Separating Common Law Spouses – What happens to Property

Carolyn Shelley
Posted May 19, 2015 Category: Individuals/Families
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The law in Ontario is clear on how married spouses divide and equalize their property in the event of separation and divorce.  What is less clear is what happens to property if you separate after living in a common law relationship.

The starting point at the breakdown of a common law relationship is that each person keeps any assets or debts in his or her name.  There is no legislated obligation on either person to share the value of his or her assets with the other person.

In some circumstances this is appropriate and allows individuals to make a clean break.  However, in other situations, this may produce an unfair result.  This is particularly true for common law relationships where individuals have intermingled finances, have been jointly contributing to property owned in one person’s name alone, and where one person has made sacrifices to allow for the advancement of the other on the understanding that the benefit of those advancements would be shared in the future.

The Supreme Court of Canada has given some guidance to separating common law partners in its decision in Kerr v. Baranow.  The Supreme Court said that if there is a “joint family venture” there should be a fair division of the assets acquired during the relationship.

The question of what qualifies as a “joint family venture” remains somewhat unclear.

In court decisions made after Kerr v. Baranow, judges have tended to award a relatively equal division of assets when there is a long term relationship, especially with children, an intermingling of finances and a demonstrated joint effort to work toward the financial betterment of both parties.  This is particularly so where one party has made personal financial sacrifices to assist the other person in achieving personal financial gains.  In contrast, where the common law relationship was relatively short and the parties maintained separate finances and separate financial goals, the courts were less inclined to award a sharing of one person’s assets with the other.

The difficulty lies in those situations which fall between the two extremes.  Whether or not one person has a right to share in the assets of the other all depends on the facts of your individual relationship.  Your best bet if you are looking to make this kind of claim or you are concerned one might be made against you is to consult with a family law lawyer for an opinion about your likely rights and obligations.

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Carolyn Shelley
Posted May 19, 2015 Category: Individuals/Families

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