Thursday 23 April 2020

What’s in a Name? Amendments to Alberta’s Family Property Act

by the McLennan Ross Wills & Estates Team


While the world seems to have been turned on its head these last few months as we all adjust to the “new normal” necessitated by the worldwide COVID-19 pandemic, there have been some non-Coronavirus related changes made to the way property division for non-married couples is legislated in Alberta that are worth noting.

Legislative Changes


The legislative framework for the way in which property division occurs upon the breakdown of a relationship for non-married couples in Alberta has changed drastically. In December 2018, royal assent was granted in the provincial legislature to Bill 28, the Family Statutes Amendment Act¸ 2018, SA 2018, c 18 (“FSAA”). This Act set out significant amendments to Alberta’s Matrimonial Property Act, the act that governed property division of married couples upon breakdown of the marriage. As of January 1, 2020, the FSAA renamed the Matrimonial Property Act to the Family Property Act (“FPA”). The name change is significant as it signals a broader application of the legislation to not only the property division of married couples, but to non-married, adult interdependent partners as well. The FPA now provides for adult interdependent partners to make a claim for property division within 2 years from the date the party applying knew or ought to have known the relationship had ended. The implications for this legislative change are potentially quite far-reaching, as more and more couples either remain in adult interdependent relationships without getting married or live together for a significant period of time before getting legally married.

Furthermore, the FPA may prove to create more confusion than clarity, as it applies not only to property division for adult interdependent relationships, but also for married spouses, including any time they lived together in a relationship of interdependence before they were married. Determining the exact date of cohabitation for adult interdependent relationships, or married couples for the relevant cohabitation period before marriage, for the purposes of division of property will likely prove to be a difficult and nebulous exercise in many cases.

Defining Adult Interdependent Relationships


Part of the impetus behind the amendments to the FPA was to help those in committed relationships outside of traditional marriage to divide their property. The amendments now provide adult interdependent partners (“AIPs”) with the same property division rights and rules as married couples.

An AIP is defined in Alberta’s Adult Interdependent Relationships Act, SA 2002, c A-4.5 (“AIRA”) as two individuals who live together in a relationship of interdependence:
  • for a continuous period of at least 3 years;
  • of some permanence (and less than 3 years) if the couple has a child together, or
  • who have entered into an adult interdependent partner agreement.

While many use the colloquial term “common law” interchangeably with AIPs, the two terms do not bear the same legal meaning and implications. The AIRA specifically uses the terms “adult interdependent partner” or “adult interdependent relationship” to describe a non-married couple who are in a relationship with the above attributes. Common law is a not a term legally employed in Alberta, and furthermore, can actually have an entirely different legal meaning than AIPs. For instance, in the federal Income Tax Act, if two people live together for a period of 1 year (as opposed to 3 years under the AIRA), they are considered common law partners for income tax purposes

The AIRA sets out the following factors to consider when determining whether two people function as an “economic and domestic unit” such that they can be considered AIPs. These factors include:
  • the exclusivity of the relationship;
  • how they behave when it comes to household activities and living arrangements;
  • how they represent themselves to others as an economic and domestic unit;
  • the contributions they make to each other or their mutual well-being;
  • the degree of financial dependence or interdependence between them;
  • the care and support of children, if any; and
  • the ownership and use of property.

AIPs can still dictate the terms of their own property division to be different from the default property division rules set out in the FPA by entering into a Cohabitation Agreement, which sets out the cohabiting parties’ obligations to each other, such as their roles in the relationship, any child support or child custody issues, property division, mortgage or rent payments, and life insurance policy designations.

Unlike a marriage, there are no formal proceedings akin to a divorce that terminate an adult interdependent relationship. Instead, the relationship ends upon the occurrence of any one of the following:
  • The partners live separate and apart for one year;
  • The partners marry each other, or one of the partners marries or enters into an adult interdependent relationship with a third party;
  • The partners sign a written agreement stating that they intend to live separate and apart without the possibility of reconciliation.

For all intents and purposes, the changes to the FPA have made AIPs and married couples effectively the same with respect to property rights and protections upon dissolution of the relationship. The only property right that remains solely available to married couples are dower rights, which protect the spouse of a registered owner of real property. These amendments to the FPA therefore necessitate serious consideration about your rights upon breakdown of an adult interdependent relationship, as it will now effectively be treated the same as a divorce in terms of division of property.

Estate Planning Considerations


The significance of a couple being recognized as AIPs is the rights, benefits and responsibilities that arise from a legal perspective. Those rights, benefits and responsibilities are now nearly indistinguishable from those of married couples. It is therefore important to appreciate your rights, and conversely your partner’s rights, upon breakdown of an adult interdependent relationship. This is critical not only during one’s lifetime, but also an important consideration in estate planning.

Increasingly, individuals enter into successive adult interdependent relationships and/or marriages. It is important to appreciate with the amendments to the FPA the heightened rights and protections an AIP has, and what they may be entitled to when you die, or alternatively, what you may be entitled to as the AIP of a person who has deceased.

A surviving AIP is a “family member” of the deceased for the purposes of family maintenance and support claims under the Wills and Succession Act, SA 2010, c W-12.2,  meaning that a surviving partner can apply for maintenance and support from the estate if the deceased does not make adequate provisions for them in the Will or on intestacy. If you leave a surviving AIP inadequately provided for, this can have serious consequences for other individuals, such as children or other partners, whom you intend to provide for in your Will.

Surviving AIPs are afforded a whole host of other rights and protections akin to married spouses upon death of the other partner in the adult interdependent relationship. For instance, the AIRA has amended the Insurance Act to allow for a person to insure the life of an AIP. There are also rules which allow for an AIP to receive certain insurance benefits under the law. The law for Assured Incomes for Severely Handicapped (“AISH”) now provides benefits to the co-habituating partner of an AISH-eligible person, which includes AIPs. There are also benefits to AIPs under the Workers Compensation Act where payments available to the victim, in the event of death, can be payable to the victim’s AIP. These other benefits afforded by the above-noted legislation are independent of the FPA and many were in place before the FPA came into being.

If you have questions about how these legislative changes might affect you and your estate planning, please contact one of the members of our Estates, Trusts, and Tax practice group.

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