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Common-Law Spouses and Estate Planning

Common-Law Spouses and Estate Planning

More and more these days, the distinction is becoming increasingly blurred – both societally, and legally – between partners who have formally married each other and those who are living in common-law relationships. This is true in both in family law legislation (which in most cases confers similar benefits on parties to both kinds of relationship), and in Canadian court cases in which judges are asked to examine whether the purported distinction still holds valid in our progressive society.

However, there is at least one legal area in which the distinction remains firmly entrenched in Ontario: Estate law.

More particularly the current law in Ontario dictates that, unlike the situation between legally-married spouses, a surviving common-law spouse does not automatically have rights to a partner’s estate upon that person’s death. Instead (and absent careful Estate-planning measures that make the entitlement clear), that surviving common-law spouse may have to commence a legal action against the deceased partner’s estate.

This litigation will normally involve a claim for “dependant support” under the Succession Law Reform Act, which allows any “dependant” of the deceased to claim support in cases where adequate provision for support has not been made. Common-law spouses qualify as “dependants” for these purposes, and the court has broad power to grant various forms of relief, including the transfer or property or an order allowing the surviving spouse to continue using or occupying property.

In addition to these measures, the surviving common law spouse may also have a right to argue that he or she is entitled to equitable (as opposed to legal) ownership of property. These rights might arise as a result of the principles of unjust enrichment and can include recourse to the concepts of resulting or constructive trusts, for example.

But irrespective of which of these courses of action the surviving spouse might have to be pursued, they can be costly. Moreover, they usually involve unneeded contention and aggravation, particularly at such an emotional time.

This situation relating to Estates is consistent with other Family Law areas as well: As I reported a few months ago in “The Supreme Court of Canada decides that Common-Law Couples who split up deserve their fair share”, http://bit.ly/uxvelS ,the Supreme Court of Canada has recently clarified the law relating to common law relationships and the concept of unjust enrichment, in its single judgment in the cases of Kerr v. Baranow, and Vanasse v. Seguin. Although those were not estate planning cases, the decision confirms the fact that in Canada, common law spouses are still treated differently from a legal standpoint than “formally” married ones, and – when there is no legislation to govern the situation – may have to rely on common-law principles to obtain a fair result.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com