Prenuptial and cohabitation agreements are contracts that define what will happen financially if your relationship breaks down. Cohabitation agreements are used by couples who are not married but live together, and prenuptial agreements (or marriage contracts), are made by couples before they get married. These agreements can both be prepared for you by a lawyer (a notary in Québec), and each partner should seek independent legal advice before signing either of them.
Some couples decide to enter into these types of agreements so that they have control over who gets what in the event of a breakup.
If married couples get divorced in Canada, there is often conflict regarding who should retain ownership of which assets and liabilities. Even though the property rights of each partner in the event of a divorce are defined by law, couples sometimes disagree over who should get which debts and assets.
Prenuptial agreements and marriage contracts help couples avoid problems by providing clarity from the beginning to ensure that each partner is treated fairly in the event of a breakup.
Similarly, if a couple that is living together in a common-law relationship breaks up, their rights and obligations regarding their assets and liabilities are not very well-defined by law. Because of this, some couples choose to sign a cohabitation agreement so that they both know who is entitled to what if they break up.