Upcoming Legislative Changes
On December 11, 2018, the Legislative Assembly of Alberta granted Royal Assent to Bill 28, the Family Statutes Amendment Act¸2018.[1] This act contains significant amendments to the Matrimonial Property Act[2], the act that currently governs property division of divorced couples. The amendments come into force on January 1, 2020.[3] The Family Statutes Amendment Act, 2018 fittingly renames the Matrimonial Property Act as the Family Property Act. The name is apt because under the Family Property Act legislatively dictated property division will no longer apply only to divorced couples—it will also apply to former common-law partners. Considering that over 300,000 Albertans are currently in common-law relationships, and considering the upward trend in non-marital cohabitation, the Family Property Act will have a large effect on Albertan families.[4]
Accordingly, this post has been written to provide a non-exhaustive overview of the law as it currently stands, as well as a non-exhaustive overview of the most important changes coming into effect on January 1, 2020. Please note that the content provided in this post is legal information only, and should not be relied upon as legal advice. If you need legal advice, you should speak with a lawyer.
The Law as it Currently Stands
As the law currently stands, common-law partners (legally referred to as “adult interdependent partners”) who separate cannot rely upon any legislative presumptions concerning the division of their property. Instead, these individuals must rely upon the common-law (i.e., judge-made law) and the frequently used remedy of constructive trust, which is imposed by courts when unjust enrichment has been proven.
Proving the elements of unjust enrichment in court can be expensive and time consuming, and sometimes results in homemakers (and other low-income partners) receiving less property than they would otherwise be entitled to if they had been married and the presumption of equal sharing under the Matrimonial Property Act applied.
The Family Property Act
The Family Property Act streamlines and simplifies the process of property division among separated common-law partners (i.e., adult interdependent partners) by applying the same legislative framework to former partners as is already applied to divorced couples.[5] As a result, when the Family Property Act comes into force common-law couples will no longer need to rely upon the common-law doctrine of unjust enrichment in order to legally divide their property.
Instead, property acquired by either party before the commencement of an adult interdependent relationship will be exempt from distribution upon the dissolution of the adult interdependent relationship; the increase in value of exempt property throughout the duration of the adult interdependent relationship will be distributable among the parties in a manner that the court considers just and equitable (often 50/50); and all property acquired by either party after the commencement of the adult interdependent relationship (with some exceptions, including property acquired by inheritance or gift) will be presumed to be split 50/50.[6]
Will the Family Property Act Apply to Me?*
To determine whether the Family Property Act will apply to you when it comes into force on January 1, 2020, you must first determine whether you are in an adult interdependent relationship, as defined by the Adult Interdependent Relationships Act.[7] According to that act, a person is in an adult interdependent relationship if the person has lived with (i.e., cohabitated in the same residence with[8]) his or her partner in “a relationship of interdependence” continuously for no less than three years; if the person has been in a “relationship of interdependence of some permanence, if there is a child of the relationship by birth”; or if the person has “entered into an adult interdependent partner agreement with the other person”.[9]
A relationship of interdependence is a relationship where the parties a) share one another’s lives; b) are emotionally committed to one another; and c) function as an economic and domestic unit.[10] When determining whether two persons function as an economic and domestic unit, courts consider the following factors:
a) whether or not the persons have a conjugal relationship;
b) the degree of exclusivity of the relationship;
c) the conduct and habits of the persons in respect of household activities and living arrangements;
d) the degree to which the persons hold themselves out to others as an economic and domestic unit;
e) the degree to which the persons formalize their legal obligations, intentions and responsibilities towards one another;
f) the extent to which direct and indirect contributions have been made by either person to the other or to their mutual well-being;
g) the degree of financial dependence or interdependence and any arrangements for financial support between the persons;
h) the care and support of children; and
i) the ownership, use and acquisition of property.[11]
If you satisfy the criteria set out above, then you are in an adult interdependent relationship; and, unless you enter into a cohabitation agreement stating otherwise, the Family Property Act will apply to you if before January 1, 2020 you:
a) have not begun living separate and apart from your partner; and
b) have not become a former adult interdependent partner.[12]
Cohabitational Agreements
Unmarried partners are currently able to, and will continue to be able to after January 1, 2020, enter into cohabitational agreements.[13] These agreements allow partners to specify how property will be divided upon the breakdown of their relationship. Adult interdependent partners have historically chosen to enter into cohabitational agreements in order to avoid the messiness of fighting over unjust enrichment claims. However, once the Family Property Act comes into force, adult interdependent partners will enter into cohabitational agreements in order to avoid the equal sharing presumptions of that act. Importantly, cohabitational agreements entered into before January 1, 2020 will remain enforceable under the Family Property Act to the same extent that they were enforceable before the act came into force.[14]
Living Separate and Apart
As noted above, the Family Property Act will apply to adult interdependent partners who have not begun living separate and apart and have not become former adult interdependent partners before January 1, 2020.
