Increasingly in Canada, people under 50 are delaying or abandoning the idea of a traditional marriage. While this may be the right choice for personal, financial or religious reasons, for a couple, it can come with unintended and serious consequences for those unaware of the property sharing rules related to marriage and death in Ontario.
The Succession Law Reform Act governs and informs what happens to someone’s property when they die without a will; this is called dying intestate, or an intestacy. Normally with an intestacy, assets transfer to the person’s spouse, or they are split between the spouse and any children the deceased may have. If there is no spouse but children, assets transfer to the children, or if there is no spouse or children, the assets then transfer to close blood relatives like parents and siblings.
One important aspect to this legal regime is how “spouse” is defined. Rather than having a definition specific to the act, it simply says: ““spouse”, except in Part V, has the same meaning as in section 1 of the Family Law Act. “Spouse” in Section 1 of the Family Law Act is defined in a very narrow way where a spouse is limited to “either of two persons who (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.” To put this in plain language, if a person dies without a will, the definition of “spouse” does not include common law spouses or long-term romantic partners.
Due to this narrow definition, when someone in a common law marriage dies without a will, they are considered to have also died without a spouse. Notably this definition is also limited to two people so polyamorous relationships with only one, or no legal marriages will be subject to the same folly.
Why does this matter?
Allowing for an intestacy in a common law couple, or long-term cohabiting couple can cause fairly extreme and negative results. For example, if a long-term childfree cohabiting couple live in a house brought into the relationship by Person One and Person Two is not on title for the home, and if Person One were to die suddenly and unexpectedly, Person Two would not have a right to the home, even if Person Two had been living there for years.
Instead, the right of ownership for the house would transfer to the parents or siblings of Person One. Person Two would have to retain a lawyer and bring an application for Spousal Support or Unjust Enrichment and attempt to fight for either the house or a portion of the proceeds of its sale. It is important to note however that both of these options are only available under a fairly limited number of specific circumstances and many common law spouses will not qualify for this relief.
The same would follow for registered plans (TFSA, RRSP) to which Person Two was not listed as an automatic beneficiary, and bank or investment accounts held solely by Person One.
As one may imagine aside from dealing with the grief and trauma of the sudden loss of Person One, Person Two is now also faced with the loss of their home, the benefit of a dual income household, and the prospect of costly and time-consuming Court proceedings.
How can you protect against this?
The best way to protect the interests of your common law partner or long term significant other upon your death is to have a will drafted by an attorney. This will allow you to either name them specifically as the beneficiary of your property, or to define spouse in your own will in a way that includes common law, and long-term partners as beneficiaries under the term “spouse.”
For more information contact the Wills and Estates Lawyers at Lamont Law
