AGREEMENT DRAFTING/ESTATEPLANNING FOR COMMON LAW

RELATIONSHIP CLIENTS

These materials· were prepared by Richard Gibbons,· of Wilhelm Migneault Gibbons & Greenwood lawfirm North Battleford Saskatchewan; -and Michael Ryan, QC of the Saskatchewan Legal Aid Commission,Regina City Area Office Regina, Saskatchewan for the Saskatchewan Legal Education Society Inc.seminar, Advising the "Common Law Relationship" Client; April 1999.

TABLE OF CONTENTS

AGREEMENT DRAFTINGIESTATE PLANNING

FOR COMMON LAW RELATIONSIDP CLIENTS

I.

A. INTRODUCTION Page 1

B. INCOME TAX (RRSP - RRIF'S Pages 2-3

C. CANADA PENSION PLAN Pages 3-5

D. INCOME TAX ROLLOVERS Pages 5-6

II. COHABITATION AGREEMENTS

A. CONSIDERATIONS Pages 7 -10

B. SAMPLE COHABITATION AGREEMENTS Pages 11 - 27

III. ESTATE PLANNING AND LEGISLATIVE CONSIDERATIONS

1. ESTATE PLANNING Pages 28-29

A. PRIMARY RESIDENCE AND HOUSEHOLD GOODS Page 29

B. NAMED BENEFICIARY AND JOINT OWNERSlllP OR ASSETS Pages 29-30

C. INCOME TAX ACT Pages 30-31

D. CANADA PENSION PLAN (CPP) Pages 31-38

E. ENDURING POWER OF ATTORNEY AND DEPENDANT ADULTS Pages 38-39

F. SUMMARY Pages 39

2. LEGISLATIVE CONSIDERATIONS

A. THE DEPENDANT'S RELIEF ACT

B. THE WILLS ACT

C. THE INTESTATE SUCCESSION ACT

IV. INTERPRETATION BULLETINS •

1. IT -307R3

2. IT - 500R

Page 39

Pages 39-45

Pages 45-46

Pages 47-50

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A. INTRODUCTION

Justice Klebuc stated in the case of Baker vs. sm, (1998), 167 Saskatchewan Reports 1S2 in

dealing with the case where there was a cohabitation and a subsequent separation said at page

1S7:

"Marriage like relationships are far more prevalent that they were decades agoand reflect a marked change in social relationships for a large cross section of thegeneral community. Marriages according to tradition and culture have takenplace for centuries in the aboriginal communities of the province. Though theparties provided no specific or social fact evidence regarding the rights andobligations of parties to such relationships (coUectiYely II customary marriages"),the court is aware of the general nature thereof by virtue of the cases before itinvolving the same. In my view the court may rely on such knowledge wheninterpreting statutory provisions .of a general nature. Several of those rights andobligations were considered in Connolly v. Woolrich, 1 C.N.L.C. 10 (QuebecSuperior Court) and IScker y. Pettkus. <19801 2 S.C.R. 834."

The words "former spouse" have not been judicially defined in the context of a"marriage like relationship" often referred to as a IIcommon law marriage II orIIcustomary marriage". When used. in connection rec'ognized under the MarriageAct, 8.S. 1995. c.M-4.1, they contemplate a person whose maniage has beenjudicially dissolved or ammlled and not mere separation or estrangement. Whilemany statutes and the common law recognize specific rights and obligationscreated by specific common law relatioDShips, none prescribe procedures fordissolution thereof or recognize the status of "former spouse" .

Davis. Family Law in Canada, (Toronto: Carswell 1984) addressed bow suc~ relationships are

effectively brought to an end at add pages 204 and 20S:

.. .. to live together in a conjugal relationship means to live together as husbandand wife, to live together in a "marriage like relationsbip", Such a relationship,once commenced, comes to an end when either pany regards it as being at anend, and , by his or her conduct, bas demonstrated in a convincing manner thatthis particular state of mind is a settled one·.

Justice Klebuc conclu4es that " ,•.the status of a spouse is created and sustained solely by the act

of continued cohabitation with no rights or obligations extending beyond unless specifically

created by legislation".

