In the Northwest Territories, couples who live together in a conjugal relationship but are not legally married are increasingly choosing to formalize their financial arrangements through cohabitation agreements. These contracts serve a crucial role, particularly because common-law partners in the NWT are subject to many of the same legal obligations as married spouses, including rules governing property division and spousal support.

A properly drafted cohabitation agreement allows unmarried couples to take control of their legal and financial relationship, either to adopt or override the default rules set out in the legislation. This article outlines the legal framework for cohabitation agreements in the NWT, the statutory authority that permits them, and how they can be made enforceable.

Are Cohabitation Agreements Permitted in the Northwest Territories?

Yes. Cohabitation agreements are expressly authorized under the Family Law Act, SNWT 1997, c 18. This statute governs the rights and obligations of both married and unmarried spouses with respect to property and spousal support.

Section 4(1) of the Family Law Act provides:
“Persons who are cohabiting or intend to cohabit may enter into an agreement in which they agree on their respective rights and obligations during cohabitation, or on ceasing to cohabit or on death, including

(a) ownership in or division of property;

(b) support obligations;

(c) the right to direct the education and moral training of their children, but not the right to custody of, access to and guardianship of the estates of their children; and

(d) any other matter in the settlement of their affairs.”

This provision permits cohabitation agreements and places them on the same legal footing as marriage contracts and separation agreements.

Who Qualifies as a Common-Law Partner in the NWT?

For the purposes of property division and spousal support under the Family Law Act, a “spouse” includes both:

• A legally married partner, or
• A person who has cohabited with another in a conjugal relationship for at least two years, or for a shorter period if they have a child together

This means that once a couple qualifies under this definition, they are treated identically to married spouses for most legal purposes. Property acquired during the relationship becomes subject to division, and support obligations may arise.

Importantly, couples may enter into a cohabitation agreement before they reach the two-year threshold, in anticipation of gaining legal rights under the Act.

Why Are Cohabitation Agreements Important in the NWT?

The Northwest Territories is one of the jurisdictions in Canada where common-law partners are included in the family property division regime. Once a couple has lived together for two years (or has a child together), they may be subject to:

• Equal division of family property
• Spousal support claims
• Applications for exclusive possession of the family home

A cohabitation agreement allows couples to contract out of these statutory entitlements, provided the agreement meets the legal requirements. This is especially relevant where one party brings significant assets into the relationship or wishes to protect business or inheritance interests.

What Can a Cohabitation Agreement Cover?

The Family Law Act allows broad flexibility in the contents of a cohabitation agreement. These agreements can address:

• Ownership and division of property, including future acquisitions
• Exclusion of certain assets from equal division (e.g., pre-relationship property, inheritances, gifts)
• Spousal support, including waivers, limitations, or fixed terms
• Debt responsibility and financial obligations during the relationship
• Property and support arrangements upon death
• Life insurance or estate planning commitments

These agreements may not, however, override the best interests of the child in parenting or child support decisions. Parties cannot contract out of statutory child support obligations or make binding parenting arrangements in advance of a dispute.

How to Make a Cohabitation Agreement Enforceable in the NWT

The Family Law Act sets out several formal and substantive conditions that must be met for a cohabitation agreement to be valid and enforceable.

1. Formal Requirements

For a cohabitation agreement to be enforceable in the Northwest Territories, the Family Law Act stipulates the following formal requirement in section 7(1) of the Family Law Act:

“A domestic contract, including an agreement to amend or rescind a domestic contract, is unenforceable unless it is made in writing, signed by the parties and witnessed”

2. Voluntary Consent and Capacity

The parties must have the mental and legal capacity to enter into a contract and must do so voluntarily. The courts will consider whether:

• There was duress, coercion, or undue influence
• One party lacked mental capacity or was otherwise impaired
• The agreement was signed under pressure or without adequate time for review

If any of these factors are present, the agreement may be invalidated.

3. Full and Frank Financial Disclosure

Each party should provide written disclosure of:

• Income and earnings
• Assets (bank accounts, real estate, investments)
• Debts and liabilities
• Business interests

This disclosure should be documented and attached as a schedule to the agreement whenever possible.

4. Independent Legal Advice (Recommended, Not Required)

While not mandatory under the Family Law Act, obtaining independent legal advice (ILA) is highly advisable. It helps establish:

• That each party understood the agreement
• That there was no coercion or misrepresentation
• That both parties had the opportunity to negotiate and consider their rights

If challenged, courts are more likely to uphold an agreement if each party had the benefit of legal advice. Certificates of ILA should be included as part of the agreement where possible.

5. Unconscionability and Fairness

A court may set aside or vary a cohabitation agreement if:

• It is unconscionable
• There was failure to disclose financial information
• A party did not understand the nature or consequences of the agreement

An unconscionable agreement is one that is so one-sided as to be unjust. However, Yukon and NWT courts generally respect the parties’ contractual autonomy unless the circumstances are egregious.

Can a Cohabitation Agreement Waive Spousal Support?

Yes. Spousal support may be waived or limited by agreement. A cohabitation agreement may:

• Waive spousal support entirely
• Set out specific entitlement or conditions
• Fix the amount or duration of support

While waivers are enforceable, courts retain the discretion to override them if enforcement would result in undue hardship or if the agreement was not entered into fairly.

Does the Agreement Continue If the Parties Marry?

Yes. In the NWT, cohabitation agreements remain valid after marriage unless the parties state otherwise.

Estate Planning and Death-Related Clauses

The NWT’s Intestate Succession Act, RSNWT 1988, c I-10, provides limited inheritance rights to common-law partners who meet the statutory definition of “spouse.” A cohabitation agreement may clarify or modify what each party is entitled to upon the other’s death, including:

• Waiver of estate claims or rights to apply for family maintenance
• Obligations to leave assets via a will or maintain life insurance
• Sharing of pension or RRSP benefits

However, these provisions should be used in conjunction with proper estate planning. A cohabitation agreement is not a substitute for a valid will.

Distinctive Legal Features in the NWT

The NWT treats qualifying common-law spouses the same as married couples in matters of property and support. This elevates the importance of cohabitation agreements for those who wish to preserve financial independence.

Best Practices When Drafting a Cohabitation Agreement in the NWT

• Ensure the agreement is in writing, signed, and witnessed
• Exchange full financial disclosure, in writing and attached to the agreement
• Include clauses addressing:
  • Property ownership and division
  • Spousal support rights or waivers
  • Responsibilities during the relationship
  • Entitlements on death
• Confirm whether the agreement survives marriage
• Encourage independent legal advice for both parties
• Coordinate with estate planning documents (e.g., wills, powers of attorney)

Conclusion

In the Northwest Territories, cohabitation agreements offer an essential legal tool for unmarried couples who want to establish certainty over their property and financial rights. Given that common-law partners are treated like married spouses under the Family Law Act after two years of cohabitation (or less if there they have a child together), proactive planning is critical.

With proper drafting, disclosure, and attention to formal requirements, a cohabitation agreement can protect both partners, reduce future conflict, and ensure their intentions are respected in law. Whether you are just starting a life together or well into a relationship, it is never too early to plan ahead.

You’re Invited to Call or E-Mail!

If you’re considering a cohabitation agreement — or have already made your decision — you’re invited to call or email us. We’ll explain for free how you can protect your assets and plan your estate. You can call us toll-free at (800) 407-2570 or email us using our contact form here. We can help you anywhere in Ontario, including Ottawa, Toronto, Mississauga, Brampton, and Hamilton.