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Gay Legalese

Common Law

Legal Advice by Darryl Aarbo (From GayCalgary® Magazine, August 2005, page 31)
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Dear GayCalgary,

I have been together with my partner for nearly a decade now, and recently some issues of ownership have come up that neither of us knows what to do with. My partner is the owner of a business, and I’m wondering if under common law I have any control or ownership of that business too? What exactly is common law and what are my rights? With same-sex marriage now legal in Alberta, how much difference is there legally between the two?

Thank you for your time!

- Tug ‘o War

An excellent and timely question, although complex - I will do my best to answer without too much “legalese”. A “common law” relationship is one where two people live together in a “marriage-like” relationship without actually getting married. In other words, you live in an intimate relationship with emotional and/or financial dependence. The two people can be of the same or opposite sex.

The length of cohabitation required to be considered common law depends on who you ask. If you ask the Alberta government then you need to live together for three (3) years. If you ask the federal government then you only need to live together for one (1) year. Why the difference? I have no idea; I suppose our governments disagree as a matter of principle.

There is very little difference between being married and being common law. Your rights and obligations to your partner are extensive and too long to list in this response, but a few major examples are the right to apply for spousal support if you break up, rights to a portion of their estate if they die, rights (and obligations) under the Income Tax Act.

One of the few remaining distinctions between married and common law relationships is property. When you legally marry someone then you acquire substantial rights to your partner’s property. The rule is simple: you acquire a 50% interest in everything acquired during the marriage, regardless of ownership. In other words, it does not matter who actually owns the item. If it was acquired during marriage then you own half. For example, if your wife owns a house in her name alone or shares in a corporation then you own half if it was acquired during the marriage. There are a few exceptions for inheritance and the like, but not many.

Common law partners do not have the same property rights. In fact, people in a common law relationship have fewer property rights in the assets of their partner. Any rights are not “automatic” like they are in a marriage. Thus, you do not “automatically” have a 50% ownership in your partner’s business simply because you are in a common law relationship. If you were married and your partner acquired the shares in the business during marriage then you would have an automatic claim to the shares in his business.

It is possible for people in a common law relationship to acquire property rights in two limited cases. First, there is an area of law called “constructive trusts”. This area of the law states that one may be able to acquire rights to your partner’s property over time if you contribute to the acquisition or maintenance of the property. The length of time and the amount of contribution are specific to each case. Here you may acquire an interest in the property or get paid a reasonable amount for your time spent acquiring or maintaining the property.

A second case where a person in a common law relationship may be able to acquire an interest in his or her partner’s property is where the persons are of the same sex and were not allowed to marry during the acquisition of the property. The argument here is that “I would have married my partner but couldn’t, therefore, I am being discriminated against. If I had married him then I would have got half of everything”. This case is very complex because it would involve a constitutional challenge.

Now that same sex people can marry, people considering marriage should seriously consider a prenuptial agreement. Even if you are living in a common law relationship, an agreement is always a good idea to ensure everyone’s rights and obligations are perfectly clear.

Darryl A. Aarbo

If you wish to send in a letter, please email it to legaladvice@gaycalgary.com. Darryl A. Aarbo can be directly reached at Courtney Sebree Aarbo, Barristers & Solicitors, 1138 Kensington Road NW, Calgary, Alberta, T2N 3P3. Visit their website at http://www.csalaw.ca. Phone (403) 571-5133. Fax: (403) 571-5134

Other than the question, all personal information (i.e. name, address, E-mail) will remain confidential. GayCalgary.com Magazine does reserve the right to alter questions for brevity and content.

(GC)

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