Page 2

B. INCOME TAX ACT (RRSP and RRIF)

The defInition of spouse in Section 2S2(4) of the Income Tax Act states that:

In this Act, (a) words referring to a spouse at any time of 8 tax payer include theperson of the opposite sex who cohabits at that time with the tax payer in aconjugal relationship and (i) bas so cohabitated with the tax payer throgh out a12 month period ending before tbat time or (ii) would be a parent of a child ofwhom the tax payer would be a parent.

It would seem that: for the purposes if the Income Tax Act a person residing in a common law

relationship who meets the criteria under the act would be capable of receiving a contribution

to a Registered.Retirement Savings Plan so that the tax liabilities would be deferred until the

surviving partner withdraws these funds or passes away. Likely, similarly, Capital Assets which

have increased in value and which attract Capital Gain on death may well be assets that one

could transfer to a common law spouse ifone was so disposed. This is based on the assumption.that the assets do not qualify for any Capital Gain exemption. The basis of the tax in estate

planning issues would be that a tnmsfer of assets to a common law partner would be for the

purpose of keeping a tax liability to a minimum. All of this is predicated upon a continuing

common law relationship.

If the common law spouse predeceases the testator in an estate matter. then consideration should

be given to the definition of child in the Income Tax Act. Section 252(1)(c) prOVides that a child

of a tax payer includes IIa child of the tax payers spouse".

Therefore, it is possible to transfer contributions to an RRSP to a child of a deceased common

law spouse if the requirements of the Income Tax Act are met. The requirements include that

the stepchild must be dependant of the testator. This of course would be a question of fact.

Under Section 146(1) of the Income Tax Act a stepchild would be deemed not to be financially

dependant on the deceased at the time of death if the income of the stepchild for the precediDg

year exceeds the basic personal exemption. If the stepchild is over 18 years then of course the

stepchild must be dependant due to a physical. mental or other disabilities.

Page 3

If the stepchild meets the requirements, the contributions to an RRSP can be transferred to the

stepchild on a rollover basis. If the financially dependant child is not dependant by reason of

physical or mental disability the fund must be paid out to the stepchild before they attain the age

of 19 years. A stepcbild who is dependant due to a physical or mental disability can transfer

the funds to their own RRSP or purchase a life annuity to age 90 years.

The reader should review the Interpretation Bulletins IT - 307R3 and IT - 500R

c. CANADA PENSION PLAN

Under the Canada Pension Plan Legislation (Revised Statutes of Canada 1985 Chapter C-8) a

pension may be payable to the surviving spouse of a deceased contributor under Section

44(l)(d).

"Spouse in relation to contributor means:

1. If there is no person descnDed in subparagraph 2, a person who is married

to the contributor at the relevant time, or;

2. A person of the opposite sex who is cobabitating with me contributor in

a conjugal relationship with the relevant time having so cohabited with the

contributor for a continuous period of at least 1 year..•"

In the case of the contributors death, relevant time means the time of the contributors death (Sec

2(1». Therefore, the amount of the surviving spouses' pension will depend on a number of

factors which would include how much and for how long the contributions were made. the

surviving spouses' age when the contributor died and whether the surviving spouse receives any

cpp benefits.

It is important to realize that the potential exists for competing claims to a surviving spouses'

pension. It is easy to imagine a situation where a deceased contributor was living in a common

law relationship but bad not divorced a previous married. spouse.

Page 4

An application by a surviving common law spouse must be made to the Canada Pension Plan

upon the death of their partner. It is not paid automatically (Sec.60(l». The failure to apply

for the benefit within one year of death will result in loss of benefits as Canada Pension Plan

is only prepared to make back payments for up to 12 month. One should note that a surviving

spouse can not become entitled to more then one surviving sppuses pension. If a person has

been widowed more than once only the larger of the surviving spouses pensions will be paidt

not lxltb (See Sec 63{6}).

A subsequent marriage does not result in a loss of entitlement to a surviving spouses pension

already being received (See Sec 63.1). Similarly upon separation or death common law spouses

can apply to split canada Pension Credits which accrued during the period of cohabitation (Sec

55).

