New Estate Remedies for Ontario’s Common Law Spouses: Joint Family Ventures – Part 1
What’s the difference between a friend, a family member and a lover? All three have different rights to share in estate property.
How can you be affected by these rights? It depends if you are an estate executor, estate beneficiary or surviving common law spouse. Here are the essentials you need to know.
Ontario’s common law spouses are often overlooked, mistreated and scorned by their partner’s surviving family members. Common law spouses suffer because they lack statutory property rights in Ontario. Instead, they must start legal proceedings and rely on the court system. They must have a judge decide to give them a share of property.
They do not automatically share in a partner’s estate. I have handled estate lawsuits. Those with common law spouse’s claims can be bitter and go on for years. However, common law spouses now have a new remedy-the joint family venture. Until the laws in Ontario change, common law spouses must understand this remedy.
The Supreme Court of Canada, in Kerr v. Baranow, on February 18, 2011, introduced the term, “joint family venture” (JFV). If elements of a JFV exist in a common law relationship, the couple’s accumulated wealth can be shared. It does not matter who is the registered owner or who paid for the property.
The Kerr decision created a new template for unjust enrichment claims. It confirmed the remedy to use is a constructive trust. In the absence of statutory guidelines or domestic contracts, common law domestic partners must rely on Kerr to resolve property disputes.
The JFV is a discretionary remedy to be established based on the evidence. It is not automatic as if it were a statutory right.
Married partners in Ontario have certain automatic rights to share in property. These are given under provincial family laws. Common law spouses who acted and treated each other as married in Ontario do not have such rights.
The Supreme Court in Kerr stated courts should abandon attempts to link up a spouse’s contribution to a specific property. There need not be an attempt to retroactively consider the value of each spouse’s services. When there is a break up, the court should not compensate spouses as if they were hired help.
A more flexible approach considers both parties working for a common goal and making different contributions. Because of this, assets are accumulated. Money remedies for unjust enrichment should reflect the spouse as a co-venturer, not as paid help.
Elements of a Joint Family Venture
You need to prove a JFV exists. A court will consider these main factors:
1. mutual effort – collaboration towards common goals, pooling efforts and resources, team work in having and raising children and joint contributions
2. economic integration – existence of a “common purse” or joint bank account showing interdependence, integration of finances and economic well-being with priority of the family unit over individual welfare
3. actual intent – expressed or inferred from evidence that the court must consider. Parties may deliberately not want to be economically intertwined.
4. The court should not impose its views. A JFV may be inferred where parties:
- accept themselves as equivalent to married
- hold themselves out as married
- live in a lengthy, stable relationship
- hold title jointly or if alone showed little concern for accounting
- made a will or plans for property distribution on death
5. priority of the family – did the parties give priority to family? Was there an assumption of a shared future, financial sacrifice for the family, foregoing career advancement or leaving work to raise children?
I have handled property claims as a lawyer for common-law spouses for over 30 years. This new remedy is worth discussing with a lawyer.
Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of Executor Kung Fu: Master Any Estate in Three Easy Steps. © 2013Posted By: Ed Olkovich In: Estates On: October 30th, 2013