Common-Law Spouse Rights in Ontario: Estate Planning Guide

In Ontario, many couples live together in long-term, committed relationships without getting married. These relationships, referred to as common-law partnerships, are increasingly common but come with various legal and financial complexities. Unlike married couples, common-law spouses in Ontario are not automatically entitled to the same legal protections, especially regarding property division and inheritance. For this reason, estate planning becomes an essential tool for common-law partners to secure their financial rights.

This blog will explore what it means to be a common-law spouse in Ontario, discuss the importance of estate planning for common-law couples, and highlight the key legal considerations to protect both partners’ financial rights.

What is a Common-Law Spouse in Ontario?

A common-law spouse in Ontario is defined under the Family Law Act (FLA) as a partner who has lived with another person in a conjugal relationship for at least three years or any duration if they have a child together. While these relationships often resemble marriages in their emotional and practical aspects, they are treated differently in the eyes of the law. Common-law spouses do not have automatic rights to property, inheritance, or financial support upon separation or death, unlike legally married spouses.

The Importance of Estate Planning for Common-Law Spouses in Ontario

One of the most significant differences between married and common-law couples is how estate planning is handled. In Ontario, when a married person dies without a will, their surviving spouse is entitled to a portion of the estate under the Succession Law Reform Act. However, common-law spouses do not have the same automatic rights. This is why estate planning for common-law spouses in Ontario is crucial.

Without a comprehensive estate plan, a common-law spouse may find themselves excluded from their partner’s estate, with assets distributed to biological relatives instead, such as children, siblings, or parents. Proper estate planning ensures that a common-law partner’s financial rights are respected and provided for in the event of their partner’s death.

Financial Rights of Common-Law Spouses in Ontario

Although common-law spouses in Ontario don’t have automatic rights to their partner’s property, they may still be entitled to financial support and certain assets under specific circumstances. Below are key financial rights that common-law spouses in Ontario should be aware of:

1. Spousal Support

While property division for common-law couples is limited, spousal support is a notable exception. Common-law spouses in Ontario may be entitled to spousal support if:

• They have lived together for at least three years or

• They have a child together.

The court considers various factors in determining spousal support, including the length of the relationship, the financial situation of each partner, and the roles each partner played during the relationship (e.g., caregiving for children).

1. Unjust Enrichment and Constructive Trust

Suppose a common-law spouse contributed significantly to the relationship through financial support or unpaid labor (e.g., homemaking or childcare) but is not on the title of any shared property. In that case, they may have the right to claim a portion of the property under the principles of unjust enrichment or constructive trust.

In these cases, the court assesses whether one partner unfairly benefited at the expense of the other and whether the non-titled partner should be entitled to a share of the property or financial compensation.

Estate Planning Tools for Common-Law Spouses

To protect the financial rights of common-law spouses in Ontario, engaging in careful estate planning is essential. Below are some key tools that common-law couples can use to secure their financial futures.

1. Wills

The most important tool for common-law spouses is a will. Without a will, a common-law partner has no right to inherit any part of their deceased partner’s estate. By drafting a clear and legally binding will, partners can specify how their assets should be distributed upon death. This ensures the surviving common-law spouse is financially secure and protected from legal disputes with the deceased partner’s biological family.

1. Cohabitation Agreements

Like a prenuptial agreement for married couples, a cohabitation agreement outlines how property and finances will be divided during separation or death. This legal document provides clarity and protection for both partners and can help prevent future costly and stressful legal battles.

1. Beneficiary Designations

Common-law spouses should also ensure that they are listed as beneficiaries on life insurance policies, Registered Retirement Savings Plans (RRSPs), pension plans, and other financial instruments. Unlike property, these assets are not governed by a will and must be designated separately. Common-law spouses can secure their economic rights by naming each other as beneficiaries.

1. Joint Ownership

To avoid disputes over property ownership, common-law couples may consider holding certain assets, such as bank accounts or real estate, in joint ownership. This provides both partners a legal interest in the property and ensures a smoother ownership transition upon death or separation.

Canada Pension Plan (CPP) Survivor Benefits for Common-Law Spouses

A common-law spouse in Ontario may also receive survivor benefits under the Canada Pension Plan (CPP) if their partner dies. To qualify for these benefits, the surviving partner must provide proof of the common-law relationship, such as shared bills or legal documents, and meet the CPP’s eligibility criteria.

While these benefits are available to common-law spouses, it’s essential to take steps early on to ensure that all required documentation is in place. This is another reason why estate planning for common-law spouses in Ontario is critical.

Challenges Faced by Common-Law Spouses Without Estate Planning

Without proper estate planning, common-law spouses face several challenges:

• No automatic right to the family home: If one partner solely owns the home, the surviving partner may have no legal right to continue living there.

• No right to inherit: Without a will, the surviving common-law spouse is not entitled to any portion of the deceased partner’s estate, which could leave them financially vulnerable.

• Risk of legal disputes: The deceased partner’s biological family may contest the distribution of assets, leading to lengthy and costly legal battles.

Conclusion

Being a common-law spouse in Ontario comes with specific legal and financial challenges, especially when compared to married couples. Estate planning for common-law couples is crucial to ensuring that both partners’ economic rights are protected, especially in the event of death or separation. Common-law spouses can avoid potential financial hardship and secure their future together by creating a comprehensive estate plan that includes a will, cohabitation agreement, beneficiary designations, and joint ownership of assets.

Whether you are currently in a common-law relationship or planning to enter one, taking proactive steps to address your estate planning needs is essential to protecting your rights and those of your partner.