Marital status is something you likely encounter every year when you are doing your taxes. The options include married, living common law, separated, widowed, divorced, and single.
Marriages and common law are two types of long-term relationships, but they are not always treated the same way under Canadian and provincial laws.
Understanding the differences between these two categories is important for couples, especially couples who are navigating important life milestones with their partner, such as estate planning, financial management, and parental responsibilities.
This article will explore the differences and commonalities between common law relationships and marriage, such as their legal recognition, their financial implications, their related matrimonial rights and responsibilities, and the impact of marital status on wills and estate planning.
Legal recognition and status
Legal definitions
Marriage is the lawful union of two people to the exclusion of all others. Marriage in Canada is a legal process formalized through a marriage license, a ceremony, complete with an officiant and witnesses, and a marriage certificate.
The specifics of the process may differ from province to province, but generally, marriage grants spouses a wide range of legal rights and obligations concerning property, inheritance, taxes, and family law matters.
In contrast, a common law relationship in Canada, sometimes referred to as a common law partnership or common law marriage, is defined as two people living together in a conjugal* relationship, without being legally married, for a period that varies by province or territory.
*A conjugal relationship is a long-term relationship where individuals are financially, socially, emotionally and physically dependent on each other, sharing household and related responsibilities, and having made a serious commitment to one another.
Common law relationship status is defined differently across governmental jurisdictions too.
- For tax purposes: You are in a common law relationship if you are living in a conjugal relationship with a person who is not your married spouse, and at least one of the following conditions applies:
- Your partner has been living with you in a conjugal relationship for at least 12 continuous months
- Your partner is the parent of your child by birth or adoption
- Your partner has custody and control of your child (or had custody and control immediately before the child turned 19 years of age), and your child is wholly dependent on them for support
- For immigration contexts: You are in a common law partnership if you have lived in a conjugal relationship with your partner for at least 12 months. In the case of immigration, your common-law relationship must be established before you submit sponsorship and immigration applications.
- For estate planning purposes: The legal definition varies from province to province. What’s important to note is that many provinces don’t recognize common law partners as legal spouses for estate inheritance, meaning that without a will naming them as a beneficiary, a common law partner could receive nothing if their partner passes away without a will.
Remember that common law relationships are de facto relationships, and marriages are de jure relationships. This means that common law relationships may exist in reality but are not officially recognized by laws, while marriages are relationships that are legally recognized and supported by marriage licenses, ceremonies, and certificates.
If you are in a common law relationship, you must prove it through evidence of your cohabitation and conjugal relationship.
How common law varies across Canada
The recognition of common law relationships and the time required to be considered common-law partners in the eyes of the law differ across Canada.
Accurate as of March 25th, 2024
Why choose common law over marriage?
Couples may choose a common law relationship over marriage for various reasons, like less formal recognition of their relationship, financial considerations, or personal beliefs.
While some view it as a way to maintain independence, others see it as a step towards marriage, testing their compatibility over time.
In terms of estate planning, marriage rights and common law marriage rights are not the same. Depending on which province you live in and how long you have been living together, your partner may not automatically inherit anything.
That’s why it’s important to make your will and document your wishes.
How marital status affects wills
Here’s a breakdown of how your marital status can affect the estate settlement process after you pass away.
*If there is a declaration in the will that it is made in contemplation of the marriage, it may not be revoked. This means you must state in your will that you know you will be getting married and have documented your wishes with that in mind.
Financial implications of marriage vs common law
Legal benefits of marriage include property sharing under family law, automatic inheritance rights, and potential tax advantages.
Common law partners may have agreements regarding property and may be eligible for some tax benefits, but often lack the automatic rights granted to married spouses, especially regarding property division and inheritance.
Effects on your taxes
As a couple in Canada, you don’t need to file a joint return or list combined incomes. Instead, while you’re completing your tax return, you’ll need to provide tax information about your spouse or partner, which includes their income.
Married couples and common law partners are taxed the same as anyone else, but they can access some marriage tax benefits not available to single people. For example, you can receive a tax credit called the spouse or common law partner amount if you or your partner have an income under a certain amount. You can also split tax credits or create a spousal RRSP.
Effects on your property rights
Property laws, which are under provincial jurisdiction, refer to things you own. This includes real estate property, such as land and buildings, but also personal property, such as objects you own physically or immaterially.
This means there can be variance from province to province, but generally, married couples automatically have equal property rights, even if they separate or if one spouse passes away. This is not true for common law couples.
For common law couples, anything you buy for yourself with your own money belongs only to you. If you’d like your partner to inherit something, you can either add them as a joint owner to the asset or name them as a beneficiary in your will.
Effects on your inheritance
Inheritance rights are automatically extended to married spouses, while common law partners may need explicit provisions in a will to inherit.
The best practice is to add your partner to your will if you want them to inherit anything, regardless of whether they are your married spouse or common law partner.
Inheritance can also include naming your spouse as a beneficiary on insurance policies and pensions.
Remember that adding your partner to your will does not automatically put you on theirs. Make sure to discuss your end-of-life wishes together to make sure you’re on the same page to avoid confusion in the future or difficulties in the estate settlement process.
Rights and responsibilities
Health care and property
- Unless you make a power of attorney (POA) document naming someone else as your attorney, substitute decision-makers for health care and property are often a list of next of kin. This means that the top of the list is often your married spouse, followed by children and family members.
- If you have a common law partner, they may not be on that list.
- If you want the power to choose who has the ability to make health and financial decisions for you, such as a common law partner, you should appoint them as your attorney in a POA document.
Guardianship
- If you pass away without a will and have dependent children, their guardianship will be decided by provincial laws and the court’s discretion.
- Any surviving biological or adoptive parent of your child would automatically assume guardianship.
- After parents, other people who can be considered for custody of a child include other relatives and family friends.
- A common law partner may not be automatically considered for guardianship or custody of your children. If you would like them to be a guardian, you should speak to them about it and, if they want to take the role, appoint them in your will.
Ending the relationship
Cohabitation vs marriage are very different in terms of what’s required to end the relationship.
Married couples must undergo a legal divorce process, which can involve the division of property, spousal support, as well as child custody and support arrangements.
Common law partners, on the other hand, may face a simpler separation process. There is no legal divorce in common law marriages. Instead, the relationship can end by simply parting ways or annulling a cohabitation agreement, though there might be challenges in establishing rights to property and financial support after separation.
Child custody and support
Both married and common law partners have the same moral and legal responsibilities towards their children. The primary concern in any separation is the child(ren)’s best interest. Both parents are expected to contribute to child support, regardless of marital status.
This is where a parenting arrangement may be helpful. A parenting arrangement is a plan made by you or a court regarding the care of your children after you and your partner separate or divorce. It includes living, education, religious, and medical arrangements, as well as other considerations to ensure your child is well cared for.
Make a plan to suit your situation
Whether you’re married, in a common law relationship, divorced, separated, widowed, or single, making your legal will and power of attorney documents ensures you and your loved ones are protected and your estate is settled according to your wishes.
