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BIG CHANGES FOR BC UNMARRIED COUPLES, BC MARRIAGE LIKE RELATIONSHIPS AND BC COMMON LAW SPOUSES COHABITATION AGREEMENTS

IMMEDIATE REPEAL OF SECTION 120.1 OF THE BC FAMILY RELATIONS ACT – WHAT IT MEANS TO UNMARRIED COMMON-LAW COUPLES IN BRITISH COLUMBIA

Our medium to high net worth common law relationship and marriage like relationship and unmarried couples lawyers want potential BC clients to be aware of massive changes to the rules affecting support and property division for unmarried persons.

On November 24, 2011, the BC Family Law Act received Royal Assent and became a new law in British Columbia. While most of the Act does not come into effect for another 12 to 18 months, a few parts became effective immediately and are already having an effect on residents in this province. It is critical unmarried persons be aware of all the rights they now how have under the old and new law as their rights have changed dramatically. Call us at 1 877 602 9900 province wide toll free to obtain an understanding of these critical new laws or email me at lmaclean@macleanlaw.ca.

One of the more interesting decisions made by the legislature was to immediately repeal section 120.1 of the Family Relations Act – a tricky little piece of legislation that until its repeal had been of some concern to family lawyers dealing with cases of unmarried couples and domestic agreements.

In order to understand the impact of the new legislation, one must first consider how property division upon separation works in British Columbia:

Under the old legislation, the Family Relations Act, only married couples have a statutory right to property division. Unmarried couples who separate and claim an interest in a spouse’s property must sue under the more complex laws of trusts. The result is that married spouses are often in a better legal position respecting property than common-law spouses in otherwise similar relationships.

This situation is about to change, as the new Family Law Act extends the same property provisions to married spouses as to unmarried spouses “who have lived in a marriage-like relationship for at least two years.”

It’s important to note that section of the Family Law Act that extends statutory property rights to common law spouses has not yet come into effect, so as of right now most unmarried spouses must still rely on trust law to make property claims.

However, the now-repealed section 120.1 of the Family Relations Act contained an exception to the general rule that unmarried spouses had no statutory right to property: Where an unmarried couple enters into a “marriage agreement” or “separation agreement” that deals with property, they then fall under the same statutory property scheme as married couples.

The effect of section 120.1 was such that some family lawyers advised against unmarried spouses entering into property agreements altogether, unwilling to risk the consequences if the agreement was overturned.

Until the new Family Law Act is fully implemented, what effects will the immediate repeal of s. 120.1 have on Family Law in British Columbia? Will unmarried spouses who want to enter into property agreements see any benefit or disadvantage from doing so now, in the window between the repeal of s. 120.1 and the implementation of the Family Law Act?

The decision of Wiest v. Middelkamp, 2003 BCCA 437, made a few years after section 120.1 was enacted, shows how even seemingly small changes in the law can have unintended consequences. In that case, the Court of Appeal upheld the trial judge’s decision that section 120.1 only applied prospectively, so an unmarried spouse could not take advantage of the property provisions of the Family Relations Act despite having entered into a property agreement.

Wiest highlights how the law that existed at the time an agreement was made is a very important factor in interpreting the agreement. The repeal of section 120.1 before the introduction of the property provisions of the Family Law Act create a state of flux in the law that could have far-reaching consequences.

If you are unmarried and have an agreement with your former spouse that deals with property, it would be prudent to see how your agreement might be affected by the repeal of section 120.1. Since agreements can be very different, there is no “one-size-fits all” answer – only a lawyer reviewing the agreement can tell you how this new legislation may be affected.



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