New Calgary Common Law Marriage Property Rights December 1, 2019 update. Significant changes to the rights common-law couples have to the division of common Calgary family property on separation are about to take effect in Alberta. Many common-law couples in Alberta are under the mistaken idea that they currently have the same rights to property on separation as married couples – unfortunately, this is not correct! Currently, in Alberta, common-law couples have no automatic (ie. legislative or statutory) right to divide their common property on separation [as married couples do under the current Alberta Matrimonial Property Act (MPA)] as the MPA only applies to married couples. Instead, common-law couples have had to rely on the very complex legal concepts of constructive trust / unjust enrichment/quantum meruit / joint family venture to bring an (often) expensive and unpredictable court case to determine their respective share of family property on separation. But this is all about to change in Alberta. In today’s blog on new Calgary Common Law Marriage Property Rights, one of our savvy senior Calgary family property lawyers, Peter Graburn expands upon his earlier articles on this crucial topic.
New Calgary Common Law Property Rights – Alberta Family Property Act 1 877 602 9900
As we previously advised “New Calgary Common Law Property Rights”, on January 1, 2020, the Matrimonial Property Act will be replaced with the new Alberta Family Property Act which (among other changes) extends the statutory property rights on separation currently granted only to married Alberta couples under the MPA to Alberta common-law couples (as currently exists in other Western provinces, including B.C., Saskatchewan and Manitoba). But how will this work? Who will this apply to? What are these new Calgary Common Law Marriage Property Rights? Here is the official government summary.
Calgary Family Property Lawyers 1 877 602 9900
Who is included?
The new Family Property Act (and the property division rights on separation granted under it) applies to:
- married “spouses”, and;
- “Adult Interdependent Partners” (AIPs) – in Alberta, common-law couples are legally referred to as Adult Interdependent Partners (AIPs) under the Alberta Adult Interdependent Relationships Act (AIRA). The new Family Property Act uses the definition of AIPs from the existing AIRA [s. 3(1)], including unmarried couples who are currently living together in a relationship (whether romantic or not) of economic interdependence and have done so for:
- a continuous period of at least 3 years;
- of some permanence (less than 3 years) if there is a child of the relationship, or;
- have entered into a written AIP Agreement.
Who is NOT included? 1 877 602 9900
However, there are issues as to how far back these new property rights can apply to former AIPs (former common-law partners). Accordingly, the new Family Property Act [s.39(5)] specifically sets out that these new property rights do not apply to people who are/were:
- living separate and apart before January 1, 2020, or were;
- “Former Adult Interdependent Partners” before January 1, 2020 – the new Family Property Act does not adopt the definition of “Former Adult Interdependent Partners” from the existing AIRA (used to define AIPs for financial support purposes), but instead includes a new definition of “Former Adult Interdependent Partners” [at para. 1.1(1)] to describe those who will not be eligible to claim the property rights granted under the new Family Property Act, including those Adult Interdependent Partners (AIPs) who have:
- entered into a written agreement ending that AIP relationship;
- lived separate and apart for more than one year;
- (one of the AIPs has) married a third party;
- entered into a written AIP Agreement, or:
- obtained a declaration of irreconcilability under the Family Law Act.
New Calgary Common Law Property Rights What does this all Mean?
The former Matrimonial Property Act provided that married couples divided their joint property equitably (usually equally) upon separation – the new Family Property Act extends this right to AIPs. Accordingly, under the new Family Property Act:
- both married couples and AIPs (common-law partners) will be able to divide their common property (acquired after the start of their relationship) equally upon the breakdown of their relationship;
- AIPs will be able to divide their common property until they become Former AIPs (usually a year after separation);
- AIPs will have 2 years from the date their partnership ends (or should have known it ended) to claim property division, and;
- both married couples and AIPs will continue to be able to opt-out of the legislation by agreement (ie. Cohabitation, Prenuptial and Marriage Agreements) provided they are in writing with Independent Legal Advice (ILA) from separate lawyers, etc.
New Calgary Common Law Property Rights Are Game-changing
As previously indicated, the changes to property rights granted to common-law (AIP) partners in Alberta under the new Family Property Act are significant. Previously, the government took the position that common-law couples made a conscious decision not to legally marry, and determined that (division of) property rights granted by government legislation should reflect that decision and difference. As of January 1, 2020, this (often false) distinction no longer applies as a result of the new Calgary Common Law Marriage Property Rights.
Furthermore, the previous legal doctrine (constructive trust, unjust enrichment, etc.) common-law couples had to pursue a division of their common property was costly and largely unpredictable and sometimes led to inconsistent and inequitable court decisions. While this court process is still open to AIPs who do not qualify for property division under the new Family Property Act, the new Act will clarify the rights of (and significantly reduce the need for litigation for) those former common-law couples to whom the new Act applies.
Cohabitation Agreements More Important Than Ever
As previously stated, the changes to the division of common-law property rights in Alberta brought about by the passage of the new Family Property Act highlight the importance of agreeing with your current or future partner about how your property will be divided upon the unfortunate breakdown of that partnership. Cohabitation, Prenuptial and Marriage Contracts allow the partners to draft their agreement to structure the division of their property (as well as other considerations, including children and financial support) the way they want rather than follow the changing government created rules for such division of property.
Calgary Common Law Rights lawyers assist their clients to understand the changes the new Alberta Family Property Act brings to common-law property division on separation, and assist them to clarify and enforce those rights either by agreement between the parties or through the court process. Meet with us to learn more about the new exemption rules and issues associated with determining dates of cohabitation and valuing exemptions under the new Family Property Act, including jurisprudence on establishing interdependency that may impact the interpretation of the new legislation.
If you have a question concerning the new Calgary Common Law Marriage Property Rights contact us now before the rules take effect. Click here to meet with us in Calgary.