Recent changes in the law based on a major Supreme Court decision of February 2011 have changed the landscape for common-law separation. Couples contemplating common-law relationships are advised to become informed of these changes. Couples currently living in such relationships, especially if they are considering a separation, should continue reading.
Property Division in Common-Law Separation
A significant outcome of the Supremes Court’s judgment changes the way that courts now view property and monetary consideration. Previously, financial consideration was decided on a contractual basis, as though the person making the smaller financial contribution, historically the woman, was a paid employee of the partner making the greater financial contribution, historically the male. Such consideration will now be considered on the basis of co-venturer: put more plainly, the partners are now considered to be co-contributors.
This has significant implications, the essence of which is to put both common-law partners and their respective contributions to the relationship on a more equal footing. As well, these contributions to the union are now more inclusive and broader than the previous, single focus on monetary matters.
Courts will now weigh non-monetary contributions to the relationship when determining division of assets. For example, if partner A assumed domestic and child rearing duties which enabled partner B to pursue a career and to accumulate a degree of wealth, the non-working partner A has contributed significantly to the union and any accumulation of wealth and assets. For partner A not to share in the wealth amounts to an unjust enrichment of partner B.
Accordingly, the court will now determine the division of assets on the basis of a just enrichment for both partners.
A trust is defined as “a relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another.” The concept of unjust enrichment carries over to the idea of what is termed “resulting trust.” If, for example, the common law couple has invested in property, even should legal title be in the name of one partner, the courts will determine if the beneficial ownership of the property should be shared between both partners, with this determination along the lines of unjust enrichment. This is the resulting trust. It can be a complicated matter, however, and if the couple has accumulated property or assets in the name of one partner during their period of cohabitation, they should obtain a legal opinion. Please call Howard Nightingale for further information.
Child Support considerations in common-law separation
Common-law couples with children should be advised that family law applies: spousal financial support as well as child support is part of the settlement. The question of custody, whether joint or shared vs. sole custody is also a matter of concern and subject to the laws and the courts. When children are involved, it is especially important to seek legal help. Please contact Howard Nightingale Professional Services for advice and counsel.
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