The breakdown of a relationship can be a very difficult and trying time whether you married or not. We are here to help you navigate through the complex web of legislation and court rules, procedures and processes to ensure you receive a fair and equitable settlement. Let us take the stress and anxiety out of your hands and guide you to a proper resolution in the quickest and most cost-effective fashion possible.
What is a common-law relationship?
Common-law relationships in Alberta are called “adult interdependent partner relationships” and common-law partners are called “adult interdependent partners”. Unless you meet the criteria of an adult interdependent partner set out in the Adult Interdependent Relationships Act you are not in an adult interdependent partner relationship. If you are in an adult interdependent partner relationship this triggers rights and obligations related to adult interdependent partner support – the same things as “spousal support” for married couples. If you separated after January 1, 2020 it also has significant implications related to the distribution of property on separation.
Adult interdependent partner support is the same thing as spousal support. The terminology is simply different. Spousal support is the term used for married couples, whereas adult interdependent partner support is the term used for unmarried couples.
If you are or were in an adult interdependent partner relationship and separated after January 1, 2020, on separation property will be divided based on the Family Property Act.
When am I common-law?
You are in a common-law relationship (legally referred to in Alberta as an “adult interdependent partner relationship”) once you live in a relationship of economic interdependence for a continuous period of not less than three years if there are no children, or a period of “some permanence”, if there are children of the relationship.
A relationship of economic interdependence is determined based on a variety of factors set out in the Adult Interdependent Relationships Act. These factors include, among other things:
- Whether you and your partner are having sexual relations;
- Whether you and your partner are cooking, cleaning, doing laundry or doing other domestic services for the other;
- Whether the general public views you as being in a relationship;
- How integrated your finances are; and
- Whether you own property together.
No one factor is more important than another – all of the factors must be considered together.
Is spousal support available in common law relationships?
If you are in an adult interdependent relationship you may be entitled to support from your former
Once you meet the criteria of being adult interdependent partners, rights and obligations relating to adult interdependent partner support are triggered. Adult interdependent partner support is the same as spousal support. The terminology used is different but it is the same in all other aspects.
In order to qualify for adult interdependent partner support one must first establish entitlement. Entitlement can be established in three ways:
- Compensatory; or
- Non-Compensatory (needs based).
What is contractual partner support?
Contractual entitlement exists because of a contract – a cohabitation agreement, prenuptial agreement, sponsorship agreement, or other contract between you and your partner. If an agreement exists, the terms of that agreement will determine whether and how much partner support is payable. Depending on the circumstances surrounding the signing of the contract or, if the terms of the agreement are unduly unfair, the agreement may be challenged and the terms changed.
What is compensatory partner support?
Compensatory entitlement happens when a partner suffers a loss related to the roles each partner played in the relationship or a loss related to the breakdown of the relationship. Typically, the other partner experiences a corresponding gain.
For example, if one partner leaves her or his career in order to care for children and as a result loses out on the opportunity to pursue and develop a career (usually there is a corresponding advantage provided to the other partner who is then able to grow her or his career), the partner that stayed home will likely be able to establish an entitlement to partner support. Compensatory support is aimed at compensating the partner that has been disadvantaged due to the breakdown of the relationship and the role that partner played in the relationship that led to the disadvantage.
What is non-compensatory partner support?
Non-compensatory entitlement is when there is a need – one party cannot make ends meet - coupled with the other party having the means to pay. The goal of the court here is to try to find a way to allow both parties to continue with a standard of living similar to the standard of living enjoyed while the parties were residing together.
For example, if it took $5,000 for you to meet your monthly expenses while you and your partner lived together, but you now have an income of only $2,000 per month, there is a monthly shortfall of $3,000 needed in order to enjoy the same standard of living. This represents your monthly need.
If the other partner has monthly income of $10,000, he/she has an extra $5,000 per month. This extra $5,000 represents this partner’s means from which partner support can be paid.
How do we divide property if we are common law?
There are different rules for the distribution of property depending on when your relationship ended.
- If you were adult interdependent partners and separated after December 31, 2019 then property is divided based on the Family Property Act.
- If you were adult interdependent partners but separated on or before December 31, 2019 or, if you were never adult interdependent partners, then property is divided based on rules created by the court (known as the “common law”).
What happens if I separated after December 31, 2019?