The method that Canada Pension Plan uses when calculating the period of cohabitation is to

include the full calender year for the year the spouses began living together and not to include

the calender year for the year that the parties separated.

The rule used by Canada Pension Plan is that common law spouses must have lived together in

a conjugal relationship for at least 12 months to be entitled to apply to split Canada Pension Plan

Credits. Application must be made within the earlier of 4 years from the date of separation or

3 years from the date of death (Sec 55.1).

A provision exists within the Canada Pension Plan to allow a retirement pension paid to a

contributor who is at least 60 years of age and satisfies all the requirements to equalize a

payment with their cohabiting common law spouse who again must be 60 years of age. This

would allow common law spouses to effectively income split the entire retirement pension

received from Canada Pension Plan presumably because of a large discrepancy in the amounts

received by the parties. The restriction in that is the panies can not share the portion of the

pension which was earned outside of their period of cohabitation. If one of the parties passes

away the surviving spouse will revert back to the full amount of their previously received

pension.

PageS

It is important to note that the orphan's benefit paid under Section 42(1)(f) is available to the

orphan of a deceased contributor. Section 42(1) <1efmes a dependant child and this deimition

it should be noted is wide enough to include both natural bom children and children who were

in the custody and control of the contributor prior to his death (See Sec 42(1».

D. INCOME TAX ROLLOVEKS

A tax free transfer may be made to RRSP or an RRIF of a common law spouse on the

breakdown of the common law relationship. Section 146.3(14) provides tbAt amounts

transferred from a RRIF to a RRIF, or a RRlF to a RRSP or a RR1F of the spouse or fonner

spouse pursuant to court order or written separation agreement on marriage breakdown are not

considered received by the transferor thus enabling them to transferred on a tax free basis. The

expansion on the definition of spouse in Section 252(3) and the amendment in paragraph

146.3(14){b) is intended to refer to other conjugal relationsl)ips in addition to marriage.

section 73(1) allows the tax payer to accomplish an automatic. inter vivos tax free roll over for

transfers of Capital property where a tax payer transfer such property to spouse. a qualifying

spousal trust, or to a fonner spouse in settlement of rights arising out of the marriage. The

following conditions must be met:

1. The property must be Capital property (that means anydeprt?iable property of

the tax payer and any property. any gain or loss from the disposition of which would be

a Capital gain or a Capital loss.

2. Both the transferor and transferee must be residents of Canada and the transferee

must be either a spouse, a qualifying spousal uust, or fonnal spouse and the transfer

must be in settlement of rights arising out of the marriage.

The transfer must be reported to Revenue Canada in the tax return of the transferor in the year

of the transfer.

Section 73(1.1) provides tbat where by the operation of Provincial law or by a judgement of a

court a transferee spouse or a former spouse acquires or is awarded a property that was or would

have been Capital property referred to in Section 73(1) the property is deemed to be Capital

Page 6

property which has been transferred by the transferor. This provision ensures that Section 73(1)

will apply when the tax payer does not make an actual transfer of property but rather title to the

property passes by virtue of Provincial legislation or court order.

Where Non-capital property transferred between spouses or former spouses in settlement of rights

arising out of a marriage, there is no corresponding roll over available. Accordingly, if the

spouses are still married the provisions of Section 69 would apply which states that generally

where a tax payer transfers property to a person not dealing with a tax payer at arms length or

for no proceeds or for proceeds less than the fair market value of transferred property, the

transferrer is deemed to have received proceeds equal to the fair market value of the property

(See Sec 69(1)(b)). There are provisions under Section 85 for transfer of capital property to an

eligible Canadian corporation.

II. COHABITATION AGREEMENTS

Assuming as McLachlin J. stated in Peter v. Beblow, that there is a two fold requirement for the

imposition of a constructive trust:

"... In order for a constructive trust to be found, in a family case as in other cases,monetary compensation must be inadequate and there must be a link between the servicesrendered and the property in which the trust is claimed".

