With more couples choosing not to get married, it’s important to consider the financial implications of living common law.
According to Statistics Canada, the number of couples living in common law relationships has been on the rise, increasing 447 per cent between 1981 and 2021. In 2021, 79.3 per cent of people aged 20-24 that were in relationships were not married.
“I think sometimes people are under the mistaken belief that not being married makes things simpler,” says Stephanie Battista, partner at O’Sullivan Estate Lawyers. “But that’s actually not the case.”
If you are part of a common law arrangement, it is important to know your rights if you ever need to leave the relationship.
Property ownership and the rights of common law couples
Because common law couples don’t necessarily share the same rights as married couples, it can lead to complications when it comes to owning property.
For tax reasons, the Government of Canada identifies a couple that has been cohabiting for one-year as common law, but as Battista points out, “with common law, it’s actually based on provincial laws based on territorial law.”
In Ontario, for instance, common law couples “don’t have the same rights to a matrimonial home, which is the… primary residence of the couple,” notes Battista. “So if you have a common law couple, and only one of them owns the house, and that person dies, without a will the surviving common law partner could be out of luck.”
Having a will can help protect your estate, ensuring your partner has a stake in your family home regardless of what your marital status is.
“If you were married… your married partner might have some recourse against it to kind of make things equal.”
“If you are common law, and your intention is that you and your common law partner are sharing in your property, you need to have a will.”
No matter where you reside, having both you and your partner’s names on the title of property can help protect you. Battista comments that if both parties in a couple are “contributing to this home, and they’re both purchasing the home and they’re going to live in it together, then they should both be on the title.”
While there are always exceptions to the rule, being named on the title ensures that you have a stake in the property’s ownership, protecting you in the event the relationship falls apart.
Cohabitation agreements and common law relationships
Similarly, if you are in a common law relationship, a cohabitation agreement can help prevent headaches should your relationship not work out or if the unforeseeable occurs.
Battista notes that cohabitation agreements help establish what expectations are for property in a common law relationship.
“A cohabitation agreement is something that we also do recommend for common law partners,” she says. “It’s a way for each party to have an open and frank discussion about what they’re expecting to give each other.”
No matter where you’re living, a cohabitation agreement can help you and your partner dictate what happens to your property.
“A contract I think adds another layer of protection there,” notes Battista. “You’re agreeing to a distribution. And whatever that distribution is, you’re deciding to deviate from the provincial and territorial legislation in a manner that you both agree with.”
Provincial and territorial definitions of common law
If you’re living with a common law partner and own — or are thinking of purchasing a home together — you should familiarize yourself with your province or territory’s laws regarding property ownership.
If you have continually lived with a person for a period of three years, or you have a child and are in a relationship of permanence for less than three years, you are considered to be in an adult interdependent relationship.
Under the (Family Property Act)[https://www.alberta.ca/dividing-property-between-unmarried-partners.aspx], individuals in adult interdependent relationships have the same right to claim on property as married couples.
You can also enter an adult interdependent partner agreement that provides the same protections.
In B.C., for the purposes of the (Family Law Act)[https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/11025_01], two people are considered spouses if they have lived together in a “marriage-like relationship” for a period of at least two years. An individual is also defined as a spouse if they have lived in a marriage-like relationship and have a child together and have lived together for under 2 years.
No matter the arrangement, couples that are defined as spouses are entitled to spousal support.
Under the Family Law Act, spouses are entitled to half of the couple’s property, excluding the property the individuals’ possessed prior to the relationship.
Under the Family Property Act, if you and your partner have registered with the Vital Statistics Agency or have lived together for at least three years, you are entitled to the same property rights as a married couple. If you and your partner have a child, some acts may apply to you if you have lived together for one year or less.
If you and your partner have lived together for at least three years you are considered common law. This means that you have a legal obligation to support your partner if they become substantially dependent on you.
If you and your partner have been living together for a year and have a child together, you are also considered common law.
If one of the partners owned property before you became common law, the person who brought it into the relationship has a legal right to it. If, however, the property was acquired together, both individuals may have a claim to it.
In Newfoundland, a couple can be considered common law after living together for two years in a “conjugal relationship.”
Despite this, you will not have an automatic right to inherit property if your partner pre-deceases you, unless it is explicitly stated in a will.
SImilarly, if you have purchased an asset together like a home, the title needs to be in both of your names for it to be divided equally if the relationship ends.