Becoming a Former Adult Interdependent Partner
There are a variety of ways to end an adult interdependent relationship. The Adult Interdependent Relationships Act provides that an adult interdependent relationship will come to an end if any of the following occur:
a) the adult interdependent partners enter into a written agreement that provides evidence that the adult interdependent partners intend to live separate and apart without the possibility of reconciliation;
b) the adult interdependent partners live separate and apart for more than one year and one or both of the adult interdependent partners intend that the adult interdependent relationship not continue;
c) the adult interdependent partners marry each other or one of the adult interdependent partners marries a third party;
d) in the case of an adult interdependent partner who did not become an adult interdependent partner by entering into an adult interdependent partner agreement, the adult interdependent partner enters into an adult interdependent partner agreement with a third party; or
e) one or both of the adult interdependent partners have obtained a declaration of irreconcilability under section 83 of the Family Law Act.[15]
If you are currently in an adult interdependent relationship and you want to become a former adult interdependent partner before the Family Property Act comes into force on January 1, 2020, ceasing to cohabit with your partner as of today will not provide you with sufficient time to become a former adult interdependent partner before January 1, 2020, since the one year “separate and apart” requirement in b) will not be satisfied. However, options a), c), d), and e) all remain as available options to become a former adult interdependent partner before January 1, 2020.
Retaining a Lawyer
As noted above, this post does not constitute legal advice. If you need legal advice, you should speak with a lawyer. The Law Society of Alberta keeps a lawyer directory that can help you find a family lawyer to help with your legal issue(s). It also provides a lawyer referral service, which can be reached, toll-free, by dialing 1-800-661-1095. We would also be happy to speak with you.
References
[1] https://www.alberta.ca/family-law-changes.aspx
[2] Matrimonial Property Act, RSA 2000, c M-8.
[3] Bill 28, Family Statutes Amendment Act, 2018, 4th Sess, 29th Leg, Alberta, 2018, s 9.
[5] Bill 28, Family Statutes Amendment Act, 2018, 4th Sess, 29th Leg, Alberta, 2018, s 2(13).
[6] Bill 28, Family Statutes Amendment Act, 2018, 4th Sess, 29th Leg, Alberta, 2018, s 2(13).
[7] Adult Interdependent Relationships Act, SA 2002, c A-5.4.
[8] Brandenburg v McLeod, 2008 ABQB 406 at para 51.
[9] Adult Interdependent Relationships Act, SA 2002, c A-5.4, s 3(1).
[10] Adult Interdependent Relationships Act, SA 2002, c A-5.4, s 1(1)(f).
[11] Adult Interdependent Relationships Act, SA 2002, c A-5.4, s 1(2).
[12] Bill 28, Family Statutes Amendment Act, 2018, 4th Sess, 29th Leg, Alberta, 2018, s 2(39).
[13] Adult Interdependent Relationships Act, SA 2002, c A-5.4, ss 7-8; Family Statutes Amendment Act, 2018, s 2(37).
[14] Bill 28, Family Statutes Amendment Act, 2018, 4th Sess, 29th Leg, Alberta, 2018, s 2(39).
[15] Adult Interdependent Relationships Act, SA 2002, c A-5.4, s 10(1).
*Note that a previous version of this post stated that an adult interdependent partner could only avoid the application of the Family Property Act if the adult interdependent partner had become a former adult interdependent partner before January 1, 2020. Upon further review of the new legislation and other sources, this post has been updated to indicate otherwise.