Episode #20: Part Two: The 2-Year Trap: Why You Need a Cohabitation Agreement Before Moving In
Moving in with a partner is an exciting milestone. It often feels like the natural next step in a serious relationship. However, what many couples fail to realize is that in many jurisdictions, simply living together for a certain period of time triggers massive legal and financial liabilities.
In a recent episode of The Divorce Circle Podcast, host Sabeena Bubber spoke with Amalia Schön, a North Vancouver-based family law lawyer and mediator at Schön Family Law. Amalia shared critical insights into the legal realities of moving in together and why a cohabitation agreement is the ultimate "insurance policy" for your relationship.
The Two-Year Rule and the "Marriage-Like" Gray Area
One of the most dangerous misconceptions about common-law relationships is that you have to formally declare yourselves as spouses to be treated as such under the law. According to Amalia Schön, this is entirely false.
In British Columbia, for example, the law defines spouses as two people who have been living in a "marriage-like relationship" for a period of two years or more.
“Once that two-year mark passes, the agreement becomes retroactive to the date they started living together.”
The complication often arises in defining what "living together" actually means. Is it formally cohabiting, or just "existing together"? Amalia provides a common modern example: Two professionals each own their own home, but they spend 90% of their time together at one of the homes for three years. If they separate, the question arises: were they living together in a marriage-like relationship? If a court decides they were, their assets and debts may suddenly be subject to division.
Why You Shouldn't "Kick the Can Down the Street"
Many couples avoid talking about cohabitation agreements because it feels unromantic or pessimistic. They prefer to "kick the can down the street" and deal with it later. Amalia warns that this is a critical mistake.
If you wait until you have been living together for almost two years—when legal liabilities start applying—it can be a real problem if you realize you are not financially aligned. Having the conversation early prevents you from investing years into a relationship that might ultimately fail due to fundamental disagreements about money and property.
When Should You Start the Conversation?
Amalia suggests that if a couple is spending a lot of overnights together and has been together for over a year, it is a good time to start thinking about a cohabitation agreement and having that conversation with your partner.
How a Cohabitation Agreement Can Actually Strengthen Your Relationship
It is a common fear that asking for a cohabitation agreement (often referred to as a "prenup" for common-law couples) will damage the relationship. Amalia argues the exact opposite.
Relationships and intimacy are built on the ability to have hard conversations and work through difficult issues together. If a couple can navigate the process of drafting a cohabitation agreement, come to a consensus, and use conflict resolution skills, the relationship will be significantly stronger for it.
The Fear: It means we don't trust each other.
The Reality: It means we respect each other enough to be transparent about our finances.
The Fear: It will cause a fight that ends the relationship.
The Reality: If financial transparency ends the relationship, it was likely going to fail eventually anyway.
The Fear: It's only for the wealthy.
The Reality: It protects everyone from assuming the other person's debt and clarifies expectations.
Amalia acknowledges that sometimes, the negotiation itself leads to the end of the relationship. She views this as a "good thing," because it saves the couple from investing more years into a partnership that was ultimately not going to work out.
The Collaborative Approach to Cohabitation Agreements
Drafting a cohabitation agreement does not have to be an adversarial, lawyer-against-lawyer battle. Amalia notes that the collaborative process is increasingly being used to negotiate these agreements.
This approach is especially helpful when there are significant assets at stake, for higher net worth individuals, or simply when a couple wants professional support navigating what can be a challenging emotional process. In a collaborative setting, both parties have their own lawyers, but everyone commits to working together transparently to build an agreement that feels fair to both sides.
Key Takeaways: Protect Yourself Before You Pack
If you are considering moving in with a partner, keep these key insights in mind:
Get Legal Advice Early: Consider a consultation with a family lawyer as an "insurance policy." It is an investment in your own protection and understanding of your rights.
Don't Wait for the Two-Year Mark: Have the hard financial conversations before you merge your lives and trigger legal liabilities.
Beware the Gray Area: Even if you maintain separate residences, spending the vast majority of your time together can sometimes be construed as a "marriage-like relationship."
Use the Process to Build Intimacy: Treat the negotiation of a cohabitation agreement as an exercise in communication and financial transparency.
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To learn more about Amalia Schön and her collaborative family law practice, visit Schön Family Law. For expert mortgage and financial guidance, visit Sabeena Bubber's website.