In the Northwest Territories, you are considered spouses if you have lived with another person for two years in a marriage-like relationship, or have lived for a shorter duration with your partner and have a child together.
Under the law, spouses are entitled to equal shares of any family property unless a written contract was created before or during the relationship that states otherwise.
In Nova Scotia, you are considered a common law couple if you and your partner have been living together for at least 12 months or have a child together.
Common law partners will have the same responsibilities for services such as child support, but under the Matrimonial Property Act they do not have the same claim to property as married couples or registered domestic partners. If a common law couple separates, they must agree on the distribution of property among themselves. If they are unable to come to an agreement they can go to court for resolution.
At the time of writing, there are proposed changes to the Matrimonial Property Act. The Family Property Act would provide many of the same rights to common law couples as to married couples.
If you are presently in a common law relationship, or are moving in with your partner, consider becoming registered domestic partners to help protect your rights.
In Nunavut, the definition of spouse extends to a couple who have lived together for at least two years, or they live together and have children together and are in a relationship of some permanence.
If spouses separate with no chance of reconciliation, whichever spouse has the lower net-value of property is entitled to one-half of the difference between their and their spouses value.
In Ontario, a couple must have been living together continually for three years to be considered common law.
After the three-year period, individuals will have the same obligations to one another as those of spouses in the eye of the law. If a couple has a child together by birth or adoption, this takes precedence over the three-year term.
Despite being common law, if a relationship dissolves, couples do not have the same legal rights when it comes to property that married couples do.
“In Ontario, common law partners do not have the same rights as married partners on our intestacy [death without a will] rules,” observes Battista. “So if you die without a will, and you have a common law partner, they’re not entitled to your estate, they don’t have… a share in their estate.”
For instance, if a home was purchased by the couple together, but only one of the spouse’s names appears on the title of the property, that individual would have a legal claim to it.
While no one wants to imagine their relationship falling apart, it’s a good idea to take steps to protect yourself and your investments should the worst occur.
A legally binding cohabitation agreement sets out the terms of how property will be divided and what support individuals are entitled to. This can include things like child support and division of property.
Prince Edward Island
In P.E.I., couples that have lived together for three years, or cohabit and have a child together, have the same legal obligations as married couples.
Cohabiting couples do not have the same right to property unless a cohabitation agreement has been entered into. As in other provinces, cohabitation agreements are legally binding and outline things such as ownership and division of property.
To be considered common law in Quebec, a couple must live together for at least 12 months, or you need to be living togetherand have a child together.
Like in Ontario, common law couples do not have the same right to property as that of a married couple. A special contract will need to be established to give individuals a claim to property that was purchased together.
If a common law couple lived in a shared property, but it was only owned by one of the couple, if the relationship ends the person whose name appears on the title can decide if the other party can stay there. If both of the couple’s names appear on the title, then they must decide together who stays in the home and who leaves.
In Quebec, couples are able to enter into a civil union that offers the same rights and obligations as a married couple. Civil unions are only recognized in Quebec, and therefore do not have precedence through the rest of Canada.
Civil unions, like married couples, entitle both parties in the relationship to an equal partition of assets acquired after the signing of the union.
Saskatchewan requires individuals to have cohabited for a period of no less than two years to be considered common law. After this time, family property will be divided equally unless another arrangement has been made or is deemed more suitable by the courts.
In Yukon, to be considered common law you simply have to have cohabited with your partner and be in a relationship of some permanence to be spouses. Spouses are entitled to equal portions of the family home, but a claim must be made on the property within a year of the relationship ending.
Similarly, if the relationship ends and you wish to receive financial support, you must apply to the court within three months.
The importance of a will in a common law couple
No matter where in Canada you reside, knowing how you want to distribute your property is critical. Battista observes “if you’re a common law partner and you are in a jurisdiction where common law [couples] are not legally recognized the same way as a married couple, having a will that says I want everything to go to my common law partner is extremely important.”
Having a legally binding statement of your intended distribution of property ensures that “no matter what happens, it doesn’t really matter what the law says, everything’s going to each other, we’re OK with that.”
As a final thought, Battista also stresses the importance of common law couples having clearly stated power of attorneys for property and personal care.
“You should have them. They’re often an overlooked document,” she notes.
Wherever you live, if you own or are going to be purchasing property with your common law partner, it is important to speak to a lawyer to discuss the implications of your estate. You don’t want to discover too late that one of your most valuable assets can be the cause of unnecessary legal headaches.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.