties had legal representation. 3. Written and Signed Agreement Verbal agreements are not legally binding under Ontario’s Family Law Act. For a marriage contract or cohabitation agreement to be enforceable, it must: Be in writing and clearly outline all terms. Be signed by both parties. Be witnessed by at least one person who is not a party to the agreement. Failure to meet these formalities can render the contract unenforceable in court. 4. Avoiding Unfair or Unconscionable Terms A court may refuse to enforce an agreement if it contains unfair, unconscionable, or unreasonable terms.

7. Agreements that heavily favour one party, leave the other in financial hardship, or contradict public policy may be invalidated. If a spouse was pressured into signing or did not understand the terms, the contract may not stand in court. Spousal support waivers are often scrutinized—if they result in significant unfairness, a judge may override them. Can a Cohabitation Agreement Become a Marriage Contract? Many couples in Ontario start their relationship as common-law partners and later decide to get married. In such cases, they may wonder whether their existing cohabitation agreement remains valid or if they need to create a new marriage contract. Below, we explore what happens when common-law partners marry and how their legal agreement may be affected. 1. What Happens When Common-Law Partners Decide to Marry? In Ontario, once common-law partners legally marry, their legal rights and obligations change under the Family Law Act. While common-law partners do not have automatic property rights, married spouses are subject to equalization of net family property upon separation or divorce. Spousal support eligibility may also change, as married spouses often have stronger claims under Ontario law.

8. 2. How a Cohabitation Agreement Can Be Converted Into a Marriage Contract Under Ontario law, if a couple marries after signing a cohabitation agreement, the agreement automatically becomes a marriage contract, unless it states otherwise. The existing terms regarding property division, spousal support, and other financial arrangements will continue to apply, as long as they comply with family law requirements. If the agreement includes a clause stating that it will no longer be valid upon marriage, the couple must draft a new marriage contract. 3. Reviewing and Updating the Agreement to Reflect New Legal Rights After Marriage While a cohabitation agreement may still be enforceable after marriage, it is important to review and update it to reflect the couple’s new legal status. A family lawyer can help assess whether changes are needed to align with marital property laws, inheritance rights, and spousal support entitlements. Some couples choose to renegotiate certain terms to ensure fairness and avoid potential disputes if they separate in the future.

9. When to Seek Legal Assistance 1. Why Hiring a Family Lawyer in Ontario is Essential A family lawyer plays a critical role in ensuring that a marriage contract or cohabitation agreement is valid, enforceable, and legally sound. Avoiding Future Disputes: A poorly drafted agreement can lead to conflicts later, particularly regarding property division and spousal support. Compliance with Ontario Family Law: A lawyer ensures that the agreement followsOntario’s Family Law Act and does not contain clauses that could be overturned in court. Independent Legal Advice (ILA): Each party should have their own lawyer to avoid claims of coercion, misunderstanding, or unfairness. 2. Situations Where Court Intervention May Be Necessary While a well-drafted agreement can help couples avoid legal disputes, there are situations where court intervention may be required: Challenging Unfair Terms: If one partner believes the agreement is unfair, they can challenge it in court. Judges may set aside agreements that are unconscionable or leave one party in severe financial hardship. Lack of Financial Disclosure: If one party failed to disclose assets or debts when signing the agreement, the court may deem the contract invalid.

10. Claims of Duress or Coercion: If a spouse was pressured into signing the agreement without proper legal advice, the court may void the contract. 3. Reviewing Existing Agreements to Reflect Changes in Financial Status Over time, a couple’s financial situation may change due to career advancements, business ownership, inheritance, or significant debt accumulation. In such cases, it is important to: Review and Update the Agreement: A lawyer can help amend the contract to reflect changes in income, assets, or new financial goals. Ensure Ongoing Fairness: Courts may question an agreement that no longer fairly represents the couple’s financial reality. Final Thoughts Whether you are creating a new agreement, reviewing an existing one, or challenging unfair terms, consulting an Ontario family lawyer is the best way to protect your rights and ensure legal compliance. A properly drafted and legally sound contract provides peace of mind and clarity for both partners.

11. Visit DivorceGo Law Firm Visit DivorceGO for experienced team of family lawyers, ready to assist you. For personalized assistance in Toronto, visit us at 45 Sheppard Ave E, Suite #500, or call us at (416) 792-5400. In Mississauga, you can find us at 2 Robert Speck Pkwy, Suite #750, or reach out by phone at (905) 949-1717.