Some people believe that the entering into of Cohabitation Agreements and Marriage Contracts is dooming their relationship to failure. This could not be further from the truth. In certain cases couples enter into a relationship with varying degrees of wealth or are giving up something, such as spousal support, to unite with another individual. In this case, the parties require the certainty that their lifestyle or assets will be maintained if their is a breakdown of their relationship.
The negotiation of a Cohabitation Agreement or Marriage Contract allow the parties to set a framework for the division of their property and spousal support obligations should they terminate their relationship at some time in the future. The certainty of the terms of this agreement allow both parties to make decisions throughout their cohabitation and/or marriage knowing how this will ultimately affect them if there is a breakdown of their relationship.
Further, Marriage Contracts, in particular, can address the inequality of the Family Law Act which states that upon marriage the home in which the parties are residing becomes the matrimonial home and the equity is immediately divided equally between both parties on marriage, even though the non-owner of the home is not on title. In many cases, the owner of the property, now the matrimonial home, is more than willing to share the equity in the home with their new partner from the date of marriage onwards, but seeks to protect the equity they had accumulated on the date of marriage. A Marriage Contract can protect this equity in a number of ways which can be negotiated by the parties.
Finally, the terms of Cohabitation Agreements and Marriage Contracts can be negotiated in a friendly fashion as a win-win for both as the parties are not negotiating the terms of their separation at the termination of their relationship when the bitterness and resentment between the parties is at its highest but rather at a time wherein they are working together to set a plan for their future.
These Agreements are also of significant value to those who have already separated, once or multiple times, as they are not as able to recover from the financial losses that occur at the time of each separation. For example, for those who have already been in one relationship wherein they have had to divide their assets with their former partner, they may be ill able to afford to divide their assets again with their current partner if there is a breakdown of their relationship. In these cases, the individuals may very well comprehend the fact that there could be substantial financial losses with the breakdown of another relationship and wish to protect the assets they have from further division.
These agreements can go a long way in minimizing the financial and emotional stress, at the time of the parties separation, if the parties do ultimately separate.