Break Up Vs. Divorce - Financial Implications

There’s an old saying, what’s mine is yours, what’s yours is mine. Well, in the case of a separation, this may be the best or worst thing that ever happened to you.

The laws governing common-law break ups are not even close to being similar as divorce. The ring matters...... big time.  I’m going to walk you through some of the major differences between common law and marriage in Canada if your love turns sour.

1. Division of Assets. Upon a marriage ending, there is an automatic right to equalize family property acquired during the marriage. So, the spouse with more money will have to pay the spouse with less money, no matter what. If you are in a common law relationship, however, you don’t have that right or obligation. After a break up, if you felt that you were owed assets from your partner, you have to take legal action and make an “unjust enrichment” claim. In other words, you have to hire lawyers and show that your common law partner was unjustly enriched at your financial expense over the years. This can be very costly and take a long time.

In common law, no matter how long you’ve lived together, you aren’t entitled to half the assets upon separation. In marriage, no matter how much harder you worked, you’ll have to pay out to the other partner

.2. Staying in Your House. Upon a marriage ending, there is an automatic right to stay in the matrimonial home, even if it is not in your name and the decision of who keeps the home remains with the partners. In a common law relationship, if your name is not on the deed, you could simply come home one day and find yourself locked out no matter how much you’ve financially contributed to the home.

3. Spousal Support. If you are married, you have an automatic right to receive or obligation to pay spousal support upon separation. If you are living in a common law relationship, you don’t have rights to spousal support until you have lived together for three years.

Furthermore, if you were married, you always have the right to apply for spousal support, no matter how long has passed since you separated. If you were in a common law relationship, you need to ensure that you apply for spousal support within 2 years of separation or you get nothing.

4. What happens without a Will? If you are married, and your partner passes away without a will, you automatically receive a share of your partner’s estate. If you were in a common law relationship in Canada, you have no right to get anything. Instead, you would have to go through the unjust enrichment claim against your partner’s estate.

There is one aspect where the rules of common law break ups and divorces are the same. Children.

When a couple, married or living together, has kids, the rules for child support, custody and adoption are the same.

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