A Conversation on Cohabitation Agreements with a Family Law Lawyer

At Northwood, cohabitation agreements are a frequent topic of conversation, not only with our clients but increasingly with their children and the next generation. As trusted advisors, we find that while families are comfortable discussing these matters with us, raising the topic with a partner can still feel emotionally charged. There is a lingering taboo surrounding these agreements, and for many, knowing how to start the dialogue is the biggest hurdle.

When viewed through the lens of thoughtful planning, these agreements become far more approachable. Much like a shareholders’ agreement provides structure for a business, a cohabitation agreement establishes an intentional framework for a personal partnership. For families with intergenerational assets, such as operating businesses, investment portfolios, or vacation properties, these agreements are essential tools. They ensure that family wealth is preserved and that expectations are clear for both parties from the outset. By encouraging transparent conversations, parents can help remove the stigma. When framed as a practical safeguard rather than a signal of mistrust, a cohabitation agreement is seen for what it truly is: an extension of prudent planning and a commitment to long-term clarity. When this is communicated well in advance of any actual relationships - as a shared family value or policy - it becomes far less about the individual family member or their specific partner, and more about a thoughtful, consistent approach to stewardship and clarity for everyone involved.

In this article, we explore some of the most common questions and misconceptions surrounding cohabitation agreements and explain why they are a practical component of financial planning. To help shed light on these themes, we spoke with Toronto family law lawyer Anna Marie Musson of M&Company, who offers her perspective on how couples can navigate these conversations with clarity and confidence.

Who typically needs a cohabitation agreement?

Anna Marie Musson: While there isn’t a one-size-fits-all answer, cohabitation agreements are useful for anyone seeking clarity about their financial future. They are particularly vital in the following scenarios:

• Significant Asset or Income Disparity: An agreement protects both parties by establishing fair expectations; safeguarding the higher-earning partner from disproportionate claims while providing the lower-earning partner with a clear financial roadmap.
• Business Owners and Professionals: For entrepreneurs and partners in professional practices, these agreements shield company equity and growth-stage ventures from potential claims.
• Individuals with Pre-Existing Assets: This includes those who enter a relationship with real estate, investment portfolios, or an inheritance intended to remain separate property.
• Blended Families: For those with children from previous relationships, an agreement ensures that assets earmarked for a child’s inheritance or education remain protected.
• Homeowners with a Resident Partner: If a partner is moving into a home you already own, an agreement clarifies that contributions toward utilities or renovations do not inadvertently create an ownership claim.
• Recipients of Family Wealth: For beneficiaries of trusts, these agreements are a key part of generational wealth planning, ensuring that the structure of a family’s legacy remains intact.

We often work with entrepreneurs and professionals. Can you expand on why a cohabitation agreement is particularly critical for them?

Anna-Marie Musson: Relationship breakdowns can be operationally catastrophic for a business. Without an agreement in place, a partner may be able to claim an interest in the business, which can trigger forced liquidity events and disrupt operations. In my practice, I frequently see three major risks:

• Debt Burdens: If one partner is required to buy out the other’s interest, it can encumber the company with significant debt, draining the capital needed for growth and day-to-day operations.
• Exposure of Data: Litigation requirements that force the disclosure of confidential business information and client relationships. This can disrupt business operations or cause reputational harm.
• Appreciation Claims: A partner may claim a share of the business's growth during the years of cohabitation, even if they had no involvement with the company.

One of the assumptions we hear most often is that a cohabitation agreement isn’t needed if a couple isn’t “legally married.” In reality, what does Ontario law require?

Anna-Marie Musson: That is the single biggest misconception. While Ontario law does not provide automatic property division rights for unmarried couples, this lack of structure actually creates more risk, not less.

Without an agreement, separating partners often face unpredictable and expensive "equity claims" based on contributions to renovations, mortgage payments, or even business growth. These claims can lead to years of litigation with legal costs reaching six or seven figures for ultra-high net worth individuals. After just three years of living together, spousal support obligations can trigger, potentially requiring you to share half your income from employment and investments indefinitely.

Some people worry that bringing up an agreement might seem one-sided or imply a lack of trust. How do you view the "fairness" of these documents?

Anna-Marie Musson: A well-crafted agreement is a tool for certainty, not a weapon for exploitation. It requires full financial disclosure from both parties, creating total transparency regarding assets and debts.

For the lower-earning partner, an agreement provides:

• Guaranteed Entitlements: Predetermined support or property sharing that avoids the stress and cost of "speculative" legal claims.
• Protection for Sacrifices: Mechanisms to recognize career sacrifices, child-rearing, or contributions to a partner’s education.
• Financial Clarity: A clear understanding of the combined financial picture, which allows for better joint retirement and estate planning.

How should someone approach their partner about this potentially sensitive topic?

Anna-Marie Musson: The key is to frame it as an act of responsible financial planning, no different than drafting a will or setting an investment strategy. You are essentially removing the single biggest source of conflict and ensuring that both parties' resources are preserved for the future.

I suggest starting with a focus on the relationship itself. You might say: "I value what we’re building together too much to leave our future to chance. I want us to have total clarity so we can focus on our life together without any lingering uncertainty."

It is best to raise the topic early, ideally well before moving in or purchasing property. I also encourage clients to emphasize that independent legal advice for both partners is not just a formality, it is essential. It ensures the agreement is fair and enforceable, and most importantly, it ensures that both people feel truly protected and heard.

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Anna‑Marie Musson’s message is consistent and clear: a cohabitation agreement is a strategic planning tool, not a reflection on the strength of a relationship. In fact, the process often fosters greater intimacy by requiring full financial disclosure and establishing a shared understanding of how wealth will be managed. By approaching cohabitation with this level of intentionality, couples can build their future on a foundation of transparency and mutual respect.

At Northwood, when we speak with families about drafting a will, we often say, “Let’s assume you pass away in the next few years.” It’s not because we believe that outcome is likely, but because this framing helps anchor the discussion and keeps it practical rather than overwhelming. We take the same approach with cohabitation agreements: for the purpose of planning, we have to assume the relationship ends, even though that outcome is very unlikely. This framework isn’t about pessimism; it’s about creating clarity, fairness, and resilience. By approaching these conversations with intention, couples are better equipped to protect themselves, their families, and the future they are building together.