1. Definition of Common Law Relationships
There is no universal definition of a common law relationship. Federal and provincial legislation use differing criteria to define common law relationships. For example, Ontario’s Family Law Act, defines common law relationships as one where parties reside together for at least three years or where parties are in a relationship of some permanence and have a child. Whereas, under the Income Tax Act, a common law relationship is defined as one where parties are in a conjugal relationship and living together for at least twelve continuous months.
2. Spousal Support
Common law spouses, like married spouses may be entitled to receive spousal support upon separation under Ontario’s Family Law Act. Once an entitlement to spousal support is established, the quantum and duration of spousal support is calculated based on the Spousal Support Advisory Guidelines.
These guidelines determine the quantum and duration of support based on spousal incomes, the length of cohabitation, the ages of the spouses and the residency and ages of the children (if any). The Spousal Support Advisory Guidelines provide three ranges of spousal support: low, mid-range and high. Generally, the high range is applied in long-term relationships, where is a large discrepancy in incomes and where there are children involved. Whereas the low range usually applies in short-term relationships where there is a smaller difference in income and where there are no children.
3. Property Rights
Common law spouses do not have the same automatic property rights as married spouses upon separation. Under the Family Law Act, only married spouses benefit from an equalization of net family property after separation. Common law spouses do not have an equal right to live in the family home after separation, unless they are both owners. At separation, common law spouses are entitled to the property they brought into the relationship and acquired during the relationship. The only property and assets common law spouses have to share upon separation are the property and assets they own together. Common law spouses can make a trust claim or joint family venture claim if they made direct and indirect contributions to their spouse’s property.
Common law spouses have no property rights regarding their spouse’s estate, if their spouse dies without a will. However, common law spouses can seek dependent’s relief from their spouse’s estate. Common law spouses do have rights to their spouse’s CPP pension and OAS benefits. After separation, common law spouses may be able to divide the CPP contributions they made during their relationship equally.
4. Cohabitation Agreements
Cohabitation agreements are a recognized form of domestic contract recognized under the Family Law Act. Similar to a marriage contract, cohabitation agreements are for couples who plan to live together or who already live together. Cohabitation agreements can determine ownership of property and assets bought during the relationship, determine if and how much spousal support will be paid after separation and determine which party must leave the family home after separation.
A cohabitation agreement will automatically become a marriage contract if common-law spouses later marry. A cohabitation agreement cannot determine who has custody of or access to the children after separation.