In most provinces, if common law couples want the same estate rights as married couples, they had better, as Beyoncé so succinctly belts out, put a ring on it. Those once-entrenched distinctions, however, are slowly being rewritten as governments amend legislation and courts hand down new decisions granting common law couples greater access to property and other assets. “For the most part, common law spouses do not have the same financial or property rights as legally married spouses and, generally, are not considered ‘spouses’ for the purposes of an intestate division of an estate,” says Tamzin Gillis, an associate with McInnes Cooper in Charlottetown.
Indeed, said Geoff Gomery, a lawyer with Nathanson Schachter & Thompson LLP in Vancouver, “one of the features of being married is the presumption of equality. There is no presumption of equality with common law couples. [But] it may come.”
Lawyers are certainly aware of the shifting landscape and its emerging signposts. “I used to say, ‘The good news is you’re common law. [Your partner] doesn’t have a claim against your estate.’ The law has changed,” notes Karin Schwab, an associate with Fraser Milner Casgrain LLP in Edmonton.
One of the most recent cases to have estate lawyers sitting up and reading the fine print is the Supreme Court of Canada’s Kerr v. Baranow decision. While the focus is on division of assets after the breakdown of a common law relationship, it has important ramifications for wills and estate law, especially with respect to constructive trusts and unjust enrichment. “The Kerr decision makes it easier to proceed against an estate,” says Edward Olkovich, a Toronto lawyer and certified specialist in estates and trusts. “Penny-pinching relatives who inherit the estate often want to fight over who paid for the milk, butter, or soy juice for the past 20 years. Before Kerr, they claimed this was owing to the estate to offset any common law claims. Retroactive accounting attempts are now pushed aside. Because of Kerr, the estate must deal with unjust enrichment claims that raise the bar on the debate.”
“The court held that the common use of a fee-for-services basis is not the best method and that judges should be more flexible in their approach,” notes Erin Lepine, a lawyer with Nelligan O’Brien Payne LLP in Ottawa. “In particular, the court held that we should consider the reality of the circumstances between the parties and treat the claimant as a co-venturer, rather than hired help.”
Kerr, she adds, addresses the issue of mutual benefit conferral and when it should be taken into consideration in the context of an unjust enrichment claim. “The court held that this is best left to the defence or remedy stage, with the exception that they may be considered at the juristic reason stage of the analysis, but only insofar as they provide proof of the parties’ reasonable expectations.”
The SCC decision has provided a template or roadmap, says Gomery, co-counsel for the appellant Margaret Kerr. “It’s really a judgment you can read and you know what you’ll have to prove. It’s an effective summary.”
While breaking new ground, the decision was not unanticipated. “The courts are tending more and more to say there is a resulting trust and constructive trust,” notes Charles Wagner, the principal of Wagner Sidlofsky LLP in Toronto. “It’s an area where things are exploding.” For example, in Nowell v. Town Estate, the Ontario Court of Appeal more than a decade ago looked at whether a woman who had a 24-year relationship with a married man was entitled to part of his estate. It determined she was. “The judges felt the mistress should be fully compensated because the estate was unjustly enriched,” Wagner wrote in an article for The Jewish Tribune last year. “Mr. Town accepted his mistress’ help, did not pay for it, and he benefited financially. The court was influenced by the fact that the mistress made Mr. Town the focal point of her life and that through the years Mr. Town assured his mistress that he would look after her. While this did not create a legal relationship, it proved the nature of the relationship.”
It’s not only the courts that are walking down the aisles to the beat of a different drum. In Alberta, for example, there is the Adult Interdependent Relationships Act, the Intestate Succession Act, and other pieces of legislation that provide surviving spouses and common law partners the same rights to claim support from the estate and share in the deceased estate on intestacy. However, says Carla Jones, a spokeswoman for Alberta Justice: “Under current law, Alberta provides for dower rights to married people. This includes an automatic life interest in the homestead or matrimonial home when a spouse dies and the home is owned by the deceased spouse. . . . This right does not extend to adult interdependent relationships. The Dower Act is not changing at this time.”
In neighbouring Manitoba, major legislative amendments were proclaimed in 2004 to create The Common-Law Partners’ Property and Related Amendments Act. “It was an omnibus bill that amended 56 statutes. It was significant,” says Colette Chelack, director of family law with Manitoba Justice. “Now in Manitoba, a common law partner is able to claim a share of a person’s estate if they’ve died without a will,” she adds, noting that if someone wrote a will excluding their common law partner, that partner could still claim part of the estate under The Family Property Act.
