Domestic agreements are an important tool for resolving disputes between spouses in either a marriage or a common law relationship. The three most common types of domestic agreements are discussed below.

Separation Agreement
This is a contract between spouses whose marriage or common law relationship has ended. It is a good idea to create one to set out in writing your expectations about key issues:

  • child custody and parental responsibilities;
  • support payments;
  • plans for the family home;
  • dividing property;
  • paying family debts.

Separation agreements can be developed at any time, and family-law professionals can assist the parties to come to an agreement. Developing a separation agreement gives the parties flexibility and control over the terms of their agreement, and is generally far less expensive than obtaining a court order.

A separation agreement may be a final settlement of rights, so the parties should consider the potential consequences before signing. Separation agreements are generally enforceable where the parties obtained independent legal advice and truthfully disclosed their assets, although a court might set aside an agreement if it turns out to be unfair or not in the best interests of a child.

Where parties are able to come to an agreement, perhaps with the help of a mediator or collaborative law professionals, a separation agreement is an inexpensive and effective alternative to court action.

Marriage Agreement
This is a contract made when a couple plans to marry. It is sometimes called a pre-nuptial agreement. These agreements typically set out what would happen if the marriage were to end. Sometimes they also address responsibilities during the marriage.

Marriage agreements are ideally suited to couples where one spouse has more assets, or more debts, than the other. It is generally not necessary where the spouses have no significant assets or debts. The substance and intent of the agreement is the same as that described in the section below on cohabitation agreements.

It is important for parties to have independent legal advice and enter the agreement as far in advance of marriage as possible.

Cohabitation Agreements
This is a contract made by parties who are not married but are living together as spouses. These agreements typically address what will happen if the relationship ends, including property division and support entitlement. These agreements often deal with paying household expenses and dividing domestic responsibilities during the relationship.

Cohabitation agreements can be an important way of thinking about the future needs and assets of the family, then planning how to deal with those issues before they cause conflict. A cohabitation agreement would be helpful in any of the following circumstances:

  • the relationship is expected to be lasting;
  • one spouse has much more income or assets than the other;
  • one or both spouses have significant debt; or
  • children are involved, or the couple plans to bring children into the relationship.

Under the Family Law Act couples who lived together in a marriage-like relationship for a period of two years, or who had a child together, are spouses. The general rule is that spouses divide their property equally if their relationship ends. Having a cohabitation agreement in place could protect a spouse whose relationship lasted less than two years, or who waited too long to make a claim on property (there is a two-year limitation period for making a claim). It could also protect a spouse’s entitlement to some assets that are owned by the other spouse, where going to court to give evidence and enforce a trust claim to assets can be costly.

As with all family agreements, it is strongly encouraged that the parties obtain independent legal advice in developing a cohabitation agreement.