Wednesday, 28 November 2012

Common Law Relationships -- Family Law Information

Am I in a Common Law relationship?  If so, so what?!



What does "Common Law" mean in the Family Law context?

A lot of people consider themselves to be in a common law relationship, but what does that mean?  How long does it take to be considered to be in a common law relationship?  If I am in one, what rights and obligations do I have to my partner?

The term "common law" has a very different meaning depending on whom you ask and in what context.  If you ask the Canada Revenue Agency you will get one answer, if you ask your insurance company you will get another and if you ask the Alberta government you will get a third answer.  There is no uniform definition of common law in Canada.  Hence the confusion.

Basically everyone seems to understand that to be "common law" you have to be in a marriage-like relationship, as opposed to be living together with a roommate or family member.  You have to be a couple, right?  What does that mean? 

There are two definitions that are most common: one for federal tax law and one for area regulated by the Alberta government.

For the Canada Revenue Agency, you have to be living together for one (1) year in a conjugal or have a child together.  Here is its definition:

Common-law partner

 This applies to a person who is not your spouse (spouse = legally married), with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:


a) has been living with you in a conjugal relationship for at least 12 continuous months;

b) is the parent of your child by birth or adoption; or

c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.
In addition, an individual immediately becomes your common-law partner if you previously lived together in a conjugal relationship for at least 12 continuous months and you have resumed living together in such a relationship. Under proposed changes, this condition will no longer exist. The effect of this proposed change is that a person (other than a person described in b) or c)) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Note

 The term "12 continuous months" in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship. For instance, if you and your spouse or common-law partner were separated for two months during the year, but reconciled before the end of the year, you are still considered to be married or living common-law for income tax purposes.

This is a very important definition when dealing with anything under the Federal Government of Canada and, in particular, your taxes.  There is nothing more important that the federal government does in relation to its citizens than collect and spend taxes.  On a day-to-day basis, it is the most common interaction between citizen and federal government. 

One needs to be accurate in declaring your status to the federal government.  First, nobody should ever lie to CRA.  Lying to the CRA is an offence that you have serious consequences.

Second, it is normally in most people's best interests to tell the truth.  One probably gets more benefits from being in a common law relationship than cost.  For example, if your partner dies then you can "roll-over" his or her RRSPs into your name without having to pay the deferred taxes on that income.  If you leave your RRSPs to a "friend" or your child then all the deferred taxes have to be paid upon death.  This can be a massive tax bill for all the people diligently maxing out their RRSPs. 


The Alberta Government has a completely different definition and, in fact, does not even use the words "common law".  The Alberta government uses the terms "Adult Interdependent Partners (AIP)" or "Adult Interdependent Relationship (AIR)".  It is basically the same thing with a longer title.  I suspect that the person who used to work for the Yellow Pages thinking up category names now works for government of Alberta thinking up names for legislation. 

To be considered an Adult Interdependent Partner (a common law couple) for any areas regulated by the provincial government, people have to have lived together for three (3) years or have a child together.  The Definition: 

In this Act,

(a) “adult interdependent partner” means an adult interdependent partner within the meaning of section 3, but does not include a former adult interdependent partner;

(b) “adult interdependent partner agreement” means an agreement referred to in section 7;

(c) “adult interdependent relationship” means the relationship between 2 persons who are adult interdependent partners of each other;

(d) “former adult interdependent partner” means a former adult interdependent partner within the meaning of section 10;

(e) “Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

(f) “relationship of interdependence” means a relationship outside marriage in which any 2 persons

(i) share one another’s lives,

(ii) are emotionally committed to one another, and

(iii) function as an economic and domestic unit;

(g) “spouse”means the husband or wife of a married person.

(2) In determining whether 2 persons function as an economic and domestic unit for the purposes of subsection (1)(f)(iii), all the circumstances of the relationship must be taken into account, including such of the following matters as may be relevant:

(a) whether or not the persons have a conjugal relationship;

 (b) the degree of exclusivity of the relationship;

 (c) the conduct and habits of the persons in respect of household activities and living arrangements;

 (d) the degree to which the persons hold themselves out to others as an economic and domestic unit;

 (e) the degree to which the persons formalize their legal obligations, intentions and responsibilities toward one another;

 (f) the extent to which direct and indirect contributions have been made by either person to the other or to their mutual well‑being;

 (g) the degree of financial dependence or interdependence and any arrangements for financial support between the persons;

 (h) the care and support of children;

 (i) the ownership, use and acquisition of property.

Application of Act

2 This Act applies to adult interdependent relationships arising before or after this Act comes into force.

Adult interdependent partner

3(1) Subject to subsection (2), a person is the adult interdependent partner of another person if

(a) the person has lived with the other person in a relationship of interdependence

(i) for a continuous period of not less than 3 years, or
(ii) of some permanence, if there is a child of the relationship by birth or adoption,
or
(b) the person has entered into an adult interdependent partner agreement with the other person under section 7.

(2) Persons who are related to each other by blood or adoption may only become adult interdependent partners of each other by entering into an adult interdependent partner agreement under section 7.

Relationship of interdependence

4(1) A relationship of interdependence may exist between 2 persons who are related to each other by blood or adoption except where one of the persons is a minor.

(2) A relationship of interdependence does not exist between 2 persons where one of the persons provides the other with domestic support and personal care for a fee or other consideration or on behalf of another person or organization, including a government.

Hows that for a short simple definition!

Next to taxes, this definition will affect the most people most often, assuming you live in Alberta of course.  The provincial government regulates far more of our lives than does the federal government.  For example, if two people are AIPs then they have significant rights and obligations under the Family Law Act and the Wills and Succession Act.  These two pieces of provincial legislation potentially affect all of our lives.  They regulate rights and obligations in common law and married relationships upon break-up and rights and obligations upon death.

For example, the FLA defines when and how much spousal support is paid by common law couples when they split up.  The WSA speaks to the right upon death and the obligations to your partner upon death.  Most people will live in a relationship covered by the FLA at some point in their life and all people will die at some point.  As Ben Franklin stated there are only two certain things in life: death and taxes.  At some point in time, people living together are going to have to deal with these definitions.  It is inevitable.

There is one area that is not covered by legislation or these definitions: property ownership amongst common law couples.  All married person fall under the Matrimonial Property Act.  There is no similar or analogous legislation for common law couples.  In other words, there is no specific government regulation of what happens to property when common law couples get together or breakup.  This area of the law is still regulated by the Laws of Equity and/or the Laws of Contract (which to confuse things even more -- is the "common law" -- not the common law applying to unmarried couple in a relationship but the general body of case law the has accumulated in Canada and other countries following that system of law -- These are the laws found in the accumulation of case law).  It is specifically called "constructive trust" or "resulting trust" or "unjust enrichment" law.  All terms are correct depending on the context.  How long does have to live together for these principles to apply?  There is no set time.  Rights and obligation can be in place when it is "just and equitable to do so".

Private Definitions

The above speak to government definitions.  Your insurance company, for example, may have a completely different definition to determine when your partner can get access to your dental plan.  There is not set time or definition.  One would need to ask their insurance provider or employer.

No comments:

Post a Comment