Ontario has the Succession Law Reform Act, which governs testate and intestate succession rights as well as the ability of dependant spouses to seek support from a deceased’s estate. “Both married and unmarried spouses have the ability to seek an order for financial support from the deceased spouse’s estate,” notes Jenny Lam, a spokeswoman for the Ontario Ministry of the Attorney General. “There are differences as well. An important example would be that only a married spouse has the right to obtain a preferential share of the deceased’s estate.”
In Saskatchewan, there is a more level playing field. “Saskatchewan’s Wills Act, 1996, The Administration of Estates Act, The Intestate Succession Act, 1996, The Dependants’ Relief Act, 1996, and The Family Property Act all treat married and common law couples who have cohabited for not less than two years the same,” says Maria Markatos, Crown counsel with the Ministry of Justice’s Public Law Division in Regina.
The thinking has changed since 2002 when the Supreme Court of Canada released its decision in Nova Scotia (Attorney General) v. Walsh. “In an 8-1 decision, the court upheld the constitutionality of the exclusion of unmarried opposite-sex spouses from provincial matrimonial property laws. It found that such exclusions were not discriminatory within the meaning of section 15(1) of the Charter of Rights and Freedoms,” notes Gillis. “Walsh . . . made the point that being married is different than being in a common law relationship,” says Gomery. Since then, he notes, “the courts have been struggling with the need to do justice in the case of common law couples without rendering uncertain some very key property law tenets.”
The courts and legislators have also recognized that public opinion is not aligned with legal reality. “There is a perception among the general public that common law spouses have the same rights as legally married spouses. This is simply not the case,” says Gillis. “I find many people, mostly women, are surprised and shocked that . . . their legal standing is not protected automatically,” says Olkovich.
The assumption of equality may well be reflected in the increasing number of common law couples in Canada. “According to Statistics Canada, the number of common law couples in Canada has more than doubled in the past two decades. With this option to marriage gaining in popularity and public acceptance, it is easy to see why people assume common law couples are afforded the same rights,” says Gillis.
There are also political factors at play, says Schwab, noting that governments may well question why they should have to assume responsibility for common law spouses in the wake of the deaths of their partners. “This is relatively new. It’s under the guise of protection.”
As Canadian courts and lawmakers begin a new relationship with common law couples, lawyers will have to be more vigilant. “Lawyers doing estate planning will need to consider amending their estate planning intake forms to consider common law obligations. Cohabitation agreements may need to be drafted to protect their clients’ estate-planning objectives,” says Olkovich. “These agreements, called domestic contracts in Ontario, will require independent legal advice, full financial disclosure, and fair bargaining. They will not be cheap making estate planning more dangerous for lawyers and advisers who dabble.”
Indeed, said Geoff Gomery, a lawyer with Nathanson Schachter & Thompson LLP in Vancouver, “one of the features of being married is the presumption of equality. There is no presumption of equality with common law couples. [But] it may come.”
Lawyers are certainly aware of the shifting landscape and its emerging signposts. “I used to say, ‘The good news is you’re common law. [Your partner] doesn’t have a claim against your estate.’ The law has changed,” notes Karin Schwab, an associate with Fraser Milner Casgrain LLP in Edmonton.
One of the most recent cases to have estate lawyers sitting up and reading the fine print is the Supreme Court of Canada’s Kerr v. Baranow decision. While the focus is on division of assets after the breakdown of a common law relationship, it has important ramifications for wills and estate law, especially with respect to constructive trusts and unjust enrichment. “The Kerr decision makes it easier to proceed against an estate,” says Edward Olkovich, a Toronto lawyer and certified specialist in estates and trusts. “Penny-pinching relatives who inherit the estate often want to fight over who paid for the milk, butter, or soy juice for the past 20 years. Before Kerr, they claimed this was owing to the estate to offset any common law claims. Retroactive accounting attempts are now pushed aside. Because of Kerr, the estate must deal with unjust enrichment claims that raise the bar on the debate.”
“The court held that the common use of a fee-for-services basis is not the best method and that judges should be more flexible in their approach,” notes Erin Lepine, a lawyer with Nelligan O’Brien Payne LLP in Ottawa. “In particular, the court held that we should consider the reality of the circumstances between the parties and treat the claimant as a co-venturer, rather than hired help.”
Kerr, she adds, addresses the issue of mutual benefit conferral and when it should be taken into consideration in the context of an unjust enrichment claim. “The court held that this is best left to the defence or remedy stage, with the exception that they may be considered at the juristic reason stage of the analysis, but only insofar as they provide proof of the parties’ reasonable expectations.”
The SCC decision has provided a template or roadmap, says Gomery, co-counsel for the appellant Margaret Kerr. “It’s really a judgment you can read and you know what you’ll have to prove. It’s an effective summary.”
