Common Law Common Sense!

Shacked up? – Know your legal rights!

No – despite what you may have heard, or read,  about last weeks Supreme Court of Canada decision involving common law property rights, the law (at least as I see it) has not been radically changed.

What the Court did was provide some common sense guidance to lower courts, family lawyers and common law couples alike.

First, some background would be helpful. With divorcing married couples there is a legal presumption that all assets and liabilities will be divided 50/50. No such presumption exists for common law couples.  

For common law couples legal relief is based on trust principles, specifically the law of unjust enrichment. In other words if one spouse is “unjustly enriched” due to the contributions, and at the expense of, the other party, a trust claim may provide relief. Contributions can consist of financial contributions, or the assumption of domestic responsibilities.

Other factors identified by the Supreme Court as crucial in identifying “unjust enrichment” include the degree of economic integration. In other words did the parties maintain independent financial lives, or did they integrate their financial affairs.

Also important is the degree to which either party sacrificed their career for the benefit of the family, and the extent to which the parties intended to function, and organized their lives, for a common family purpose.

One potential example of “unjust enrichment” involves a spouse who sacrifices her career for the purpose of raising children, and assumes primary domestic responsibilities, while the other spouse amasses significant business, and personal assets.

Once “unjust enrichment” is determined Courts have the choice of awarding the deprived spouse with an interest in property, or a monetary award.

However, simply because there is a finding of “unjust enrichment” does not  automatically mean that there will be a 50/50 division of assets. Although, I believe it relatively safe to assume, the longer the length of the relationship, the more likely it will result in an equal division of assets.

So if you’re thinking about shacking up, you can’t say you didn’t know what you were getting yourself into!