I was inspired to write about “Smart Cohabitation” for my website and as a general interest piece. Did you know that Statistics Canada stopped gathering census data on how many people were divorced or common-law in about 2006 or as the lawyer in me would say “adult interdependent partners” (“AIP”)? Yup, all you common-law couples are actually and legally referred to as “AIP” or “AIPS”….it is pronounced as “APE” or “APES” for those who did not follow this joke…like at all.
Statistics Canada stopped because being divorced or being an AIP is the prevalent relationship trend and did not need any further tracking. So how are AIPS handling their family law affairs?
Given the majority of our population are AIPS or divorced….how you cohabit greatly impacts your life and the life of any dependents you may have.
Here are the TOP 5 “SMART COHABITATION” FACTORS:
- MONEY AND DEBT – TALK about money and debt before moving in together or otherwise combining your finances – the hue of new love and the promise of ongoing commitment cannot circumvent the need to talk about money and debt. This should also include showing each other your financial documents regarding assets, investments and debts. The Statistics also show that most AIPs have dependent children from their previous relationship(s) and are legally responsible to financially provide for their dependents. It is also common for spousal support payments (also known as “alimony payments” for those American terminology fans reading this) to be payable by a potential AIP. Talking about money and debt will highlight where a cash crunch may exist or how an ongoing debt payment may affect your household income.
- PRENUPTIAL OR COHABITATION AGREEMENTS – GET IT DONE. Times have changed. When AIPS develop, each partner has lived life, incurred debts, and accumulated assets. Did you know that AIPs and dependents from previous relationships have competing interests in property or inheritances at the time of death? If you do not have a prenuptial or cohabitation agreement, then the inheritances you give in a Will may not be how your estate is ultimately divided. AIPS need to outline what interest each will have in the other’s property or how the other AIP will be provided for in death and in life to avoid misunderstandings with previous dependents. It may also avoid costly litigation, if done correctly. So the money or property in your estate actually goes to who you wish.
Did you know an AIP could be found financially responsible for the other AIP’s children just because he or she helped with the children during their common-law relationship. A crafty lawyer may also use this obligation to lower the biological parent’s financial responsibility for these children. A second chance at love is good but a second chance at love with clear legal obligations and interest is better.
- PARENTING PLANS OR ARRANGEMENTS – if you have children from a previous relationship(s), then you need to review current parenting plans or arrangements to see where your AIP fits in. Preferably before you move in or combine households. Does he or she discipline your children? How do you tell the children you will be common-law partners? How does the other parent support this process? The Family Centre is a non-profit organization that offers courses for “blended families”. It is a cost effective resource that may help this transition. As a Family Lawyer, I see a host of Court applications to change parenting arrangements once a new partner is in the picture or a common-law relationship is contemplated. It is best to be clear and define what the new AIP’s role is to your children.
- RESIDENCE AND RELOCATION – If you have children from a past relationship(s) and combining households with your new AIP means a change in residence, then you need to discuss this as part of parenting arrangements especially if it will affect the other parent’s access time or shared parenting of the children. Both the Family Law Act and the Divorce Act outline notice periods of 90 to 60 days to the other parent, if you intend to move away with the children. Again, talk about it BEFORE purchasing that new home and making arrangements to move etc. If you cannot agree with the other parent, then you must obtain a Court Order allowing you to move with the children. This is called a “mobility application” where you ask the Court to move to a new location that significantly impacts the other parent’s ability to see the children or to keep the current parenting arrangements.
- AIPS AND ASSET ACCUMULATION – There is no law which gives AIPS an automatic and equal interest in assets acquired during their common-law relationship or property shared by the parties during their common-law relationship. This is the main difference between married couples and AIPS. Married couples are deemed to share equally in all property acquired during the marriage and property shared by the parties during marriage subject to some exemptions, as per the Matrimonial Property Act of Alberta.
With AIPS, if the property can be shown as a “joint venture”….so like the property being in the AIPS joint names or other such indication, it is not assumed to be shared at all. In the event that the property is proven to be a “joint venture” then an equal division of the asset’s value is not typically assumed. This causes a lot of issues if the AIPS break up.
For example, one AIP moves into the house of the other AIP and pays utilities or buys groceries or helps to pay property taxes. Upon break up, the AIP who paid towards the other AIP’s house may not be entitled to any equity in the house despite contributing to it.
Or another example, a recreational property is purchased during the course of the common-law relationship by one AIP and it is only in that AIP’s name. The other AIP may have contributed to renovations or upkeep but it is not enough to have an interest in it upon break up.
The best way to avoid these issues is to have a Prenuptial or Cohabitation Agreement done.
Presently in Alberta, there is no legislation governing how assets in common-law relationships should be divided. So we turn to case law to see how the Courts have decided past cases and if your circumstances meet the legal test to share in the asset. Just avoid Court and create a plan for “smart cohabitation”.
Author: Ms. Ning Ramos, Barrister and Solicitor
Ramos Family Law
On October 3 and 10, 2018, I am teaching a course called:
“Post Separation and Divorce: What now?” in Edmonton, Alberta.
The course is offered by Metro Continuing Education at the bargain basement price of $89.00 plus GST.
The course number is 46010056 and you can register online at metrocontinuingeducation.ca or
by calling 1-877-202-2003.
Metro Continuing Education is a non-profit organization and I am donating my time as well as teaching materials. All course proceeds will go directly to Metro Continuing Education. If you are interested in this topic, you may want to register before the spaces fill up.