TIP: Common Law is not the same as Married

Is common law the same in law as being married?

Before I can answer any question about common law relationships, I need to know: are we talking about dividing property, custody and parenting of children, child support, spousal support, income tax related issues, etc.

Most often, the questions from friends are directed at the rules for dividing property. The simple answer is that the law in Alberta for the division of common law property is not the same as the law for dividing marital property. In fact, in some cases, it is very, very different.

One could ask the conceptual question: how is it fair that married people acquire and divide their property under a different set of rules than common law couples. Indeed, why should walking down the aisle make that much difference. Also, if our Charter of Rights and Freedoms is intended to treat persons in similar circumstances similarly, then, shouldn't the rules be the same?

Our legislators and the Supreme Court of Canada have made a decision on this: the division of common law property in Alberta is not the same as the division of marital property. Our highest Court has held that people who actually go through the process of getting married have made a choice to be governed a certain way. The SCC found in the leading case on this subject that there is a fundamental difference between choosing to marry from choosing to live together unmarried. Consequently, the SCC held that the laws for dividing marital property can differ from the rules for dividing non-marital property without breaching any fundamental rights or freedoms.

Critics of the SCC ruling think that the decision ignores the fact that there are power imbalances in relationships and so not all parties to a relationship have necessarily made a 'choice' to be common law as opposed to married.

The point to take away is that the law is different if you are common law. Read on to find out how it differs. But, get legal advice on this point if you plan to live together or are separating.

TIP: Minimum requirement to divide property

The tip today is: marital property must be divided by a written agreement AND each spouse needs a lawyer to sign a Certificate to the agreement confirming that they have given independent legal advice (ILA). Under the law in Alberta you MUST have a written agreement and ILA or you will NOT satisfy the legislative requirements of Alberta for dividing property on a final basis. In other words BEWARE of non-legal services that divorce you and do not divide property or services which provide documents which state that you can divide property using a contract without a lawyer.

If you do not have a properly executed agreement with ILA, you may find out that you have not divided your property and that your spouse still has a claim for half of your assets. There are cases in which spouses have separated, moved on with their lives and started businesses only to find out years later that they must divide the value of their business with their former spouse, because they did not finalize the division of their property correctly. Issues can also arise with selling and financing property (banks like to see separation agreements.) Capital gains taxes may accrue which could have been avoided (CRA likes to see separation agreements.)

The other pitfall occurs if you get a Divorce without considering property division. A clock starts ticking after you are formally divorced which could bar you from applying to divide property after 2 years.

The POINT: Divide property with a written agreement with ILA, and ask questions if you are not sure.

TIP: Always get legal advice

I just attended a presentation on social networking for women entrepreneurs and felt inspired to start a blog. My plan is to post tips for people in Calgary who want some general information about divorce, separating and dividing property that is correct. There is a lot of garbage and sometimes even completely incorrect information available on this topic. So, this is my first tip:

Buck up the money (probably $300 to $700) to have an initial consultation with a lawyer. You can still use other non-legal resources to keep your costs down after a consultation.
You need to do this because:

A. The law is not intuitive: if you try to guess what it is, you will miss things or you may be wrong;
B. The law changes -- things you read or advice from friends may be outdated;
C. The law is simply what our legislators have come up with and our judiciary has interpreted: so it may not resonate with experience or common sense -- it is what it is.
D. Every situation turns on its own facts -- you need someone to tell you how the law will be applied in your situation.
E. Getting divorced does not divide your property. This is separate. Failure to divide your property could leave this issue open to bite you later, or could bar you from dealing with it as a limitation period may expire. You need to know how this works.

The POINT: Get advice from a family law lawyer and get it early.