Heads Up On “Shacking” Up

Whether it’s a first relationship for a millennial or a second or subsequent relationship for others including baby boomers and seniors, these days more and more couples are choosing to live common law rather than marrying. According to a 2017 census, 21.3% of all couples in Canada were living common law in 2016 compared to 6.3% in 1981. There is also a rise in people living common law before marriage. According to the census, 39% of married people aged 25 to 64 lived common law for an average of 3.6 years prior to marrying.

There may be a myriad of reasons for living common law depending on circumstances, but one myth that needs to be unraveled is the notion that it is simpler not to get married. Common law relationships have a unique set of considerations.

Common law relationships can become complicated if one partner dies without a will. For example, under Ontario intestacy rules, a common law partner does not fall under the definition of spouse and is not entitled to any share of the deceased partner’s estate if he or she dies without a will.

Under the Ontario Family Law Act (the “FLA”), on a marriage breakdown or on death, there is an equal division of property acquired during marriage, subject to certain exceptions such as inheritances or gifts. Under the FLA, spouses who are not legally married to each other have no rights to equalization of family property, although they have a right to support after cohabiting for three years or earlier if they have a child together, as well as possible equitable claims against the other’s property, which would have to be pursued by litigation.

If no domestic contract is in place to provide for what happens on a relationship breakdown, including by death, a variety of complications arise including if a partner did not designate his or her partner on retirement or other plans or life insurance policies, if one partner is living in the other partner’s home rent-free, if one partner paid rent or expenses or made capital contributions, or if there are children from a previous relationship.

What if a partner dies without a will and he or she has not made adequate provision for the surviving partner, owns the home in which both partners live and pays most expenses. The surviving partner would not have rights to equalization of family property under the FLA, although he or she may have a support claim and a possible legal claim, not under legislation but under other equitable doctrines, to a share of property. After the deceased partner’s death, the surviving partner would have no existing legal right under legislation to continue to live in the property for the period of time he or she wishes and he or she may now become responsible to pay rent and certain expenses. The surviving partner would not have any automatic right to receive any funds from the deceased partner’s estate to help pay these expenses.

Another consideration is with respect to personal care, including medical and health consent if a person becomes incapable and does not have a Power of Attorney for Personal Care, in which case a family member would automatically have the right to make these decisions (unless someone is appointed by the Court or the Consent and Capacity Board). A spouse is included in the list of family members and in the definition is two people who are living in a conjugal relationship outside marriage and have cohabited for at least one year or earlier if they have a child together.

Despite the broad definition of spouse, there still may be an issue where family members do not recognize the status and significance of the common law relationship and do not want to include or respect the decision of the partner.

Common law relationships if not properly planned for may cause complexity for your executors administering your estate, and result in disputes and even litigation, and may cause uncertainty among your substitute decision makers with respect to your personal care, including medical and health care consent, and hardship for your partner. The same issues will arise no matter what age, but different factors may come into play, such as the quantum of your assets or the number of people to whom you provide support, such as children.

No matter what stage you are at in life, whether you are a millennial, a baby boomer or a senior, it is important to have conversations around these topics with your partner, to seek legal advice and to effectively plan.

-Marly Peikes

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.
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