DO THE COMMON-LAW PROPERTY RIGHTS AFFECT ME?
When Did the Laws Change?
On June 30, 2004, the laws regarding common-law couples living in Manitoba changed, requiring two people living common-law to share their property upon break-up of their relationship or upon one of them dying, the same as married couples.
These laws apply when two people have lived together in a conjugal relationship (both opposite and same sex) for a period of at least three years and sometimes, one year if there is a child of the relationship. The time requirement always depends on each statute.
You and your partner can also register your common-law relationship with Vital Statistics and be legally recognized as living common-law immediately, without having to wait the time requirements to have the law apply to you. This process is similar to registering a marriage and a certificate will be issued in your names.
What is the Effect of this Law?
When common-law partners separate, their assets and liabilities shall be calculated, excluding the value of any existing assets that each partner had at the time they entered into cohabitation, to determine what each partner has acquired during the time they were cohabiting. From these two figures it may be determined that one partner owes the other partner an equalization payment.
When one common-law partner dies, the survivor has a right to live in the house owned by the deceased for the rest of the survivor’s life if it was the couple’s Homestead property and to have a share in the deceased’s Estate unless there was an agreement to do otherwise.
How does this Law Affect the Average Person?
There are many common-law couples who assumed that equal property sharing was already the law once they had cohabited for three years and that if they were to separate, they would have a right to share in each other’s net assets accumulated during the duration of the cohabitation. For those couples this legislation enforces what they relied on in planning their financial structuring with their partner.
People live common-law for various reasons, one of which is choosing not to marry so as to be exempt from the property laws for married couples. For example, people going to University may live together to share expenses but, at that time in their life, have no desire to pool their resources or to declare each other as spouse on student loans or for a division of their acquired assets and debts should they go their separate ways in a few years. Some people live common-law but do not want to pool their resources when entering into a relationship later in life where each partner has responsibilities and/or children from previous marriages or relationships. The couples in these two scenarios are subject to the same property laws as married couples unless they have a Cohabitation Agreement.
It is important to note that this legislation applies to couples living together as of June 30, 2004, retroactively to the time the cohabitation started. This means that if you have been living together with your partner for a number of years prior to 2004, with no periods of separation, you will have to equally share the assets that each of you accumulated over the total length of your relationship.
Does this Legislation Affect my Existing Will?
Your current Will may be affected, depending on when you had it drafted and whether it provides for your common-law partner. If you are in a common-law relationship and you have a Will that does not provide for your partner, gift clauses of your Will may be voided if your partner contests the Will on the basis that you did not provide for your partner under the law. It is not uncommon for people in a second relationship, especially with children from previous marriages, to agree that they will not provide for each other in their Wills but rather give their respective Estates to their own children. It is important to discuss such issues with your partner before making your Will to save your Estate the cost of unnecessary litigation due to hurt feelings or misunderstandings, and to put such agreement in writing by way of a Cohabitation Agreement.
Does this Legislation Affect other Property Rights?
Yes. If you are selling a home that is in your name alone but the home is the Homestead of your partner, with whom you have cohabited with for at least three years, then the consent of your common-law partner or a former common-law partner is required to sell that property to the purchaser. If you are unable to get a former common-law partner’s consent, an application to court may be required to waive the consent.
What if My Partner and I Don’t Want to Share our Property?
University students setting up to live together for the first time or a common-law couple already living together may not want to pool their resources during their respective cohabitation. They may not want this legislation to apply to them. In such cases the couple can arrange for a lawyer to prepare a Cohabitation Agreement. A Cohabitation Agreement sets out each of the partner’s decision to keep his/her assets separate and that this legislation will not apply to their assets. Just as a Will allows a person to override Estate distribution legislation, a Cohabitation Agreement between two consenting adults allows them to override the common-law legislation. Consulting a lawyer will ensure your agreement best reflects your particular situation.
If you would like more details or have any questions regarding the preparation of a Cohabitation Agreement, Will or other documents please call our office at 204-239-8710.