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Property division for common-law couples in Alberta

Break-ups can be complicated, particularly for couples who have built a life together as a family but are not married. It’s now the norm for couples to live together, either choosing to forego a traditional marriage, or living together before saying ‘I do.’ While building a life together, such couples often invest in assets for their family, such as a home and vehicles.

When unmarried couples break up, one of the many details that must be addressed is how to divvy up the property acquired during the relationship. While arguing with your former partner about how your stuff should be divided after a break-up may be one of the last things that you want to do, you may find yourself with little choice if you and your former partner cannot agree on who should get what, or who should get how much.

no rules yet for dividing property of common-law partners

Currently in the province of Alberta, there are no default rules that govern how an unmarried couple’s assets should be divided after the couple breaks up. There are rules for dividing property set out in the Matrimonial Property Act, but they only apply to married couples. There is no equivalent legislation for unmarried couples.

For couples who decide to duke it out in court because they cannot agree about how to divide their property, judge made law is used to determine how the property will be divided. This law has evolved with decisions made by Alberta courts, and even decisions made by courts elsewhere in Canada, in direct response to the unique factual scenarios at play in each case. Given the random way that judge-made law develops, it can be difficult to predict how the law will apply in a given case if a couple decides to go to trial. Having a judge decide how to divide a couple’s property post-break-up can be a risky proposition.

Dividing a couple’s property this way can also be expensive, especially depending on the length of the trial. The onus is on the party making the claim to establish his or her entitlement to a share of the property, which often entails proving to the judge who did what in the relationship.

new property division legislation coming in 2020

The state of the law will be changing in less than six months. As of January 1, 2020, new legislation – the Family Property Act (referred to as the FPA in the rest of this article) – will replace the current Matrimonial Property Act and govern the division of property that belongs to both married and unmarried couples.

Under the new FPA, the default rule will be for couples to divide the property acquired during their relationship equally, without having to prove what each partner contributed. This rule will also extend to property acquired by married couples before they actually got married. Currently the Matrimonial Property Act only applies to property acquired by spouses after they get married. With these new default rules, the law applicable to the property of unmarried couples will be much clearer and more predictable.

Couples will also be able to opt out of the default rules in the FPA and enter their own agreements for dividing their property. However, to be recognized as binding and enforceable, such agreements must satisfy certain legal requirements. For example, all such agreements must be in writing, and each spouse must obtain independent legal advice before they enter the agreement.

Who will the FPA apply to?

The FPA will apply to two groups - married couples, and unmarried couples who are in “interdependent relationships.” In other words, the legislation will not apply to all unmarried couples.

There are three ways to become adult interdependent partners:

1.    Two people can live with each other “in a relationship of interdependence” for a continuous period of at least three years.

2.    The parties can have a child by birth or adoption. As long as they have a relationship of some permanence, they can be recognized as adult interdependent partners, even if they have not been together for 3 years.

3.    People can also speed up the process and become adult interdependent partners by entering an adult interdependent partner agreement.

Adult interdependent relationships can be either conjugal or platonic.

To make a property claim under the new FPA, unmarried claimants will have to prove that they were in an adult interdependent relationship, and in that case, they will also have to prove when the relationship became one of interdependence.

To learn more about adult interdependent relationships, see the Adult Interdependent Relationships Act.

When will the property of unmarried couples be divided?

After interdependent adult partners break-up, it may take up to a year for them to be recognized as “former interdependent adult partners.” Until then, an unmarried couple’s property cannot be divided under the FPA. This means that property acquired after unmarried couples separate, before they are recognized as “former interdependent adult partners,” is divisible under the FPA. However, the default rule of equal division does not apply to property acquired post-break-up. Instead, the property is to be divided “in a manner that [the court] considers just and equitable.”

How soon should former partners take legal action post break-up?

After a relationship between adult interdependent partners ends, or the parties should have known that the relationship was over, a claim for property division must be made within two years under the new FPA.

Even for relationships that end before the new FPA takes effect, it is wise to commence a claim for property division within two years of the time the relationship ends. In Alberta, the Limitations Act provides a standard two year limitation period that applies whenever a claimant seeks a remedial order.

Need legal advice?

If you want legal advice about any of the topics addressed in this article, including:

  • the Family Property Act,

  • whether you are in an adult interdependent relationship,

  • what date your relationship could be considered an adult interdependent relationship, or

  • agreements to divide property with a former partner,

or any other family law matter, please contact Taylor & Company.

Disclaimer

This article is intended to provide an overview of how the Family Property Act applies to unmarried couples. It does not constitute legal advice. Taylor & Company recommends getting professional legal advice to know how the law will apply to each case.

POSTED BY SHANNON LIVELY - JULY 30, 2019