Are you wondering how common law marriage works in British Columbia?
British Columbia's Family Law Act defines "spouse" in two ways. A spouse can be a married person or someone who has lived with their partner for a certain number of years. The latter refers to the common law definition.
Being common law in BC has implications for how you file your taxes with the Canada Revenue Agency (CRA), what happens when you separate, and who gets custody of your shared children.
Want to know more about your legal rights as a common law spouse? Check out this guide for everything you need to know.
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How to Prove to CRA that We are Common Law
Being considered legally married in BC confers legal rights. But most common law partners don't have an official marriage certificate.
Instead, you have to prove that you and your partner are in a "marriage-like" relationship. This means you must provide the CRA with documents showing that you and your partner share your life.
Here's how to do just that.
Shared Ownership of Residential Property
Joint ownership of a home for two or more years is usually sufficient to prove common law marriage.
You need to present the CRA with documents showing that you and your partner have cohabitated in the same house. Valid documents include your property deed or mortgage contract.
Keep in mind that the names of both common law spouses must be on the document to prove shared ownership.
Joint Leases or Rental Agreements
If you rent or lease your home, you and your partner can give the CRA a leasing or rental contract. Again, both parties should be listed on the contract, or else this wouldn't serve as proof of common law marriage.
Bills for Shared Utility Accounts
Utility bills for you and your partner's home may also suffice as proof of common law marriage. This includes gas, electricity, and water bills.
Other Important Documents
Any documents showing that you and your partner live together can serve as support for your common law status. For example, if you and your partner's driver's license addresses match, they can serve as proof to the CRA.
Identification Documents
Any other identification documents showing a shared address can count as proof that you and your partner are common law. This includes birth certificates that prove you and your partner jointly parent your child.
How Long After Living Together are Considered Common Law in BC?
It's a common misconception that living with your partner for one year makes you common law. BC laws state that you and your partner must live together for at least two years before you are common law.
If you and your partner have a child together before the two-year mark, BC also considers your relationship common law.
It doesn't matter how long you've lived with your partner. The only thing that matters is that you and your common law spouse did live together before the birth of your child.
What is a Cohabitation Agreement?
When two people move in together, understanding who owns what can get messy. That's why many couples sign a cohabitation agreement in BC beforehand.
Cohabitation agreements grant couples many of the legal rights of marriage. As such, you and your partner's agreement might include:
- Ownership of jointly purchased property and property purchased separately before the relationship
- Liability of joint debt and debt accrued separately before the relationship
- Inheritance plans (if the cohabitors are combining families)
These agreements protect common law spouses in case of separation. A cohabitation agreement can also protect the living partner in case one of you passes away.
Is a Cohabitation Agreement a Good Idea?
Even if you've lived with your partner for two years and are common law, it's a good idea to file a cohabitation agreement. Proof of common law alone may not protect couples in case of separation. Cohabitation agreements will.
If you don't have a cohabitation agreement, the Family Law Act will decide who gets what. The Family Law Act orders property to be divided equally, no matter who actually paid for it.
To dispute this equal division of assets and property, you'd need to prove ownership before the relationship. This process can be difficult unless you hire an attorney. So, you'll save money and time by filing a cohabitation agreement.
Can I Make a Cohabitation Agreement Before My Spouse Moves In?
Yes! Unlike proving common law marriage, you don't need proof of cohabitation to file an agreement.
How Much Does a Cohabitation Agreement Cost?
Getting your cohabitation agreement done the right way will cost you in the form of attorney fees. You'll have to pay the lawyer per hour to draft your agreement.
The average family lawyer in BC charges between $200 and $650 per hour.
Do I Need a Lawyer for a Cohabitation Agreement?
You could "DIY" your cohabitation agreement for free. But the templates companies offer online will cost you more in the long run.
Why? Because these documents may not be enforceable in a court of law. This is why you should always hire a professional and experience family law attorney to handle your cohabitation agreements.
Do Common Law Partners Have to File Taxes Together in BC?
In Canada, spouses cannot file jointly on tax returns.
But you will need to notate your common law status and partner's name on your tax return. You'll also have to list your partner's social insurance number, net income, and employment status.
What happens if you claim single status on your taxes or forget to notate your marital status to common law? The CRA will reassess your returns. This could result in owed back taxes or penalty fees.
What if We Have Children Together?
The CRA recommends that the common law spouse who makes less income file any children you have together. This will allow you to maximize deductions for child care expenses.
In BC, cohabitation agreements aren't legally allowed to include parenting responsibilities and/or future child support for unborn children. Instead, you must update your cohabitation agreement to include these stipulations.
What happens if you and your common law partner separate? Courts will look at your cohabitation agreement and numerous other factors when deciding who gets custody of the kids after separation.
Once you're separated, the parent with whom the child lives should claim him or her as a dependent for tax reasons.
What Not to Do in a Common Law Relationship
When it comes to common law relationships and separations, there are plenty of things you need to do. But here are some top mistakes you and your partner should avoid:
- Don't try to separate without an attorney
- Don't try to negotiate a separation settlement without an attorney
- Don't move out of your and your partner's shared home before your settlement is finalized
One other thing: many common law partners share children. If you want custody of your child, the last thing you should do is try to turn him or her against the other parent.
Courts will use behaviour like this in custody proceedings. For example, limiting your former partner's access to your shared child could result in you being denied custody altogether.
What is My Partner or Spouse Entitled to?
As with traditional marriage, common law partners are entitled to a 50/50 split of property and debt in case of separation in BC. However, there are a few exemptions to this rule.
For example, if one partner receives your shared home as part of an inheritance, 100% ownership will pass to that person.
Any debt incurred by one common law spouse prior to the relationship will also pass solely to that partner.
If you and your partner own property together, the Partnership Act in BC usually takes precedent.
What Happens If We Separate?
You don't enter a common law marriage thinking you and your partner will eventually split up. Yet, 40% of Canadian marriages end in separation or divorce.
The good thing about common law marriage is that if you and your partner agree to separate amicably, you can simply move out of your shared home. That's because common law doesn't require formal divorce, only separation.
During a common law separation in BC, one partner can't legally bar the other from entering the shared home. But you don't have to go through a formal process to separate.
You don't even have to move out of your shared home to be considered separated. BC's Family Law Act only requires that you stop acting like a couple. You could sleep in separate beds in the same home and be considered separated.
If you and your partner can't come to a separation agreement, you may have to seek a formal separation. The court will then divide your property 50/50 unless you have a cohabitation agreement that specifies otherwise.
If you DIY'd your cohabitation agreement, remember that it may not be legally valid. That means it won't be enforceable in divorce court.
Protect Yourself in Case of Separation
Common law in BC is a legal form of marriage. You're awarded the same tax benefits and legal rights, including property division in the event of separation. However, you must sign a cohabitation agreement to ensure your property is divided fairly and equitably.
Looking for more information on finances? You've come to the right place. Visit Insurdinary's financial blog and browse topics from marriage and taxes, to savings and investments.
