Agreements in the family context usually fall into one of three categories: cohabitation agreements, prenuptial or marriage agreements, and separation agreements.

All of them do the same job: defining each party’s present and future rights and obligations.

Cohabitation agreements and prenuptial agreements can be delicate subjects as they generally occur early in the relationship. Separation agreements can be hard work because by that time often trust between the parties is low and emotions are high. Awkward or difficult as agreements can be, a properly crafted and professionally drafted agreement can reduce or eliminate expensive, time consuming and stressful litigation. In almost all cases, the potential savings of having a good agreement prepared is well worth the effort. A cohabitation agreement sets out your intentions with respect to your respective finances and any assets or debts brought into the relationship.  It can also cover what each party can expect if the relationship doesn’t work out.

How will property be divided? Who will stay in the home? Will one party pay the other support? A marriage contract is similar except for married spouses. If it is signed before the wedding, it is called a prenuptial agreement. Under the FLA, property either party brought into the relationship, or property that was given to one party is excluded from division, but increase in value of the asset is divided 50-50. This is an example of something people may choose to address in a marriage or cohabitation agreement. They can agree that the asset one spouse brought into the relationship remains that spouse’s property, including any increase in value during the relationship. A separation agreement can deal with custody, guardianship and parenting time, financial support, and the division of assets and debts.

Once the agreement is properly signed, it is binding on the parties, much like any other contract. A main difference between family contracts and other contracts is that if one party makes an application to court later to have the agreement varied or set aside, the court applies a particular legal test for family agreements. First, the court looks at the circumstances in which the agreement was made, particularly whether there was undue pressure from one of the parties, whether all relevant information was available to the parties before they signed and if the parties received legal advice. Second, the court looks at the substance of the agreement, taking into account whether the agreement substantially complies with objectives of the Divorce Act, or operates fairly. Though it may seem that a court can easily change or set aside an agreement, it just is not the case where the agreement has been achieved by fair and reasonable methods and the parties had legal advice.