Furthermore:

"The courts should exercise flexibility and common sense when applying equitableprinciples to family law issues with due sensitivity to special circumstances that camarose in such cases".

Thusly the family law practitioner when advising a client has to be aware that the principles of

Peter v. Beblow do not constitute any limitation on the ability of a constructive trust in the

context of the family relationship. The court is appears retains the ability to impose a

constructive trust whenever it considers it to be suitable remedy in the circumstances.

Page 7

If there may be no need for a link to be established between the contributions and the particular

property on which the trust is imposed, how does one in an agreement import the law ofcontract

and avoid the law of trust.

In some forums if there is any link, direct or indirect, between the common law spouses'

contribution of money and or labour and or other contributions. the courts will create a

constIUctive tnlSt of property that was acquired during the relationship. The supposed link

requirement is so general and vague that it is little more than a way for courts to implicitly

express their conclusion about whether or not a consttuctive trust should be imposed.

While there is considerable argument for the proposition that legislatures of the province should

clearly and explicitly set out the benefits for nonmarried persons rather tban resorting to the

unstable, unusual and sometimes inequitable doctrine of Unjust Enrichment and the Associated

Remedy of Constructive Trusts. the issue arises as to what the practitioner can do to protect a

client who is entering into such a relationship and who desires advice as to how this can be

accomplished without litigation.

1. General Consideration for Cohabitation Agreements

(a) It is difficult to generalise for all of the domestic arrangements, understandings and

fiDancial considerations that will be required for each individual situation. Usually party wishes

to contract out of rights or to create rights or create a combination of the two.

It's important to encourage the client to discuss their goals and ideas with the other spouse

before the drafting begins. Couples need to consider and articulate their expectations and to

formalize and generalize the general understandings that the parties have bad and have not had

in the past. The parties need to come up with a basic framework for their agreement and they

often need the assistance of counsel to create a framework and work through the framework into

the details of the arrangement.

Page 8

If the parties come to a relationship with few assets and wish to share future earnings as property

is acquired throughout the relationship joint title and basic estate planning are mandatory but

may not be sufficient. They may want to provide for the division of joint property in the event

of separation or establish rules for the method of division.

Clearly establishing the rules for the method of division or establishing the actual method of

division bas to be the goal of the agreement drafter. Like all prenuptial agreements, the parties

have. to conceptualize the separation or death of one of the parties and what arrangements can

be made for property division if that should occur.

Even where the parties hold assets jointly, it should be confmned in writing that they wish to

share assets in accordance with the title. This should disentitle one parmer from obtaining an

interest on the basis of resulting or constructive trust. The~ is a presumption that arises from

joint ownership in joint property and you may wish to dispel that presmnption by putting in

writing the intent and the plUpOse of the agreement. Since intention and promises are essential

to a proprietary estoppel. an agreement in writing should defeat equitable claims.

At a minimum. couples should have a cohabitation agreement which addresses the issue of

spousal support. Spousal support rights can be imposed by an agreement and this issue should

be dealt with failing which litigation will almost necessarily follow.

(b) It is suggested that the following suggested clauses should be considered:

(i) A recitation of the background of the relationship of the parties.

<ii) A recitation of the parties relationships. roles, employment, income, assets and

the purpose of the agreement as the parties see it.

(iii) A acknowledgement that legislation does not recognize the agreement but it is the

intention of the parties to limit their relationship by the terms of the agreement.

(iv) Provide that the agreement is intended to survive and protect the parties from any

changes or further developmems in the law .

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(v) State that it is the intention of the parties to invoke the law of contract of the

province.

(vi) Conflml that the parties are not legally married and confmn that in the event of

marriage the agreement will continue to apply to the relationship thereby excluding the

applicability of the laws of the jurisdiction dealing with division of property, etc. on

marriage.

(vii) Property and support issues must be specifically addressed as a minimum.

(viii) Wavers must anticipate future changes in the law and general leases and estate

releases must be drafted with this in mind; they should be exhaustive, they must deal

with separation as to property; they must deal with no trust claims 01' other unjust

enrichment claims or other equitable claims; title governs. Gifts to be joint or excluded.

