Property Division Among Common Law Partners is Changing: Is a Cohabitation Agreement Right for You?
Updated: Mar 19, 2019
Alberta will, via Bill 28, the Family Statutes Amendment Act, revamp legislation by giving increased support to unmarried partners in a common law relationship (known in Alberta as an adult interdependent relationship, or AIP). The bill received Royal Assent on December 11, 2018 and will revise the Matrimonial Property Act by renaming it the Family Property Act and aims to, among other things, make it easier for unmarried partners in an AIP to divide their property upon break up. The changes will take effect on January 1, 2020.
Currently, AIPs who break up generally split property held in joint names while the property held in individual names are retained by the individual property owner. However, Alberta currently has no legislation governing the division of common law property. When there are disagreements about the division of property, the Courts settle disputes using previous court decisions and the complex legal principles entitled Unjust Enrichment and Joint Family Venture. The result is a system causing uncertainty and costly legal battles.
The new legislation will extend the current property division rules to allow AIPs to be treated the same as married partners. The amendments will also specify that property division rules will apply to property acquired after beginning a relationship of interdependence and will apply to adult interdependent partners and married partners that lived together prior to marriage.
The most common way to enter into an AIP is to live together in a relationship of interdependence for at least three years or of some permanence if the partners have a child. A relationship of interdependence is when two unmarried people share one another's lives, are emotionally committed to one another, and function as an economic and domestic unit.
The changes coming to AIPs highlight the importance of considering entering into a cohabitation or prenuptial agreement with your partner regarding the division of property should the relationship end. These contracts allow partners to enter into their own agreement regarding the division of property that can differ from legislation.
Contact Proskiw Law for more detailed information regarding Bill 28 or schedule a consultation to speak about whether a cohabitation or prenuptial agreement is in your best interests.