While breaking new ground, the decision was not unanticipated. “The courts are tending more and more to say there is a resulting trust and constructive trust,” notes Charles Wagner, the principal of Wagner Sidlofsky LLP in Toronto. “It’s an area where things are exploding.” For example, in Nowell v. Town Estate, the Ontario Court of Appeal more than a decade ago looked at whether a woman who had a 24-year relationship with a married man was entitled to part of his estate. It determined she was. “The judges felt the mistress should be fully compensated because the estate was unjustly enriched,” Wagner wrote in an article for The Jewish Tribune last year. “Mr. Town accepted his mistress’ help, did not pay for it, and he benefited financially. The court was influenced by the fact that the mistress made Mr. Town the focal point of her life and that through the years Mr. Town assured his mistress that he would look after her. While this did not create a legal relationship, it proved the nature of the relationship.”
It’s not only the courts that are walking down the aisles to the beat of a different drum. In Alberta, for example, there is the Adult Interdependent Relationships Act, the Intestate Succession Act, and other pieces of legislation that provide surviving spouses and common law partners the same rights to claim support from the estate and share in the deceased estate on intestacy. However, says Carla Jones, a spokeswoman for Alberta Justice: “Under current law, Alberta provides for dower rights to married people. This includes an automatic life interest in the homestead or matrimonial home when a spouse dies and the home is owned by the deceased spouse. . . . This right does not extend to adult interdependent relationships. The Dower Act is not changing at this time.”
In neighbouring Manitoba, major legislative amendments were proclaimed in 2004 to create The Common-Law Partners’ Property and Related Amendments Act. “It was an omnibus bill that amended 56 statutes. It was significant,” says Colette Chelack, director of family law with Manitoba Justice. “Now in Manitoba, a common law partner is able to claim a share of a person’s estate if they’ve died without a will,” she adds, noting that if someone wrote a will excluding their common law partner, that partner could still claim part of the estate under The Family Property Act.
Ontario has the Succession Law Reform Act, which governs testate and intestate succession rights as well as the ability of dependant spouses to seek support from a deceased’s estate. “Both married and unmarried spouses have the ability to seek an order for financial support from the deceased spouse’s estate,” notes Jenny Lam, a spokeswoman for the Ontario Ministry of the Attorney General. “There are differences as well. An important example would be that only a married spouse has the right to obtain a preferential share of the deceased’s estate.”
In Saskatchewan, there is a more level playing field. “Saskatchewan’s Wills Act, 1996, The Administration of Estates Act, The Intestate Succession Act, 1996, The Dependants’ Relief Act, 1996, and The Family Property Act all treat married and common law couples who have cohabited for not less than two years the same,” says Maria Markatos, Crown counsel with the Ministry of Justice’s Public Law Division in Regina.
The thinking has changed since 2002 when the Supreme Court of Canada released its decision in Nova Scotia (Attorney General) v. Walsh. “In an 8-1 decision, the court upheld the constitutionality of the exclusion of unmarried opposite-sex spouses from provincial matrimonial property laws. It found that such exclusions were not discriminatory within the meaning of section 15(1) of the Charter of Rights and Freedoms,” notes Gillis. “Walsh . . . made the point that being married is different than being in a common law relationship,” says Gomery. Since then, he notes, “the courts have been struggling with the need to do justice in the case of common law couples without rendering uncertain some very key property law tenets.”
The courts and legislators have also recognized that public opinion is not aligned with legal reality. “There is a perception among the general public that common law spouses have the same rights as legally married spouses. This is simply not the case,” says Gillis. “I find many people, mostly women, are surprised and shocked that . . . their legal standing is not protected automatically,” says Olkovich.
The assumption of equality may well be reflected in the increasing number of common law couples in Canada. “According to Statistics Canada, the number of common law couples in Canada has more than doubled in the past two decades. With this option to marriage gaining in popularity and public acceptance, it is easy to see why people assume common law couples are afforded the same rights,” says Gillis.
There are also political factors at play, says Schwab, noting that governments may well question why they should have to assume responsibility for common law spouses in the wake of the deaths of their partners. “This is relatively new. It’s under the guise of protection.”
As Canadian courts and lawmakers begin a new relationship with common law couples, lawyers will have to be more vigilant. “Lawyers doing estate planning will need to consider amending their estate planning intake forms to consider common law obligations. Cohabitation agreements may need to be drafted to protect their clients’ estate-planning objectives,” says Olkovich. “These agreements, called domestic contracts in Ontario, will require independent legal advice, full financial disclosure, and fair bargaining. They will not be cheap making estate planning more dangerous for lawyers and advisers who dabble.”
