Married couples and those in common-law relationships are generally treated the same in estates matters, but there are a couple of key differences that can have a financial impact on a surviving spouse, says Toronto wills and estates lawyer Elinor Shinehoft.
“Many people don’t realize that there are differences between common-law and married couples when it comes to estates law. The way the legislation sees it, you made a decision not to get legally married, so you’re going to have legal rights that are different,” says Shinehoft, principal of Shinehoft Law.
“The main difference…
Married couples and those in common-law relationships are generally treated the same in estates matters, but there are a couple of key differences that can have a financial impact on a surviving spouse, says Toronto wills and estates lawyer Elinor Shinehoft.
“Many people don’t realize that there are differences between common-law and married couples when it comes to estates law. The way the legislation sees it, you made a decision not to get legally married, so you’re going to have legal rights that are different,” says Shinehoft, principal of Shinehoft Law.
“The main difference is property rights.”
In Ontario, when a married person dies and leaves a will, the surviving spouse has two options. They can either accept what’s left to them in the will or they can elect, under the Family Law Act, to receive an equalization of property as if the couple had separated, explains Shinehoft.
She notes that property includes everything from investments, bank accounts and pensions to real estate, cars and jewelry.
“If you’re the surviving spouse and think you’d be better off financially by going through that calculation as though you were separating — rather than taking what’s left to you in the will — you have six months to choose that,” Shinehoft tells AdvocateDaily.com.
The election option is not available to common-law spouses, she adds.
“If you’re common-law and you leave property to your partner in the will, then that’s what they get. They’re only entitled to get what’s in the will, although they are free to challenge it like anybody else.”
When property is jointly held, whether in a married or common-law situation, it automatically goes to the surviving spouse under property law, Shinehoft says.
“If you own something jointly with someone else — whether you’re legally married, common law, or friends — whoever is on title jointly with the person who passed away will automatically get that property. And that will take priority over a will if there’s a conflict.”
Another important difference occurs when one partner dies intestate, she says.
“If you die without a will, Ontario law will step in and stipulate an order of distribution. Under the Succession Law Reform Act (SLRA), if I’m married and have no children, all of my property will go to my spouse. If I have a spouse and children, it will be split in a certain way between my spouse and children. If there’s no spouse and no children, they’re going to look at the closest next of kin, like parents and siblings. There’s a specific order that the province goes through to determine distribution,” Shinehoft says.
“This only applies to legally married people. If you’re in a common-law relationship and your partner dies without a will, you may very well be out of luck in the distribution.”
She notes that when defining “spouse,” the SLRA uses the definition contained in the Family Law Act, which does not include common-law partners.
But the SLRA does allow both types of couples to make a claim for dependent relief, whether or not the deceased partner had a will, Shinehoft says.
“There are rules that let you distribute your property the way you want, but there’s an assumption that you have to provide for dependents. If somebody was dependent on you during your life, they might still be dependent after your death,” she says, adding that a dependent — usually a parent, spouse or child — can bring a claim that the deceased didn’t leave anything to them or didn’t leave enough for them.
“You have to show that you were dependent on that person. If you’re a married or a common-law spouse and weren’t working and the person who died was the main breadwinner, then you could say, ‘I was fully dependent on them and they didn’t take care of me in the will.’ Then that would be investigated,” Shinehoft says.