• When you move in with somebody who's not your spouse, know the legal and financial implications of that decision!
  • Common-law partners do not receive the same protections as married spouses do.
  • Your Last Will & Testament, as well as other tools such as cohabitation agreements and registered investments, can help you ensure that you and your partner are both protected.

You know what’s great about our society right now? The fact that we are working towards a world where people can love whomever they want, can live (or choose not to live) with whomever they want, and have real and true autonomy over their life. 

Our culture is coming to embrace relationships of all kinds. By that, I don’t just mean things like gay marriage. I’m also talking about committed, long-term relationships that don’t involve getting legally married (common-law partnerships being the most common example). 

Don’t get me wrong: we still have a long way to go on this front. But it’s easy to forget that just a few short decades ago, cohabitation and marriage weren’t necessarily available to every couple. The fact that more and more people are getting on board with relationship equality — this idea that we should be able to love and live, and share a life with any person we choose — is a really exciting thing to behold. 

The only problem: we’re still not talking about the legal and financial implications of these relationship decisions. That can create some really sticky situations if one of you should fall ill, pass away suddenly — or even if the two of you just decide to break up. Read on to learn how, and what you can do about it

Chasing the dream

Whether you’re young, single, and starting your career, or you’re long married and working toward your retirement, many of us have a common end goal in mind: a life of domestic bliss. A peaceful life in a home that you love, shared with your significant other — that’s what it’s all about, right? 

A lot of the time, we put all our energy and focus on establishing the kind of life we’ve pictured for ourselves. It’s fun to think about our dreams for the future: finding the perfect partner to settle down with, buying the perfect house together, maybe having (or adopting!) a kid someday. We think a lot less about what we’ll do if things take a turn for the worse, in life or in our relationships. 

For example, what would happen to your home and shared assets if: 

  • Your partner got hit by a bus tomorrow?
  • You found out that you have stage 4 breast cancer? 
  • You and your partner realize that you want different things in life, and you decide to break up?

I know it’s no fun to entertain any of these scenarios. In our culture, most of us are really good at not thinking about all this bad stuff. If there’s no reason to put our mind to it, then why bother, right? 

But I promise you, there is good reason to think about it. Because planning for these situations today is going to be a lot less painful than having to deal with them unexpectedly in the future.

No matter who you are or who you’re with, you should know what it means to enter into a relationship with somebody. Let’s start with common-law relationships.

Common-law partnerships: What you need to know

Living common law means that you are living in a conjugal relationship with a person who is not your married spouse, and at least one of the following applies:

  • This person has been living with you in a conjugal relationship for at least 12 continuous months
  • This person is the parent of your child by birth or adoption
  • This person has custody and control of your child (or had custody and control immediately before the child was 19 years of age) and your child is wholly dependent on them for support

In order to be legally considered common-law partners, you also need to include your partner’s social insurance number when you file your taxes. 

Common-law relationships have become more and more common in Canada, increasing more than 400% (!!) since the 1980s. More and more young people are choosing not to get married, for various reasons. Some figure they’ve already made a commitment to each other, and they don’t need a marriage license to cohabitate, own property, and maybe have children together. 

In principle, that’s totally true! Marriage is not for everybody, and that’s fine. But the thing that no one talks about is the fact that in death, common-law spouses are out of luck

In all of Canada, only one province (shout-out to British Columbia!) recognizes common-law spouses’ rights in death. ☠️  

Here’s what that means: If you were in a common law relationship, and one of you dies without a Last Will & Testament, there is no law in place that protects the surviving partner and guarantees that they will inherit anything from their dead partner’s Estate. No matter if you and your partner were common-law for decades and decades; if they die without a Will, it doesn’t matter. You don’t get anything!

Depending on your province or territory, there are other ways that your rights as a common-law spouse may differ from those of a married partner. For example, in Ontario, common-law partners are able to claim spousal support — but not property.

How to protect yourself (and your common-law partner)

You might be thinking to yourself, “This is totally unfair!” And you’re right — it is unfair

Personally, I have a feeling that this will change in the future. Ontario and the other provinces will someday catch up with the times and follow British Columbia‘s example. But until then, here’s what you and your common-law spouse need to make sure you take care of:

1. Make sure you each have a Last Will & Testament 

This is one of the most straightforward ways to ensure that your common-law partner gets everything you want them to have: name them as a beneficiary in your Will

2. Joint tenants v. Tenants in common 

If you’re buying property with anybody else, it’s important to understand the difference between being joint tenants vs. tenants in common.

Joint tenants each own an undivided interest in the property. That means that instead of parcelling out the property—say, each person owns 50%—you both jointly own the entire thing. Joint tenancy comes with the right of survivorship, which means that if one tenant passes away, the remaining tenant(s) automatically inherit the rights to the property. 

Meanwhile, tenants in common each own a specified percentage of the property. One major reason people might choose this option is if they want to assign different levels of ownership to the property—say, one person owns 80% and the other owns just 20%. But beware: tenants in common do not have the right of survivorship. When one tenant passes away, their share of the property will be dealt with along with the rest of their Estate. 

Which option is right for you? It depends entirely on you and your partner’s unique situation. Just make sure you understand the implications of each option, and ideally, consult a professional before making a decision. 

3. Life insurance and registered investments (ex. TFSA, RRSP, etc). 

Registered investments and life insurance policies have named beneficiaries. This means that the income from these investments bypasses the Estate when someone dies. The beneficiaries who are named then receive the money in the insurance policy or investment shortly after the person dies. That means they don’t have to wait for the administration of the Estate

You can name anyone as a beneficiary, regardless of your relationship with them. So this is a great way to ensure that money will make it to your common-law spouse fast

Together forever… 

Cohabitation—whether with a spouse, with a common-law partner, with family, or even with a platonic friend—comes with ups and downs. It’s wonderful that we’re moving toward a future where all kinds of living arrangements, romantic and otherwise, are accepted. 

But no matter what option you choose for yourself, understand what you’re getting yourself into when you decide to share your life with somebody (especially if you’re purchasing property with them). As with everything in life, plan for the worst and hope for the best.

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About the Author

Mallory McGrath is the Founder & CEO of Viive Planning. Mallory is a wife, daughter, mother, sister, and friend. She advocates for Aging & End of Life Planning to help families to create open lines of communication and avoid tensions as they all continue on their journeys through life.

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