Wednesday, 4 July 2018

Changes in the Wind for Cohabitating Couples

Author: Karen Platten, Q.C.

For many individuals in Alberta, living in a relationship of interdependence (a common law relationship) without the benefit of marriage is a choice. The choice involves the notion that they do not want the legal obligations of marriage, such as division of property, to apply to their relationship.

However, there are changes to legislation being contemplated which would impact those individuals who are in a common law relationship. The Alberta Law Reform Institute ("ALRI") in its report entitled "Property Division for Cohabitants", is reviewing the law in the area of property rights for cohabitating couples and will be forwarding their findings to the provincial government for its own review of the topic.

The ALRI report is based on consultations with individuals who are currently cohabitating as well as with lawyers who practice in the area and other interested individuals. It appears, from the ALRI report, that many cohabitating couples already believe that they fall within the same rules regarding division of property on separation that married couples are subject to. Additionally, the majority of responses to various ALRI surveys, indicate that the public is in favour of having the same or somewhat the same rules that apply to married couples also apply to common law couples.

While common law couples currently have rights to division of property based on rules relating to the doctrine of unjust enrichment, these rules are cumbersome and generally result in unsatisfactory outcomes for both parties. The reform of the law in this area would make it clear for couples from the outset of their relationship as to what their responsibilities and obligations are to their partners.

Couples who do not want to be bound by the new legislation, do have an option. They can contract out of the legislation with a properly crafted agreement which deals with division of property on separation. Similar in nature to a prenuptial agreement, the agreement would determine how property would be divided on separation. Many couples prefer to retain ownership of assets which they brought into the relationship and protect the growth on those assets from division as well.

For anyone interested in reading further on the proposed reforms, we refer you to the ALRI Report for Discussion, September 30, 2017.

In the meantime, if you are in a common law relationship and would like to protect your assets from division with your partner, you should consult with a lawyer who is familiar with cohabitation agreements so that you can remove the possibility of the changes in legislation applying to your relationship.

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