Understanding your Cohabitation Agreement (for ILA purposes)
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A cohabitation agreement is the means to personalize the arrangement between two adult interdependent partners, where those individuals do not want to be constrained to the default legal structure of Alberta's Adult Interdependent Relationships Act. Although many individuals in an adult interdependent relationship may be fine in deferring to a uniform arrangement as prescribed by government legislation, where the prescribed arrangement is not acceptable, a legally enforceable cohabitation agreement must be entered into. And this applies to anyone who has either lived with a partner for three years, had a child together while living in a relationship of some permanence, or sign an Adult Interdependent Partner Agreement. Once this threshold is met, Alberta law treats you and your partner almost identically to a married couple regarding property division and support. With a legally-enforceable cohabitation agreement, you can customize your arrangements and opt out of default legislative provision that would otherwise dictate the outcome of matters including property division and support payments.
The Scope of Property and Exempt Assets
A primary pillar of your cohabitation agreement is the definition of exempt property versus divisible family property. Under the Family Property Act (Alberta), assets you brought into the relationship are generally exempt from division, but any increase in their value during the time you lived together is subject to an equal split unless your cohabitation agreement states otherwise. For instance, if you owned a home worth $500,000 at the start of the relationship and it is worth $800,000 upon separation, the $300,000 gain is legally subject for division. A well-drafted cohabitation agreement provides insight into how you have chosen to handle these gains: you may have agreed that the entire value of specific pre-existing assets remains yours alone, or that only assets held in joint names will ever be shared. This clarity prevents the commingling of assets from unintentionally turning your separate property into joint family property.
Managing Debt and Financial Obligations
Beyond assets, your cohabitation agreement must explicitly address the management and division of liabilities and debts. In the absence of a cohabitation agreement, Alberta courts typically view debts incurred during the relationship for family purposes (i.e., a joint line of credit or a mortgage) as the responsibility of both partners. Your cohabitation agreement likely specifies how individual debts (like student loans or credit card balances) are handled versus joint obligations. It is important to understanding how adult interdependent partners form an economic unit; with the cohabitation agreement further defining the boundaries as to where your individual financial life ends and your shared financial life begins. This section typically seeks to ensure that one partner is not unfairly burdened with the other’s separate financial choices if the relationship ends.
Adult Interdependent Partner Support and Waiver Terms
The issue of adult interdependent partner support is another vital component of one's cohabitation agreements. Under the Family Law Act (Alberta), a partner may be entitled to support if there is a significant income disparity or if one partner sacrificed career growth to support the household. Cohabitation agreements tend to contain specific terms that either waive the right to support entirely, set a formula for how it would be calculated, or establish a sunset clause where support only becomes available after a certain number of years. Understanding these terms is crucial, as it shows you have weighed the potential for future undue hardship against the desire for financial independence. Courts in Alberta are generally hesitant to overturn support waivers unless they are found to be unconscionable at the time of enforcement.
Strict Enforceability Requirements
For a cohabitation agreement to be legally binding in Alberta, it must meet rigorous procedural standards under Section 38 of the Family Property Act (Alberta). The law requires that the agreement be in writing and signed voluntarily by both parties before separate witnesses. Most importantly, each partner must obtain Independent Legal Advice (ILA) from a different lawyer. This process ensures that neither party was under duress and that both fully understood the nature and effect of the cohabitation agreement; specifically, which statutory rights they were choosing to surrender. If you cannot produce a Certificate of Independent Legal Advice for both signatures, the cohabitation agreement is highly vulnerable to being set aside by a judge, leaving you subject to the default rules set out in the provincial legislation.
Future-Proofing and Re-Execution
Finally, insight into an Alberta cohabitation agreement requires understanding its longevity and evergreen nature. Because the laws governing married couples and adult interdependent partners shifted significantly in 2020, older agreements must be reviewed to ensure they still comply with current legislation. Furthermore, if you and your partner eventually decide to marry, your cohabitation agreement may need a contemplation of marriage clause to remain valid as a prenuptial agreement. Some cohabitation agreements also include a re-execution clause, requiring the parties to sign the document again once they officially become adult interdependent partners (after the three-year mark). This proactive step reinforces the mutual intent of the parties and ensures that the cohabitation agreement remains a durable legal shield throughout the evolution of the relationship.
To schedule an appointment for independent legal counsel with respect to a cohabitation agreement, please contact our law firm to attain our current availability for in-person evening / weekend sessions and remote video sessions to complete an Independent Legal Advice (ILA) Certificate, by emailing our law firm in strict confidence at Chris@NeufeldLegal.com with your contact information (including home address), preferred times and, if possible, PDFs of the documents to be completed, such that we might coordinate the actual meeting time and confirm our costs.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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