- Married and common-law couples start from very different default rules on property, which is often why people consider an agreement.
- Property can be excluded from sharing by agreement, but the family home has a strong default rule that deserves careful advice.
- The formal requirements for a valid agreement should be confirmed with a lawyer before you sign anything.
Couples planning to marry or move in together often ask whether they can set their own rules for what happens if the relationship ends. A written agreement is how many people try to do that.
This article explains the default rules an agreement may change, what an agreement can touch, and how to approach making one. It does not set out every requirement for validity, so a lawyer should confirm those before you sign.
What these agreements are
A marriage contract is made by a couple who are marrying or already married. A cohabitation agreement is made by a couple living together without marrying, or planning to. Both are written agreements about how you will handle money and property, and sometimes other matters, if you separate.
The default rules an agreement may change
To decide whether you want an agreement, it helps to know what happens without one. The rules differ sharply for married and common-law couples.
| Couple | Default rule on property |
|---|---|
| Married | Each spouse values property owned on the separation date, less debts and excluded property, then subtracts net property owned on the marriage date. The spouse with the larger net family property pays half the difference. |
| Common-law | Not legally required to split property acquired while living together, though they may recover contributions to the other's property, sometimes through court. |
What an agreement can cover
Some property is already outside the sharing rules, including gifts or inheritances (other than the family home), life insurance proceeds received because someone died, personal injury money, and property excluded by agreement. That last item shows that an agreement can be used to keep certain property out of the sharing.
The family home is different. Its full value must be shared even if it was owned before marriage, gifted or inherited, and a court can divide differently only in very special situations where an equal split would be extremely unfair. How an agreement deals with the home is therefore a point to discuss carefully with a lawyer.
Whether an agreement can control matters involving children, such as parenting and child support, depends on the facts and the law. Courts keep a role in those questions, so do not assume that anything you write will be followed. A lawyer can explain the limits.
Making the agreement valid
There are formal requirements for a domestic contract to be valid and enforceable. They are best confirmed with a lawyer for your situation, because a mistake in how an agreement is signed or prepared can cause problems later.
- Each person should get their own legal advice.
- Share complete and honest information about your finances and debts.
- Do not sign under pressure or close to the wedding date if you can avoid it.
- Put everything in writing and keep a signed copy each.
What to do next
- List what each of you owns and owes today.
- Decide what you want to protect and what you want to share.
- Talk to a lawyer before you draft or sign anything.
- Consider mediation or collaborative law if you find it hard to agree on terms.
Family mediation is voluntary, and the mediator is a neutral third party who does not take sides, make decisions or give legal advice. In collaborative family law, both parties and their lawyers agree not to go to court.
Frequently asked questions
Do common-law couples have to split property in Ontario?
Common-law couples are not legally required to split property acquired while living together. They may recover contributions to the other's property, sometimes through court. A cohabitation agreement can set out your own approach.
Can an agreement keep property out of equalization?
Property excluded by agreement is not shared. The family home is treated differently, and its full value must be shared even if owned before marriage. Get advice on how your agreement should deal with it.
What makes a domestic contract valid?
There are formal requirements, and they should be confirmed with a lawyer for your situation. Each person getting their own advice and disclosing finances honestly are sensible steps.
Do we need to use a lawyer to negotiate?
You can try mediation, which is voluntary and uses a neutral mediator who does not give legal advice. Because the mediator does not give legal advice, you may still want your own lawyer to review any agreement.
Sources
- Ontario.ca – Family mediation — ontario.ca
- Ontario.ca – Dividing property when a marriage or common law relationship ends — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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