No one enters a romantic relationship with "how can I protect my assets and income?" as their first thought. It should be considered though – especially if you are choosing to live together or get married. A spousal relationship has significant impact on each spouse's property rights. A cohabitation or pre-nuptial agreement is not a suggestion that your relationship will end. Rather, it's a means of being prepared in the event your relationship does breakdown. Consider it an insurance policy for your property and financial rights. Having a thorough and enforceable agreement in place at the time of relationship breakdown can make the separation process much easier.

So, what can a cohabitation/pre-nuptial agreement do for you? In Saskatchewan, spouses (either through marriage or common-law – living together for a period of two years) are presumed to be entitled to 50% of the value of all family property. This 50% rule is subject to certain exceptions and exemptions, but for today, let's just assume everything is split 50/50. An agreement allows you to opt-out of this arrangement and deal with your property in a way that better suits you. For example, you can protect your interest in your retirement savings, your home, your shares in a corporation, etc., from division. Absent an agreement to the contrary; these things will be divided according to Saskatchewan laws. You can choose to protect only certain assets and to divide others in accordance with the legislation. You can also choose to divide an asset based on the proportionate contribution each spouse made to its acquisition (plan to make a down payment on that house, but don't want to lose it? This is how).

When it comes to cohabitation/pre-nuptial agreements, you can pre-arrange the division of your property in whatever manner suits you best, so long as the agreement is properly executed and complies with the requirements associated with interspousal contracts as set out in Saskatchewan legislation. We should also note that parties can enter agreements at any time to address how their property will be dealt with in the event of separation, including after they have become spouses. That said, it is best to address those matters before you become spouses, as certain rights vest to you under law once you are spouses. So, if your partner refuses to sign an agreement, determining how your property will be divided on separation may no longer be up to you.

If you’d like to learn more about cohabitation/pre-nuptial agreements, we’d love to hear from you. 

Contact our family law team at www.mckercher.ca/familylawsask.