New Estate Remedies for Ontario Common Law Spouses: Joint Family Ventures – Part 2

Are you a surviving common law partner? Common law spouses often have to fight to get a share of a deceased’s partner’s property. This is because Ontario does not automatically give cohabiting partners a share of property.

Married partners in Ontario have certain automatic rights to share in property. These are given under provincial family laws.

What if you are you an Ontario common law spouse?

You may act and treat each other as married. However, Ontario law treats you differently. You do not have the same rights as married spouses. What does that mean?

Common Law Spouses must do their Estate Planning

Have you discussed estate planning?

Talk with your partner about what happens if one of you dies. This can include:

• Holding assets jointly with proof the surviving partner is to inherit them
• Being designated a beneficiary on insurance or pension benefits
• Being named in a will as a common law spouse

You cannot assume you will inherit anything without an estate plan.

Children from a prior relationship may have legal rights to inherit everything. Good luck asserting your rights if they feel you are stealing their birthright. You will have to prove your case in court before you get anything.

Protect Yourself

Does your partner have an old, out-of-date will? Did she leave everything to her sister? Will you be protected or evicted from your home? Do you know if your name is registered on title to your home?

Unless you are on title, you do not automatically share in your partner’s property. Until Ontario laws change, you must understand your rights. Be prepared to make a claim against estate property.

You may have to go to court to get adequate support. Speak to a lawyer who can advise you on the current remedies available. This includes the right to establish a Joint Family Venture.

New Joint Family Ventures

In 2011, the Supreme Court of Canada created this new remedy in Kerr. In this decision, the court signalled a new approach to common law partners and property.

In Kerr, one of the couples had cohabited for 12 years. They had two children together during their cohabitation. There was evidence of economic integration and mutual efforts for the sake of the family and children. Vanasse gave up her career at CSIS and her income. She principally cared for the couple’s two small children.

Her partner, Seguin, sold his business for $11 million dollars. The trial judge said if he kept all this money to himself it was an unjust retention. The couple had worked together as a family. Seguin would be unjustly enriched if he kept all of the money from the sale.

The trial judge awarded Vanasse a monetary award of $996,500. This was a discretionary calculation on the “value survived” approach to unjust enrichment. The court noted a link between the increase in assets during the relationship and Vanasse’s contributions.

The Court of Appeal in Vanasse

The Ontario Court of Appeal set aside the trial judge’s award. It preferred the value received approach with a quantum meruit calculation. Each party had to assess and set off the dollar value they received from each other.

How can courts, retroactively, figure the dollar value for changing diapers?

There was, however, no appeal on the spousal and child support awards of approximately $111,000 per year.

The appeal court criticized the use of equalizing standards of family property for common law partners. This is what married couples can do. But until the law changes, this was not proper for common law spouses.

The Court of Appeal said that starting with a list of assets and liabilities at the beginning of cohabitation was not proper. The “value received” approach for unjust enrichment in domestic partnerships should value the benefits each party received.

The Final Judgment

The Supreme Court of Canada rejected the Ontario Appellate Court’s reasoning. The trial decision was restored.

You have to show you worked as a couple on a joint family venture. You must also show another link; this is between your non-financial contributions and the wealth accumulated in your partner’s name. Common law spouses are now not to be treated like hired help.

I have handled property claims by common law spouses for over 30 years. The Kerr decision represents a breakthrough. But it still means you need a good lawyer and determination to fight. Until the law changes, estates will be frozen by new joint family venture battles.

Read Part 1 of my blog on New Estate Remedies for Ontario’s Common Law Spouses: Joint Family Ventures.

Read more about common law spouses and estate planning in my blog post, Are You an Ontario Surviving Common Law Spouse Who Needs Support?

Read the Supreme Court of Canada’s decision in Kerr v. Baranow.

About Ed

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. © 2013