Planning Ahead: Understanding Cohabitation Agreements and Other Vital Legal Strategies in Canada
Life is an adventure, and it can be tough to navigate sometimes.
We see moving in with a partner as the next step in a relationship - a fascinating one that can blur the realities of the ‘why ifs’ because ‘why ruin the moment’?
Break-ups, unexpected deaths, and sibling fights are real, and CC&Associates are here to make the process a bit easier. When a life-changing event happens, the last thing you want to deal with is the fight over who gets the favourite family heirloom or the dog.
In this article, we will discuss:
Disclaimer: Please talk to a lawyer if you need more support.
Co-Habitation Agreements
Estate planning
Power of attorneys
Co-Habitation Agreement:
A formal agreement between individuals who live together.
Due to the media and societal myths, things can get blown out of proportion when discussing drawing up an agreement when entering a marriage or a relationship.
A cohabitation agreement can specify much more than just financial stability.
The agreement can include the following:
1. Pets
2. Inanimate objects
3. Favourite household item
4. Family heirlooms
5. Vehicles
6. Home and rental responsibilities
7. Anything you determine to be valuable and want to make clear
who it is.
These are usually items people forget about - that will cause fights and emotional turmoil that no one wants to deal with - especially while heartbroken and going through the worst moments of your life.
It isn’t an easy subject to discuss, but it’s in the best interest of both individuals.
Pets, for example, should be discussed.
Do you want to co-parent your dog if you break up? Or does someone want total ownership of the dog if anything happens?
Documenting this in advance would ensure your decisions are put into action, without question, avoiding tough conversations when you and your partner might need to be on the best of terms.
I have a friend who moved in with her boyfriend at 26. They thought they’d be together forever. They bought a dog, split all their expenses down the middle, and were ready to get married. They didn’t sign a cohabitation agreement– because “they didn’t need one.”
Unfortunately, the relationship didn’t last, and they spent a year fighting about the dog, the down payment and, of course, the equity in the house.
Hiring a lawyer is another considerable expense when dividing assets during a breakup.
A cohabitation agreement is a win-win for both parties.
It can be customized to fit and suit the needs of the relationship and the individuals within it.
2. Estate planning:
Individuals use a plan to determine what happens to their assets and obligations if something happens or they pass away.
Estate planning can be very similar to co-habitation agreements; still, many think it does not apply to them.
A prevalent misconception is that only ‘rich’ people have an estate plan.
Estate planning is much more complex than deciding where your money goes after passing.
Over your lifetime, you collect and keep things sentimental; it could be your car, your extensive farmland passed down from generation to generation, a baseball card collection, a necklace, or a diversified stock portfolio.
Either way, there are assets to your name, and you need to decide who will take control of those assets.
3. Power of Attorney:
the authority to act for another person in specified or all legal or financial matters.
A power of attorney is very similar to estate planning. Many people don’t know the options available to someone employing the tools of a power of attorney.
Some different types of power of attorney include:
a. General power of attorney for property
b. Continuing power of attorney for property
c. Power of attorney for personal care
A durable power of attorney would ensure that financial, legal and property responsibilities would fall under the purview of the selected individual.
These specifications become important when customizing this plan to suit your needs and those of the individuals becoming your power of attorney.
Some individuals like to place their children in this position, but it’s common for children to have different personality traits and specialties. It’s crucial to divide the responsibility if necessary.
If we use my situation as an example, I have three children.
One child is a business major specializing in finance and marketing; one went to a teacher’s college, and a third is applying to law school after specializing in corporate law during his undergrad.
Looking at the vast knowledge that they have gained, I have set up a plan to suit their specialties best.
Another advantage of having more than one power of attorney is ensuring a majority vote on every decision.
Having a majority vote ensures the greatest likelihood of fairness if something happens.