(ix) Consider putting in references to statutes to include later amendments or successor

legislation.

(x) Consider whether the agreement should operate on death. Consider whether the

properties want to address the sharing or responsibility for current expenses.

(xi) If the properties rent accommodation, consider whose name is on the lease and

upon death of either of the parties what rights should flow.

(xii) Consider division of household contents and personal effects. Consider reference

to wills, elections under the Income Tax Act, Powers of Attorney, and health care

directives and that they should be executed the same time as the agreement.

(xiii) Consider whether you want a. court to determine the validity and enforceability

of the agreement or whether you wish to proceed to mandatory arbitration provisions and

if so what provision would apply.

(xiv) Consider a defmition of indemnity or liquidated damages for breach of the

agreement which should also include a reference to legal fees. The agreement should

contain a detailed severability clause. Ensure tbat complete thorough fInancial disclosure

takes place at the time of the signing of the agreement.

For an interesting review of a family law precedent under a marriage/cohabitation agreement see

the clauses set out in the family law agreements (Annotative Press) by the continuing Society of

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British Columbia (June 1998). Copyrights prevents the draft agreement from being produced

with this material. The material is available from the Law Society Library.

For an interesting discussion of a Saskatchewan Court of Appeal decision where an oral

agreement between a common law husband and wife was entered into evidence contradicting or

altering the written cohabitation agreement. Cbrispen v. Topham, 59 Saskatchewan Reports 145,

9 R.F.L. (3D) 131, (May 26, 1987).

The court upheld a cohabitation agreement without independent legal advice in Wells v. Sinker,

(1994) 0.1. No. 1256 April 29, 1994 (Ontario High Court). See also Hala v. Gidney (1993)

N.S.I. No. SOl (Nova Scotia Supreme Court).

See Cormier Estate v. Bourque (1998) N.BJ. No. 470 (New~nmswickCourtofQueensBench)

where the court detemrined that the domestic contract was null and void because the agreement

was discharged by mutual intent, by attempts of ~nci1iation, by mutual breech and by

supervening circumstances. Further, one side did not comply with his fmancial obligations

under the agreements.

See Retlaff v. Gabouny (1996) B.C.I. No. 2687 where the British Columbia Supreme Court

held that cohabitation agreements should be upheld in the absence of duress, undue influence or

unconscionability.

Note in Sigyardsen v Stanley (1996) B.C.I. No. 1429, the British Columbia Supreme Court

determined that the defendant could not rely on the cohabitation agreement because the plaintiff

signed without the benefit onegal advice and the defendant lived off the plaintiff's income rather

than obtain separate employment. Furthennorc the agreement was mutually rescinded when

their conduct after executing the agreement was inconsistent with its tenDS. Similarly, in~

v. Bird (1994) N.S.l. No. 591 the Nova Scotia Supreme Court determined that the court was

correct to rInd that a lack of independent legal advice combined with the respondent's lack of

understanding of the agreement was a proper basis for enforcing the tenns of the agreement.

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Page 11

AGREEMENT 2: COHABITATION AGREEMENT

In this sample cohabitAtion agrmnmt, aJJ property is sqxtratt Mnkss it iJ~tmdas co-ovmed or the patties otJwrwise4gt#: the nonoO'lmingparty """ ptn'ChltH antqN4i jn'~~t in thefamily rtSidence; and the agreement tlmnilWtfS on mtI~gt.

THIS AGREEMENT i.s dated August 4, 1998 for re£erC11ce. [6.!, Version 2]

BETWEEN:

.Albert Baker3412 Willoughby St.ViCtoria. B.C.

rAlbertjAND:

KcrryReid04321 Woodburn Ave.Victoria. B.C.

