The Matrimonial Property Act Will Change in 2020 and Common Law Partners in Alberta Will Have Property Rights
What do the changes mean?
Individuals living with common law partners will have the same property rights as married people at the end of 2019.
The new rules come into effect January 1, 2020 and will apply to relationships that separate after December 31, 2019. This means that even if property is in “your name” it is shareable. Even if your partner has debt “in their name” you may be obligated to share this debt. Notwithstanding whether assets or debts are “joint” they may be shareable. Property that you inherited may be at risk. Debts you did not agree with may be your obligation.
Who will this apply to?
The Matrimonial Property Act provides the rules under which property is divided between married spouses who have separated. It does not currently apply to people leaving unmarried relationships, regardless of the nature or duration of those relationships, so if you were not married, you did not have guaranteed property rights. Unmarried partners historically only had some rights to financial support (not property) under the Adult Interdependent Relationships Act.
The Matrimonial Property Act will be renamed the Family Property Act and the rules for the division of property between married persons will apply, with small differences, to “adult interdependent partners”. An individual becomes an “adult interdependent partner” (the Alberta equivalent to “common law”) in one of two ways:
- By living with another person in a “relationship of interdependence” for at least three years, or for less time if the couple have had a child together; or,
- By signing an adult interdependent partner agreement, regardless of how long the couple has lived together.
People can also become adult interdependent partners intentionally, by signing an Adult Interdependent Partner Agreement. The amendments to the Matrimonial Property Act do not discriminate between adult interdependent partners who are in a romantic relationships and those who are related to each other. The test is “relationship of interdependence” regardless of intimate relations.
What Does This Mean For Common Law Partners?
The Matrimonial Property Act will be amended to provide that the terms “adult interdependent partner” and “relationship of interdependence” are defined as they are under the Adult Interdependent Relationships Act. You will not need to be a “spouse” to enjoy the property rights previously only enjoyed by married couples.
The term “matrimonial home” is replaced with “family home”, and defined as a property owned, leased or occupied by one or both spouses or adult interdependent partners. Similar amendments will replace the word “matrimonial” with “family”, as in “family property order” rather than “matrimonial property order,” and add “or adult interdependent partner(s)” after the word “spouse(s),” in the definitions section and throughout the rest of the act.
Who will now be able to apply to divide property?
Adult interdependent partners will be allowed to apply for family property orders under conditions similar to those currently only applicable to married spouses. A person may apply if:
- They have become former adult interdependent partners;
- They are living separate and apart and a partner had or may transfer or gift property to a third party; or,
- They are living separate and apart and a partner is dissipating property
Adult interdependent partners will become former adult interdependent partners:
- By signing an agreement that evidences their intention to live separate and apart;
- By living separate and apart for at least one year
- By a partner marrying a third party or entering into an adult interdependent partner agreement with a third party; or,
- By obtaining a declaration of irreconcilability under section 83 of the Family Law Act.
As such, you can become a former adult interdependent partner even if your partner wishes not to separate.
Don’t want this to affect you?
Maybe you chose to live common law because you did not want to have the same property and debt division obligations as married couples? We can help. Contact EBL Family Law today to learn more about how this will apply to your particular situation.
If necessary, we can draft a Cohabitation Agreement or other legal documents required to opt out and determine your future rights and obligations - with the Independent Legal Advice required to make such agreements enforceable in the future.
To be clear – if both parties do not have Independent Legal Advice, any agreement is open to be challenged before the Court and often likely to be overturned.
By finalizing a Cohabitation Agreement or other legal documents, with Independent Legal Advice, you are putting yourself in charge of your future and protecting your own assets if separation were to occur. You are protecting yourself from debts you may otherwise be “on the hook” to pay a share of.
Be proactive, allow the professionals at EBL Family Law help you in drafting a Cohabitation Agreement or other formal legal documents. It may be awkward to discuss cohabitation with your partner, but if separation occurs, it will a more predictable and less financially burdensome process in the future. If you do not want these changes to affect property in your name, get a Cohabitation Agreement or other legal document signed with EBL Family Law.
Of course, the law is always open to interpretation by the Courts, and this legislation will be no different. We will keep ourselves appraised as to how these changes will apply, and how we intend to advise our clients as any changes are implemented.