Marriage and cohabitation: Property division

In Family Law

When you are involved in a serious relationship with another person, the following questions will often arise:

  • What are my rights and obligations in regard to division of property if I get married and then divorced?
  • What are my rights and obligations in regard to division of property if I separate from another person that I lived with in a marriage-like relationship (cohabitation), even if we were never actually married?

This article is not intended to provide specific legal advice but rather provides a general overview of these legal issues.

 

Rights and Obligations

Whether legally married or cohabiting in a marriagelike relationship (including same-sex couples), the parties involved have legal rights and obligations regarding division of property upon a breakdown of the relationship.

The Family Relations Act is currently the relevant legislation that deals with property division for divorcing couples in BC, but it does not govern property division for cohabiting couples. In the near future, the provisions of the new Family Law Act will take effect in BC and the Family Relations Act will no longer be law. The new Family Law Act will govern division of property for both divorcing couples and separating common law couples.

While some other provinces have implemented similar legislation, this is the first time that principles regarding division of property between common law couples have been codified and treated in the same manner as married couples in BC. The new Family Law Act received royal assent in November 2011 and is expected to take effect in its entirety sometime in 2013.

 

Is an Agreement Necessary?

Historically many people have considered a marriage agreement (otherwise know as a pre-nuptial agreement) prior to marriage, but they may not have considered a similar agreement prior to cohabitation.

Because of the upcoming expected changes in BC’s family law legislation, many people are re-evaluating their current situations and determining that it may be necessary to contemplate an agreement. The following is a list of some of the most common factors that people shot.ld consider when deciding whether or not they need an agreement:

  • What is your age?
  • Are you similar in age to your partner?
  • Are you just starting out in your career?
  • Do you have significant assets in comparison to your partner?
  • Do you have or anticipate significant earnings in comparison to your partner?
  • Do you expect to receive an inheritance or other significant gifts in the future?
  • Do you (and I or your partner) have children?
  • Are you giving up employment or other opportunities for income in order to make this relationship work?

When starting out young at the beginning of their careers, most people do not feel the need for an agreement, assuming that they have not accumulated significant assets and they are in relatively equal financial situations. Of course there are always exceptions based on specific situations.

However, when people are older and have spent years building financial security, it may be wise to consider what they may lose if the relationship ends and they are not protected by an agreement. This may also be the case with people considering a second or third marriage or long-term relationship, or with people who have children for whom they wish to preserve their assets.

Many people at this stage do not want to think about the possibility of their relationship ending at some point in the future. However, if you have concerns about preserving your assets, it is important to think about these considerations before entering the relationship. Be realistic about your expectations. While you may sincerely believe that your relationship will last forever (and it may), think about what may happen if, for some unforeseen reason, it does not.

 

Summary

Each family law case is fact-specific and unique. If you are thinking about marriage or cohabiting with another person in a marriage-like relationship, it may be wise to obtain further legal advice, especially as to how the new Family Law Act may apply to your situation. As the law changes, it is important to make sure that you protect your rights and remain aware of your obligations.

First Published: June, 2012, Business Vancouver Island pg. 25