It is increasingly common for couples to choose to live together without first getting married. This decision may be seen as an intermediary step in the relationship before marriage. Some might view the choice to live with a romantic partner as a casual or temporary arrangement. Others may treat this arrangement as an alternative to legal marriage. Many Canadians may not see the point of going through the fuss of a legal marriage when it would not affect their daily lives in a way that they consider to be meaningful. Common-law spouses often assume their relationships have the same legal status as married spouses. While common-law relationships might look and feel the same as a legal marriage, the legal implications differ significantly.
In Ontario, common-law spouses have fewer rights than their married counterparts. This is particularly apparent when one of the common-law spouses dies. Under Ontario’s Family Law Act, when a married spouse dies, he or she may elect for an “equalization” of net family property. This means that the surviving married spouse is entitled to the same property division at death as at divorce. Theoretically, a married spouse will not be financially worse off at the death of a spouse than if the relationship breaks down at an earlier stage. The option of electing for an equalization of net family property instead of inheriting pursuant to a will or on an intestacy is only available to married spouses.
Another example of the limitations to the rights of surviving common-law spouses becomes relevant when the predeceasing spouse dies without a will. Under the Succession Law Reform Act (the SLRA), married spouses will inherit a preferential share of $200,000, plus some or all of the remaining property on an intestacy. Ontario law does not provide for any comparable benefit to surviving common-law spouses.
Common-law spouses and married couples alike are entitled to make a dependant's support claim against the estate of a deceased partner, pursuant to Part V of the SLRA. Under the SLRA, “spouse” is defined to include people who are not legally married but have lived in a conjugal relationship continuously for a period of at least three years. There is no “bright line” to determine whether or not common-law spouses are in a conjugal relationship, whereas it is clear whether or not a couple is married.
Common-law spouses can take steps to create an estate plan to avoid financial hardship and/or litigation at death. Domestic contracts can be entered into before or after cohabitation begins and can be updated from time to time, as may be necessary as the financial circumstances of the couple develop. These contracts can be a useful tool to delineate rights and expectations of both parties during life and at death. A valid will or inter vivos trust can also be used to provide for a common-law spouse at death. A common-law spouse can also be designated as a beneficiary under a life insurance policy or a retirement savings plan. These arrangements should be reviewed and updated every few years, particularly after a significant event such as the birth of a child. An estate plan should also be updated if common-law spouses decide to marry.
It is critical for common-law spouses to communicate with each other about their expectations during the relationship and at death. Couples should also be careful to document their intentions in writing. This can help to protect the financial interests of the surviving spouse, should any disagreements arise after death. Consulting a lawyer can help common-law spouses understand what legal entitlements and obligations they may owe to each other and clear up any related misconceptions. While common-law spouses do not have the same automatic rights as married couples, there are several tools that they can use to create an estate plan that is most appropriate for their particular situation and to prevent unintended results following the death of either spouse.
Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.
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