("K..errY') [6.2, Version 1]

WHEltEAS: [6.3]

A. Alben and Kerry have lived together siou J\Ily, 1996, and intend tocohabit in the future. [17.3]

B. (1) This Agreement

(a) is a. cohabitation agreement, and [17.6]

(b) is not an agreement within the meao1nC of s. 120.1 of theFItnUL, RtI4tions Act. [17.9]

(:2) The intention of the panies in snakinc this Agreement is to preventParts 5 lU'ld 6 of the F4U1Iiiy Relations Act{rom applying to them ortheir rdatiooship. [17.9]

C. Albert is 46 and divorc:ed. [17.10]

D. Kerry is 38 and separated.

JUNE/98

From:

FAMILY LAw AGf'EEI'1EN'!"S 510.-25

Family Law Agreements: Annotated Precedents; The Continuing LegalEducation Society of British Columbia. June 1998 (PB98899).

Reprinted with permission.

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Albert has no children or dependants. [t7.1 t]

Kerry has custody of Patrick Reid and Barbara Reid C'Kerry'sChildren"), who an children from ~ earlier marri~e, by a separationagreement made August 1, 1995, and receives support of $650 per monthfor the children from the biological father.

(1) Albert's gross annual income is S60,000 ~d is received fromemployment as a mortgage appraiser with the TruSt}' Bank. [17.12]

(2) Kerry's gross annual income is $66,000 and is r~cived fromemployment as an elementary school principal with the VictoriaSchool Board.

(3) kh party has adequate independent means of support.

(1) The parties anticipate residing, at least initially, in the r~denceowned by Albert located at 3412 Willoughby St., Victoria, B.C.• butthe parties may purchase a new residence together in the: future.[17.13]

(2) The residence where the partics ordinarily reside together at anygiven time is the "Pamily Residence-.

(I) Albert owns the property and has the liabaities listed inSchedule A. [17.15, Version 2]

(2) Kerry owns the property and has the liabilities listed in Schedule B.

(3) The patties do not have joint property or joint liabilities.

(4) For coDVe&ence, specific assets or liabilities in this Agreement arerelerred to by the labels used in the Schedules. [6."1]

Kerry expectS to inherit Kerry's mother's estate on the mother's death,.hich may have a value exceeding S25O,000. [17.16]

The parties are entering into this Agreement 'to [17.17]

(a) determine ownership, maDaiement, ud division of allproperty either or both of them own or may acqui.re

m durin& the time they live together,

(ii) after their relationship ends, and

[liij if one of them predeceases the other while they are stillliving together.

JVNE:~8

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(b) specify their intentions about the \!pbringidg and education ofany children they may have,

(e) determine support obligations should the panies' rdationshipend, and

(d) avoid acrimony and litigation in tbe unlikely tvfnt that theirrelationship ends.

L. (1) The patties are aware that the law provides for judicial interventioni.n some circumstances if this Agreement is found to be unfair nowor in the fut\U'e. [17.19]

(2) The parties wish to confirm tbat

(a) each of them relies on this Agreement to be enforcedaccording to its terms,

(b) neither of them would have entered into this Agreement, orcontinued their relationship on the basis of it. had it beena.ctic:ipated that the other would ever apply to vary meAgreement, and

(c) either of them may choose not to p\lrsue economicopportunities because of their relationship but each partyrecognizes that certain sacrifi.ces will be made within. andbecause of, the relationship, and the COnseqUCDCes of thosechoices wiD. OOt be used to avoid the terms of tbis Agreement.

(') The parties acknowledge that IlaCh of them is prepared to abide bythe tUlD$ of this Agreement because each retop1izcs tha

(a) the imponance to each of them of being able to rely on theAl1'eement far outweighs the risk that it may operate unfairlyat some future date. and

(b) the impossibility of returning th~ parties to the pos.itiODS theyoccupied before they entered this Agreement would make anyvariation. however fair viewed solely in the chanpdcircumstances, unfair on the whole because all dealincs withtheir property dyting the course of their .relationship will havebeen based on the binding na.ture of this Agreement.

IVNEl98

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Albert and Kerry .Jgree that: (17.20)

iRL~ OF RECITAI..S

1. (1) Alben 'Warrants that the statements off~ contained in rce:itals A,B, C, E, G(l) and (3), H, I(I}, (3) and (4). K, and L are true, andackno'llrledg8 that Kerry is relying on them. [17.21]

(2) Kerry 'Warrants that the statemenu of fact contained in ree:itals A,B, 0, F, G{2} and (3). H, tel), (3) and (4), J. K, and L are true, andacknowledges that Alben is relying on them.

