Couples should protect themselves when entering into any union

By Tony Poland, LegalMatters Staff • Divorce rates in Canada are the lowest they have been in 50 years but that optimistic news doesn’t mean couples starting out shouldn’t do all they can to legally protect themselves, especially those considering a common-law union, says Toronto family lawyer A. Julia P. Tremain.

A Vanier Institute of the Family study released earlier this year found divorce rates have been falling since the 1990s and are the lowest they have been in 50 years. 

At the same time, the report found that marriage has become less common in this country. In 2021, more than four in 10 (44.3 per cent) were married, down from 54.1 per cent from three decades earlier.

Instead, far more couples are choosing to live together outside of marriage compared to previous generations.

No single explanation for the decline

“There is no single explanation for the decline in the proportion of couples getting married,” the institute states. “The increasing preference among young adults for common-law unions over marriage, population aging, the declining influence of religion in society and the rising age at marriage have all contributed to this trend.”

Tremain, a partner with Waddell Phillips Professional Corporation, says some of the findings should be of particular interest to those who eschew marriage and instead decide to live together.

For instance, many embarking on a common-law relationship assume that they have the same legal rights as married couples. But that is not necessarily the case.

“While Canadian law has increasingly treated both couple types the same, their rights and obligations, as well as the definition of ‘common-law,’ vary across provinces and territories,” according to the institute. “For example, married people are eligible for spousal support, division of property in the case of separation and divorce … but the portrait is far more complex for people in common-law relationships.

No legal obligation to divide property

“If a common-law couple separates in Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador or Yukon, there is no legal obligation for the partners to divide their property as a married couple.”

Tremain says under the Ontario Family Law Act, matrimonial property rights that exist when you are married do not apply to those living common law.

“People who are living together and thinking it is the same thing as being married can run into problems in the future if the relationship breaks down,” she tells LegalMattersCanada.ca. “Many people in this situation are surprised to discover this.”

• Nesting can help children deal with a changing family dynamic
• Grandparents don’t have automatic right of access to grandchildren
• Pets should be treated as family members instead of mere property

Because people who decide to start living together are typically “in the blush of love,” they often don’t turn their minds to what will happen if the relationship sours, Tremain says.

“Many times, people don’t think about the possibility of a breakup,” she says. “They don’t turn their minds to who actually owns what and what would happen not just if the union ends, but what would happen if their partner predeceases them.”

‘No such thing as net family property’

Tremain says while someone could make a claim for spousal support when a common-law relationship ends, there is “no such thing as net family property” for Ontario couples living together outside of marriage.

“If you are common law, no matter how long you are together, you wouldn’t have any entitlement to the other person’s pension, for example. You wouldn’t have any entitlement to the increased value of any investment that the other person might have,” she says. “Basically, when it comes to property, whatever you own is yours and whatever the other person owns is theirs and it stays separate. Unless you own property jointly, there is no right to any equalization payment for any net family property that might increase in value.”

Tremain says young couples starting out may not own property, they could be working part-time and there aren’t many assets to consider.

“When you are young you are less likely to have any issues to worry about,” she says. “But as you get older, you might get that big work promotion, you start contributing to a pension and you begin to acquire assets.”

Some people prefer to keep their property separate, whether they are getting married or living common-law, Tremain says.

‘You should put it in writing’

“Many people enter into a relationship with the attitude that ‘What is mine is mine’ and that is their prerogative. But to protect yourself, you should put it in writing, no matter if it is a prenuptial agreement or domestic contract,” she says. “If you don’t know what your rights and obligations are, you can run into trouble.”

Without a legally binding agreement, couples could find themselves going to court to fight for a share of the property they assumed they were entitled to, Tremain says.

She says no matter the strength of the relationship, couples should consider a prenup or domestic contract.

“These agreements can also be updated as situations change,” Tremain says. “Sometimes, for instance, a couple will buy a house together. But one person’s parents are giving them the down payment. In that case, the couple could modify their agreement to have a stipulation stating if the house gets sold, the parents get their down payment back.”

“It is impossible to predict the future but it is wise to take precautions even if you believe your relationship will endure.”