A common-law breakup could leave you financially worse than a divorce

Separation protocols aren't clear cut, even with legislation in place

A common-law breakup could leave you financially worse than a divorce

The conversation on how to divide assets and financials with a partner in the case of divorce or death is never easy, but it is an important one to have, especially if you’re in what they call a common-law relationship.

A common-law status applies to those living in with a partner for 12 consecutive months or who share a child by birth or adoption but are unmarried. More often than not, common-law relationships entail one partner moving into the other partner’s property without establishing a formal arrangement.

This can be highly problematic in the event of a breakup, so much so that Sydney Bunting, a lawyer at JJ Integrative Family Law LLP, told the Canadian Press that property rights within common-law relationships had become one of the most common topics at her firm.

In fact, the number of common-law relationships is on a steady rise in Canada, with as many as 3.9 million people aged 15 and up living with a partner in 2021. Quebec is the common-law hotspot with 1.7 million unmarried couples who live together.

Even without a marriage certificate, there are still certain protections in place for common-law relationships when dealing with joint ownership of possessions and insurance beneficiaries, similar to what a married couple would have under law.

However, legislation for common-law relations differs per province, so what comes next after a breakup isn’t always as clear cut – even with lawyers involved. For instance, the Canadian Press reported that common-law couples aren’t legally required to share the value of the acquired property during the relationship in Ontario, but in British Columbia, it is default for the property to be shared equally, with the non-titled partner claiming growth in the property.

Meanwhile, the non-titled partner in Ontario would have to establish a trust claim to show that the non-titled partner’s contributions have enriched the other while depriving the non-titled partner, the Canadian Press reported.

Ultimately, Bunting claimed that a stay-at-home partner has more to benefit from the rights and protections of a marriage compared to a common-law.

Financial planner Jackie Porter also reminded the public to decide ahead of time what each partner would be financially entitled to while they are still on friendly terms. More importantly, she emphasized the importance of documenting whatever has been discussed.

"Working out details may not be a pleasant conversation for most people but an important discussion to ensure both parties are protected…because a common-law breakup has the potential to hurt someone financially worse than a divorce could," Porter told the Canadian Press.