WHEN AGREEMENT IN POllCE

2. This Agreement

(a) takes effect 'When the l2st patty signs it, [t7.2~t Version IJaM

(b) tc:l'DlinaI:f5 iithe parties nwry. [11.25, Version 11

REVIEW OFAG~'T

3. (1) The patt~ will review the tenD$ of Ws Agreement, and may agreeto vary or amend it, [17.2....J(a) if they have a child, or

(b) in any event, by May 31st of every second year, with the fustl'C'V'iew to take place by May 31st, 2000.

(2) If the panies do not review the Agreement as provided undersubclause (1), or teViA the Agreement and do not a.m.end or reviseit, both parties an deemed to coDJider that the terms of theAcreement continue to operate fairly.

SUPPORT Dt1RING RELAnONSHlP

4. (1) Subjea to lRIbclause Coif). during their relationship, each pany will be~£·suppot'tiag" [17.32]

(2) Kefl)" will have $Ole financial capoDsibility for Kerry's Children.[17.33]

(3) Albert will not S'Cartd in the place of a parent to Kerry"$ Children.£17.31]

SA·28 SAMPLE AGREEMENTS COMABI'rA'!ION AGAEeMEi'lT JI.INI:/98

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(4) If the parties have a child, Kerry will give priority to looking afterthe child over employment unm the ~hiJd rcacha age 12 and,[17.32]

(a) ifKerry is dOt employed, Alben will be wholly responsiblefor k.erry's support. and

(b) ifKerry is employed and Albert's income exceeds Kerry's,Alben will contribute to Kerry's support to equali1e theirrespective incomes.

BANK ACCOUNTS .

5. (1) Alben and ~r:ywill m.aintain separate bank ac:cOUDts and jointbank accounts. [17.39]

(2) Separate bank accounts ....ill remain tbe owner's separate property.

(3) Joint bank ateounts will be true joint accountS $0 that the ballUtUin any:such account will at the death of one of the parties belong tothe survivol'.

RESPONSlBlUfY FOR PERSONAL DEBTS6. Alben is solely responsible for paying the personal debts and liabilities

dactibed in Schedule A. [17.40]

7. Kctty is solely responsible for paying the pe1'$ODaJ debts and liabilitiesdacribed in Schedule B. [17.«)]

8. (1) Neither pany will. without the written COJUellt of the other patty,use funds from the parties' joint savings to pay personal debts.

(2) Albert will indemnify Kerry for any~~ or loss Kerry incurswith respect to Albert's current and futUre debts and liabiliti($.

() Kerry will indemnify .Albert for ally expease Or loss Alben incurswith respect to Kerry's current and future debts and liabilities.

9. Neither party is the agent of the other and nejther will.represent to bethe agent of the other. [17.41]

JUNl;/98 ~AMILY LAW AGREEMENTS 511..29

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SEPARATEPROPEATY

10. (1) Except as otherwise provided in this Agreement, (17.42}

(a) all property acquired by Albert: before the relationshipcommenced is Albert's separate property and will remain 50

after the ttlationship ends, and

(b) all ptopcnyacquired by Kerry before the relationshipcommeno:d isK.erry's separate propeny and will remain Soafter the .relationship ends.

(2) The property referred to in subclause (1) includes

(a) any income produced by the property,

(b) any increase in value of the property, and

(c) any propcny acquired in exclw1ge for the property or with

(i) the proceeds from sale of the property or itS substitute,Ot

fJ.i) the incomeprod~ by the property.

WlNDFAUS

11. AU inheritmc~ windfalls, gifts, or damages for personal injury receivedbyeither party before or during the relationship, or after it ends, are theseparate property of the recipient. [t1.45]

GIFTS nOM A THIlU> PAltTY

12. Unlesa a third party specifically provid!!s to the contrary, [17A7J

(a) a gift from the third pany is tile recipient's separue property,

(b) a gift from a third party .ho is a parent or close relative ofODeof che parties is deemed 10 be a gift to that party, and

(c) a gift from a chirdpany that is used as a down payment for thepu.rc:hase of land or a residence

(1) is trac:eable into the purchased property and anysubstit\ltt for it, and

(ii) remaiD$ the sepal'ale property of the r«:ipient.

