How a cohabitation agreement can help protect your assets

How a cohabitation agreement can help protect your assets

Many people who have been divorced these days go on to remarry. While some remain cautious about entering into a new serious relationship, others may have the view that, this time around, they have found the perfect partner and they don’t need to protect themselves from the possibility of the relationship ending.

Regardless of how you might feel it is always a good idea to have a cohabitation agreement when entering into a new serious relationship. If you plan on getting married it is also important to redo your will as marriage will make your current will null and void. If you die and you haven’t made a new will reflecting your current wishes your estate will be divided between your new spouse and any children you may have, regardless of what your previous will said.

Wills and cohabitation agreements may seem like very separate documents, but they can actually work together to make sure you’re your estate is distributed according to your wishes. This is especially important if you have kids from a previous marriage who you would like to benefit from your estate. It is possible to make a will “in contemplation of marriage” to a new specified partner to make sure all your bases are covered. Even people who don’t think they will remarry sometimes change their mind and that way you will always have a valid will. If you never get married your previous will remains intact.

When couples remarry and make new wills it is not uncommon for the new spouse to be the main beneficiary of the estate. Both spouses’ wills will also outline how any joint wealth will be distributed when they die. This often includes kids from first marriages whom they want to have benefit from their estate.  

While making sure to create a new will it is essential to realize that it still doesn’t ensure that your estate will be distributed according to your wishes. When one spouse dies there is nothing stopping the surviving spouse from changing their will. What if your current spouse decides that she/he doesn’t like your kids from your previous marriage? This might mean that they will miss out on assets that were meant for them.

This is where the cohabitation agreement comes in. In a cohabitation agreement you can “lock the wills” binding both spouses contractually to keep the will as designed. This means neither spouse can make any changes to the wills even when one of you dies. The only exception to this is if the beneficiaries outlined in the will give their consent.  

The primary role of a cohabitation agreement is to outline the rights and obligations between a couple, but it can also be a useful tool to keep both spouses honest when it comes to the distribution of assets. There are all sorts of different scenarios these days when it comes to how couples want to divide their estate in a second marriage. No matter what you decide it is important to make your intentions clear. Working with a lawyer to create a cohabitation agreement in concert with new wills is a great idea to ensure that all your beneficiaries benefit from your estate according to your wishes.

About Tom Byrne

Tom Byrne is a lawyer with offices in Kemptville and Cornwall, Ontario. He is a general practitioner with experience in real estate, wills, powers of attorney and estates, family law and criminal and civil litigation. A country boy at heart, Tom enjoys living and working in rural Ontario and the personal touch he is able to offer his clients through his small practice. He is an active member of his community through his work with the Knights of Columbus and support of the Kemptville Youth Centre.