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21

Common law marriage in ontario

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Common Law Marriage (Ontario)

As I just blogged about (see previous blog post), there is a big misconception that cohabiting couples either have the same rights and obligations as married spouses (which they don’t) or don’t have any rights at all (which they do / can have) when it comes to things like support, ownership and division of property, and estate entitlements.

But this is not true. Cohabiting couples often don’t know what their rights and obligations are with respect to these things.  The law does have a default position, but that position can be changed if the parties enter into what’s called a Cohabitation Agreement.  A Cohabitation Agreement is a private domestic contract for non-married adults who are cohabiting together.  This is typically referred to as them being in a common law marriage.  So here are some basic things that the law says about being in a common law relationship in Ontario:

  1. Ownership and Division of Property. Unlike married spouses, cohabiting spouses do not have a right to half of the net accumulation of the couple’s wealth during the course of their cohabitation.  Don’t believe me? Just check out Ontario’s Family Law Act, which has no provision for the division of “net family property” for cohabiting couples (although it does for married couples). This is generally the case with married spouses, but not cohabiting couples.  Cohabiting couples own property based on legal principles of ownership – namely, who paid for the thing and who controls / possesses the thing. If the parties want to change this around, they can have a Cohabitation Agreement that says that a particular item or property is owned by both couples (either equally or unequally).  If the parties want to be very clear that none of their property is to be owned by the other common law spouse, then they can have a Cohabitation Agreement that clarifies this as well.  Now, importantly, a cohabiting spouse may claim they have an interest in the other’s property on the basis of unjust enrichment (which is discussed below).  To avoid these types of claims, the parties can waive their rights to unjust enrichment in the Cohabitation Agreement.
  2. Support – often referred to as Spousal Support, Maintenance or Alimony (in the U.S.) is an obligation of one person to pay money (to the extent that they can) to the other common law spouse (to the extent of their need).  Support obligations arise from the Family Law Act for cohabiting couples (i.e. generally couples who have been in a conjugal relationship for at least 3 years).  Again, the parties can waive their rights to Support (so that the other party won’t have to pay in case of a termination of the relationship) in the Cohabitation Agreement.
  3. Possession of the Home.  Did you know that married spouses have an automatic right to possess (i.e. stay in) the matrimonial home?  Well, that’s NOT also the case with cohabiting couples who DO NOT own the home that they are living in.  Indeed, if they are staying there as a common law spouse and have no ownership interest in the home, then they can be asked to leave (assuming they are not a tenant, which is generally not the case).  For cohabiting couples, if only one party owns the home, then that party can include provisions in a Cohabitation Agreement that requires the other party to leave after being provided with notice.
  4. Unjust Enrichment.  What if one party contributed (through their domestic work effort) to the other party acquiring or maintaining or improving the value of an asset?  Well, that party – even if they do not have an ownership interest in that property because they never paid for it or received it as a gift or inheritance – may STILL have an ownership interest on the basis of the doctrine of unjust enrichment.  Unjust enrichment is basically a judge made law that says that if one person is deprived and another person receives a corresponding benefit and there is no juristic reason this enrichment, then the person who was deprived may ask the court to be provided with an interest in that property.  Again, these types of claims can be avoided through a Cohabitation Agreement.
  5. Estate Entitlements.  Ok, we are really talking here about what a person’s Will says, what happens if a cohabiting spouse does not have a Will and dies (i.e. your common law spouse dies intestate), and what happens if if your cohabiting spouse dies and leaves you nothing or not enough or you to be adequately provided for.  What are the rights of a common law spouse in these situations?  Well, if your common law spouse has a Will and it says that you get nothing, then the starting position is that you get nothing.  This is different from married spouses, who can elect to get half of the net family property (under family law) instead of getting what their entitled to under the Will (in this case, nothing).  Now I say “starting position” because, under the Succession Law Reform Act, a cohabiting souse can apply to the court for adequate provision to be made to them if they were a “dependant” of the deceased’s prior to death.  If they can prove that the deceased was under a legal obligation to provide them with support at the time of death, then the court may order a payment (lump sum or periodic) to be paid or property to be transferred to the surviving spouse.  Again, this can be avoided through a Cohabitation Agreement.  Finally, if there is no Will, then the starting point is that the surviving common law spouse will be entitled to nothing under the distribution regime of the Succession Law Reform Act.  Once again, however, that person can apply to a payment or transfer of property from the deceased’s estate if they were a dependant of the deceased at the time of death.

So you see, there are lots of ways in which Common Law or Cohabiting Spouses in Ontario are treated differently from married spouses – particularly when it comes to things like Ownership and Division of Property, Support, and Estate Entitlements.  It’s much harder for them to show that they have an interest in property or estate entitlements if they are excluded from a Will.  So if the parties want to change these default rules, they can do so by creating a Cohabitation Agreement.

Create your Own Cohabitation Agreement

A Cohabitation Agreement is a domestic agreement between non-married adults who want to either avoid or create financial obligations that may arise from their cohabiting or eventual marriage.  Our Cohab-O-Matic is like Turbo-Tax for creating an Ontario Cohabitation Agreement.

You can start the Cohab-O-Matic wizard by click on the “Get Started” button below:

The Cohab-O-Matic is an online questionnaire that takes users through a series of questions about their relationship to ultimately create a custom-tailored cohabitation agreement that is based on the laws of Ontario.  It asks questions related to:

  • The parties
  • The children of the parties
  • Date of cohabitation
  • Support
  • Description of significant financial assets, debts and other liabilities (required for a cohabitation agreement to be valid and enforceable)
  • The home (ownership of the home, home expenses, leaving the home, selling the home, etc.)
  • When the agreement will terminate
  • Whether the agreement will become a marriage contract if and when the parties marry each other
  • Estate entitlements
  • Alternative dispute resolution (e.g. mediation, arbitration, etc.)

As you can see (or perhaps will see), the Cohab-O-Matic is VERY comprehensive and flexible.  Once you’ve completed the online questionnaire, you can proceed to PayPal and then, when you’re done paying, you’ll be able to download your custom-tailored Will.

And here’s some more value that we bring to the table: you can edit your Cohabitation Agreement for a set period of time afterwards for FREE, you can read a comprehensive and regularly updated eBook about Cohabitation Agreements in Ontario (to better understand your legal rights and entitlements and how Cohabitation Agreements work and what they’re all about), and you can read the mandatory signing instructions at the end to make sure that enter into the Cohabitation Agreement properly.

And you can do all of these things by yourself with your spouse without the involvement of a lawyer or having to spend thousands of dollars on legal fees.

written by pmmpa \\ tags: , , , , , , ,

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