LIVING TOGETHER: Not the Same as Being Married
One of the most common misconceptions in family law is that common law spouses have the same rights upon separation as married couples. In Ontario, the property rights of marries couples are governed by Parts I and II of the Family Law Act. The Act defines spouse as two people who are married.
This definition of spouse was challenged as discriminating against unmarried couples in a Nova Scotia case that went all the way to the Supreme Court of Canada. The legislation being challenged was very similar to the Ontario legislation. The Supreme Court decided that couples have the opportunity to decide whether to live together or marry and therefore whether to opt in or out of the scheme for division of property. They also have the ability to create an equal partnership with a cohabitation agreement. The Court concluded that this ability to choose meant that the different treatment of married and unmarried couples was not discriminatory.
This means that, under the current Ontario legislation, while married couples are entitled to equalize their net family assets at separation, common law couples are not. This is true regardless of the length of time the couple has been together and whether they have children.
For common law couples, it is therefore especially important to hold title of assets jointly if the intention is to share them. This applies to real property, bank accounts, investments, RRSPs, etc. It also applies to debts! Of course, certain assets, like pensions, cannot be jointly held.
Another option is to prepare a cohabitation agreement. This can be done at any time, not just at the beginning of the relationship.
When common law couples separate without an agreement or jointly held assets, the only remedy is to claim unjust enrichment or constructive trust. However, these claims can be difficult to prove, take extensive time to resolve, and be expensive to pursue.
It is important to remember that all relationships end, if only with the death of one of the partners. If you are in a common law relationship or considering entering one, you would be well advised to consider a cohabitation agreement. Nicola Savin and Jacqueline Peeters will be happy to speak with you further.Share