McCuaig Desrochers LLP wants to alert you to upcoming amendments to the Matrimonial Property Act. These Amendments substantially change the property rights of people living in Alberta that are Married or in Common Law Couples. As of January 1, 2020, the Family Property Act will be in force in Alberta.
How do these changes affect division of property at the end of a relationship?
The most notable change is that Common Law Couples will be entitled to the same property rights as couples that are married (50/50 division). Before these changes, “Common Law Partners” had to make claims of “unjust enrichment” to prove their property rights which were costly and hard to prove. These claims often resulted in less than 50/50 division of property. The changes will also affect the timing of whenthese property rights (presumed to be 50/50 division) begin. This currently takes effect on the date of marriage. As of January 1, 2020, property rights could start as soon as a couple starts living together, rather than at the date of marriage. Property includes ownership or shares in corporations and is defined very broadly!
How do I know if I’m in a Common Law relationship/ interdependent partnership?
Generally speaking, you are an Adult Interdependent Partner / Common Law if you and another person:
- Live together for at least 3 continuous years, OR
- Live together and have a child (through birth or adoption), OR
- Have signed an adult interdependent partner agreement (a contract that complies with requirements in the Adult Interdependent Relationship Act).
When does it take effect? Who does it affect?
The Amendments have already been passed, but the changes officially come into effect on January 1, 2020. This affects every present and future relationship in Alberta—including people who are already married.
What if I’m already in a relationship?
The Amendments will take effect immediately on January 1, 2020. Any divorce or breakdown after January 1, 2020 will be subject to this new legislation.
How does it affect me if I’m already married?
If you’re already married, the presumption to 50/50 division of your property acquired during the relationship will apply to any property obtained after you first started living with your partner, rather than only applying to property obtained after marriage. This could be a significant change for couples who are recently married but lived together for a long time before marriage. All the property acquired while living together will be presumed to be split 50/50.
What can I do to prepare?
A properly drafted cohabitation agreement, prenuptial or post-nuptial agreement can provide predictability and comfort for any couple living together, whether married or not. In fact, this will be the only way to give yourself certainty and protection with respect to your assets from the effect of this legislation. If you do not have an agreement in place governing what happens to your property in the event of a relationship breakdown, this legislation will apply to you.
These Amendments are a fundamental shift in how common law/marital property rights are treated in Alberta. Couples, whether they choose to marry or not, will have the same 50/50 entitlement to property upon the breakdown of the relationship.
If you have questions or concerns about your rights or obligations, please contact our Family Law Practice Group for guidance and assistance. We can assist you in drafting any agreement to help protect you and your family.