In the case where you were in an adult interdependent partner relationship and separated after December 31, 2019 the Family Property Act applies. It characterizes property in three ways:
- Property accumulated during the relationship. This type of property is most often distributed equally. It is only in unique circumstances that property will be distributed in a proportion other than equal. This category captures the timeframe all the way back to the beginning of when you first started living together. It is only in unique circumstances that this property is divided in a way other than equal.
- Property that is exempt from distribution. This property includes:
- Property acquired by a partner by gift from a third party;
- Property acquired by a partner by inheritance;
- Property acquired by a partner prior to the relationship;
- A settlement or court award for damages in tort; or
- The proceeds of an insurance policy that is not insurance relating to the replacement of property (for example, a life insurance death benefit).
The value of this property at the time of the commencement of the relationship of economic interdependence or at the time of receipt, whichever occurred later, is the value that will be exempt from distribution, subject to rules relating to tracing and the placing of such an asset into joint names. This increase is subject to distribution between partners but not necessarily equally. Rather, the court will distribute the increase in an amount the court determines to be just and equitable.
3. The increase in value of exempt property. There is no presumption that this increase will be divided equally. Rather, the court will divide this property in a “just and equitable” manner.
The onus to prove an exemption falls to the party asserting it. In other words, if you have property that can be classified as exempt, you must provide evidence to prove the asset falls into an exempt category.
How is family property divided?
The ultimate calculation of property distribution involves the following steps:
- Identifying all of the assets and liabilities;
- Attaching a value to each asset and a balance to each liability;
- Determining who is going to keep each asset and be responsible for each debt. Generally, if there is a debt attached to an asset the individual keeping the asset is responsible for the debt;
- Determining the extent of any exempt assets;
- Dividing up the non-exempt assets, including the increase in value of exempt assets in a fair and equitable manner, and then calculating each party’s net position;
- Calculating an “equalization payment”. The equalization payment is an amount equivalent to one-half of the difference in each party's net position, paid by the individual that has the higher net position.
An asset cannot be foisted by one party onto another. If neither of you want an asset then it will need to be sold and the net sale proceeds divided based on the legislative rules in the Family Property Act.
In terms of determining the value of each asset, parties are able to choose their own effective date of valuation. If you cannot agree on a date, the court will use the most current value available, subject to a variety of different considerations that need to be advanced by the party who does not believe it fair to use the most current date.
What is exempt property?
There are five categories of exempt property:
- Property brought into the relationship;
- Personal injury awards relating to tort claims; and
- Insurance proceeds for things that do not relate to the replacement of property.
There are two exceptions to the exemptions:
- The exempt property must still exist or you must be able to directly trace the value of the original exempt property into the value of a currently existing asset; and
- If you put ownership of an exempt asset into joint names you lose half of the value of your exemption.
If you have exempt property that has increased in value, that increase is subject to division. This division is not necessarily equal. Rather, the court will divide this property in an “equitable” manner. To be clear, an equitable division is what the court deems fair in all the circumstances. Such a determination is not necessarily equal.
What happens if I separated before December 31, 2019?
There is no legislation in Alberta that directs how property is divided if you never married and separated on or before December 31, 2019. As a result, over time courts have developed rules that guide this division. Generally speaking the rules revolve around an analysis of the level of contributions each partner made to the acquisition, preservation, maintenance or improvement of each asset. Contributions need not be directly linked but do need to be related in some way.
For example, an indirect contribution could be staying at home to care for children, leaving the other partner free to work outside of the home, thus generating income to acquire, preserve, maintain or improve assets.
Effectively, the court is looking for whether or not the parties were involved in a “joint family venture” - a joint effort toward the common goal of accumulating wealth for the benefit of the family as a whole.
What is unjust enrichment?
A constructive trust is a trust that allocates a benefit to a party that is not a legal owner of an asset as a result of some type of contribution made by the non-legal owner to the acquisition, preservation, maintenance or improvement of that asset. The constructive trust is created based on something called unjust enrichment. Unjust enrichment is a legal principle that includes the consideration of three factors:
- There has been an enrichment to one party;
- There has been a corresponding deprivation to the other party; and
- There is no legal reason for the enrichment.
If all three of these factors can be established the court will find that there has been unjust enrichment. Where unjust enrichment is present a non-legal owner will be entitled to some value from assets of which they hold no legal ownership. Property will be divided in a “fair and equitable” manner based on an analysis of the level of each party’s contribution to the acquisition, preservation, maintenance or improvement of each asset.
