Solutions

There are several ways to simplify the bond between common law spouses and protect them in case of death, separation or illness, including the following:

Cohabitation and separation contract

Signed by both spouses, the cohabitation or "living together" contract takes on its full meaning in the event of separation.

"Common law couples do not have the same rights and responsibilities as married or civil union couples. In other words, in the event of separation between common law spouses, splitting assets down the middle is not compulsory unless specified by prior agreement. This agreement is called a cohabitation agreement or contract," indicates notary Sylvain Carpentier.

The cohabitation contract can serve to regulate several aspects of a coupleʼs life: "Whereas the rules are clear with regards to marriage, common law spouses have total freedom when it comes to setting the terms of their agreement. For me, it's a question of getting the coupleʼs philosophy down on paper," says notary Danielle Beausoleil.

A cohabitation contract usually lists each spouseʼs assets before they lived together as well as joint purchases. This list specifies the distribution of assets in the event of separation, thereby avoiding quarrels about who gets the stove or leather couch.

Further details can be given about the distribution of joint assets. One can determine how the proceeds from the sale of joint property will be shared based on how much each contributed to the down payment or even on how much each contributed to maintenance and renovations, be it physically or financially, during the years of cohabitation. The sharing of family budget expenses can also be determined using a cohabitation contract.

If one of the spouses stays at home full-time or works part-time in order to take care of the children, the contract may provide for compensation. One cannot, however, establish the modalities of child custody, visiting rights or spousal or child support within this agreement, as these matters are governed by law and cannot be derogated from.

As a notary, Danielle Beausoleil makes a point of addressing the issue with her clients: "Every time that I meet a common law couple, especially when one spouse is staying at home with the children, I take some time to tell them about the advantages of a cohabitation contract and of how it can provide structure in the event of separation or death."

A cohabitation contract can be modified at any time provided, however, that both spouses agree on the changes to be made.

Checklist

The cohabitation and/or separation contract:

  • can serve to regulate several aspects of a coupleʼs life
  • allows couples to list each spouseʼs assets before they lived together as well as joint purchases
  • can provide further details related to joint assets
  • may provide for compensation when one of the spouses stays at home full-time or works part-time in order to take care of the children
  • does not allow one to establish the modalities of child custody, visiting rights or spousal or child support
  • can be modified at any time provided, however, that both spouses agree on the changes to be made

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Undivided co-ownership agreement

The owner of the family residence or of any other property acquired during the union is determined by the title of ownership, regardless of whether or not the common law spouse contributes to payment for the said property. Whatʼs more, the spouse who is the owner of the property does not need the otherʼs permission to dispose of the property as they see fit.

For both spouses to be recognized as owners of the family residence, both of their names must be on the title of ownership. It is also recommended that they sign an undivided co-ownership agreement in which they agree on how much each will contribute to household expenses, maintenance and repairs and what happens upon sale of the property, as well as determine who has priority purchase rights in the event of sale, separation or death and to set the terms and conditions thereof. It also allows a couple to establish other property-related rights and obligations.

Checklist

Undivided co-ownership agreement:

  • is recommended in order to allow common law spouses to agree on how much each will contribute to household expenses, maintenance and repairs and what happens upon sale of the property, as well as to determine who has priority purchase rights in the event of sale, separation or death and to set the terms and conditions thereof
  • allows a couple to establish other property-related rights and obligations

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Mandate in case of incapacity

In the course of a lifetime, it may also happen that an individual no longer has the ability to take care of or administer their property or assets. If no one has been designated to represent the individual in such circumstances, a council that includes the spouse and immediate family members will be called upon to do so as well as act as his or her curator or guardian.

"A mandate in case of incapacity is a document in which one gives the person of their choice the power to represent them in all aspects of their life: consent to medical care, accommodations, property management, bill payments, etc.," explains notary Beausoleil.

In her opinion, while the mandate in case of incapacity has become increasingly known and made use of, it is downright necessary in certain situations, namely that of single-income families.

"If the spouse on whom the family depends for income falls victim to a stroke, for example, and is unable to manage their affairs or has their assets, including their bank account frozen, things can quickly become complicated for the other spouse who will be left without any financial resources. A mandate in case of incapacity must take into account and be adapted to each specific coupleʼs family situation," pursues notary Beausoleil.

Should a personʼs situation be complex, e.g. they head a company or own residential buildings, the mandate can allow them to appoint more than one individual to manage their affairs. The powers and responsibilities granted to each individual are thereupon clearly defined by the mandate. The mandate may also detail specific instructions. It can additionally appoint one or more replacements should the designated person be unable to fulfil the responsibilities entrusted them.

The mandate ends upon the mandatorʼs death or upon recovery of their ability to administer their property or assets themselves or if protective supervision is instituted on their behalf. The mandate in case of incapacity should not be confused with power of attorney, by which one grants another the right to perform certain duties in oneʼs name, such as access a bank account or pay bills for example. A power of attorney is valid only when the grantor is in full possession of their means and legally capable of administering their own affairs, property and assets—it can be revoked at any time. It ceases immediately in the event of incapacity.

Checklist

The mandate in case of incapacity:

  • gives the person of your choice the power to represent you in all aspects of your life in the event of incapacity
  • allows you to appoint more than one individual to manage your affairs in complex cases
  • ends upon the mandatorʼs death or upon recovery of their ability to administer their property or assets themselves or if protective supervision is instituted on their behalf.

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Will

After 10 years of living in a common law union with André, Michèle dies. In the absence of a will, the totality of her property and assets, including half of the house, goes directly to her parents and to her brothers and sisters. It will then take André months to come to an agreement with his in-laws in order to redeem his deceased spouseʼs half of the property.

For notary, Sylvain Carpentier, Andréʼs story is common: "A lot of people arenʼt very well informed and donʼt know that preparing a will is the only way to ensure that a common law spouse receives something upon their death, unless one names them as a beneficiary in oneʼs life insurance policy."

Notary Danielle Beausoleil explains: "Without an official document, itʼs easy for a family to disregard the interests of a common law spouse. A will, on the other hand, allows one to make sure that the surviving spouseʼs interests are taken into account or to designate them as heir to the estate. A will can include many things such as last wishes (whether or not you plan to have a religious ceremony, burial, etc.), distribution of assets, guardians for children, donations to charity, specific bequests of family heirlooms such as a gold watch, for example…. It can also allow you to appoint who will manage your succession: close bank accounts, pay the final bills, etc. A well-drawn-up will truly reflects a personʼs individual wishes as well as their values.

A testamentary trust allows the common law spouse to restrict access to a loved one's inheritance, for example, it could determine at what age the beneficiary(ies) will receive the assets and property to which they are entitled.

Checklist

Will:

  • is the only way to ensure that a common law spouse receives something at the time of your death
  • allows one to make sure that the surviving spouseʼs interests are taken into account or to designate them as heir to the estate
  • allows you to appoint who will manage your succession
  • a testamentary trust allows one to restrict access to a loved one's inheritance

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