How does being common law impact parenting?
If you are an adult interdependent partner and have children with your common law partner, then you are likely a guardian. However, guardianship is not automatic. Guardianship is a Family Law Act term. Being a guardian means having the right to be consulted and involved in making major decisions about the children such as place of residence, which school the child will attend and whether or not the child should undergo any medical procedures.
Day-to-day type decisions are typically made by the guardian who is exercising time with the child at the time the decision is being made.
It should be noted that guardianship is not all or nothing proposition. Rather, any powers of guardianship can be limited or expanded by the court. In other words, if there are multiple guardians, one guardian may be granted the right to make decisions about certain aspects of a child’s well-being to the exclusion of the other guardian, while the other guardian may be granted rights to make decisions about other aspects. If you are a guardian and the court has not indicated a demarcation of rights then all guardians may exercise all of the powers, rights and responsibilities that come with guardianship.
Just because you are a parent does not mean you are a guardian. To be a guardian you need to acknowledge that you are a parent of the child and you need to show that you intend to be responsible for the child within one year of becoming aware of the pregnancy or learning of the child being born. If you are a woman, you need to bring the child to term and give birth.
Guardianship carries with it both rights and obligations. A guardian is typically involved in major decision-making about the child and to a right to obtain information about the child from third parties. Obligations are to be exercised based on the best interests of the child, and include nurturing the child’s physical, psychological and emotional development and ensuring the child has the necessaries of life, including medical care, food, clothing and shelter.
How is guardianship determined?
A parent is not automatically a guardian of a child. In order for a parent to establish guardianship rights the parent must have acknowledged that she or he is a parent of the child and demonstrate an intention to assume guardianship responsibilities within one year of the earlier of either becoming aware of the pregnancy or becoming aware of the birth of the child. An intention to assume guardianship responsibilities is determined by, among other things:
- Being married to the other parent at the time of the child’s birth or marrying the other parent after the child’s birth;
- Being an adult interdependent partner of the other parent at the time of the child’s birth or becoming the other parent’s adult interdependent partner after the child’s birth;
- Entering into a written agreement with the other parent;
- Cohabiting with the other parent for a least 12 consecutive months during which time the child is born;
- Carrying the pregnancy to term; and
- Voluntarily providing or offering to provide reasonable direct or indirect financial support other than pursuant to a court order.
No one factor is paramount. The court will consider all factors and then make a decision based on a cumulative analysis of those factors that apply.
Do I have to pay child support if we were not married?
Yes, yes you do.
Child support is the right of a child. Each parent of a child has both a moral and a legal obligation to support their child. Child Support for unmarried parents is governed by the Alberta Child Support Guidelines. These guidelines mirror the Federal Child Support Guidelines, which govern child support for married people.
Generally speaking, child support is calculated by considering the residence of the payor parent, each party’s income, the number of children and the type of parenting schedule. There are intricacies related to the calculation including, the calculation of each party’s income and the type of parenting schedule.
To determine a party’s income for the purpose of calculating child support we start with an individual's income from line 15000 of his or her income tax return. Any corporate income being earned is also considered as is any personal benefits being received from corporately paid expenses. There are some exceptions to the rule as well. Where one parent is unemployed or underemployed for the purpose of reducing his or her child support payments, a court can “impute” an income to that parent. Imputing income is assigning an income to the unemployed or underemployed parent in an amount commensurate with a level of income comparable to what they may be capable of earning.
Legislated tables have been created which detail how much child support is payable based on a party’s income.
Where one party is considered the “primary” parent (defined as having the child at least 60% of the time) the other parent pays the primary parent the full “table amount” of child support payable based on the amount set out in the Alberta Child Support Guidelines. Where there is no primary parent (i.e. where each parent has the child at least 40% of the time – called “shared parenting”) child support is calculated based on the following analysis:
- The difference between the amount of child support each parent would pay the other if the other were the child’s primary parent;
- Any additional costs associated with a shared parenting regime; and
- The condition, means needs and other circumstances of each party and the child.
The general principle in considering the second and third factors noted above is ensuring that there is not a significant disparity in the child’s standard of living between households.
In contrast to spousal/partner support, which has tax consequences to both parties, child support is paid using “after tax dollars”. In other words, the recipient does not pay tax on child support nor is the payor entitled to receive a tax credit for the child support paid.