SA-10 SAMPLE AGtlEEMEN"S COHAB'T"'TiON AGREEl'1ENT JUNE/91l

Page 17

lUGIfi'TO DISPOSE OF SEPARATE PROPERTY

13. Either party may acquire or dispose of sepata~tproperty without theconsent of the other. [17.40(6)]

SHA1\ED PROPERTY

14. (1) Any property acquired by a party during the relationship is theseparate property of the party .ho acquired it, unless[17.43, Vmion 1/17.51]

(a) it is registercd. in both parties" names, or

(b) 'the parties record in 1rritinc that it is co-owned.

(2) For the purpose of this Agreement, ·Shared Propet1:y· meansproperty owned hy both parties.

(3) Unless the parties othercrise agree in writing, ownership of SharedProperty will be in the same proponion a5 lhc contribution madeby each patty to the purchase.

(~) For the purpose of suhclaute (3), "a>ntrib1.ltion· means a direct •financial contribution and does not include value for labour unlessot~ise acrecd in writing.

(5) H Shared Property is Dot registered in the names ofboth panies. theregistered owner holds the interest of the other in the property. asclftcrmiJled under subc1auses (3) and (4), in trust lor the other.

(6) Neither party will pledge Shared Property as security for uyliability without the written cOnSCDt of lhe Other party.

(1) Neither party willdi~ of an inteR$t in Shared Property withoutthe written consent of the omer pmy.

(8) When Shared Property a sold, the net proc:eed$. if any, will bedivided. between th~ parties in proportion to their ownership as~ermined under subdauses (3) and (4).

PLANS

15. (1) While their relationship continues., [t7.52)

(a) Albert ..ill maintain Kerry as the beneficiary of the narvivorbeaefits of Albert's PensioD and of any other pension Albutbas Or acquires during the relationship, and

JUNE/'}8 ~AM1L'Y LAW A~REE"'ENrs $1..31

Page 18

(b) Kerry will maintain Albert as the beneficiary of the survivorbenefits of Ktrry's PensioD and of any other pension Kerryhas or ac:quilU during the tdationship.

(2) Despite subclause (1), if the partits' relationship ends, each gives upforever any claim to an interest in any pension owned by the otherand will do everything reasonably necessary to assist in changingthe beneficiary designations.

16. (1) Subject to subclause (4). Albert will maintain life uuwance onAlbert's life for Kerry jn the minimum amount of 5150,000.

(2) The oblipion under subclause (1) may he satisfied by dcsisnaclngKArry to be the irrevocable beneficiary of Albert's Group Lifelllsurance under 5. 49 of the /7ISU1'1Irsa Act of British Columbia.

(3) IfAlbert dies before the obligation to maintain life insurance under~ause (1) ends, and Kerry does not receive a minimum amountof $150,000 from the insurer, Alben's estate mwt pa.y to Kerry$150,000 leA any amoUQt Kerl'}' receives from the iAsurer.

(4) If the parties' relationship ends. Alben's obligation to maintain lifeinsurance under subcla~ (1) ends and Kerry will do everythingreasonably AectSSaI'y to allow Alben to chan;e the beneficiarydesignation. [17.53]

17. (1) Subject to subclause (4). Kerry will rnaintam life insurance onKerry's life for Albert in the minimum amou.o.t of 5150,000.

(2) The obligation under subclause (1) may be satisfied by de$lgl'WingAlbert to be the irrevocable beneficiary ofKerry's Group LifeInsurance \U2dcr 5, 49 of the Insurance Act of British Columbia.

(3) If Kerry dies heEem the obligation to maintain life iasurance undersubda\lSt (I) ends, aad Alben does not receive a minimum aznoumof $150,000 from the insurer, Kerry's estate must pay to Albert$150,000 less any amount Albert receives from the insvrcrr.

(4) If the panift' relationship ends. Kerry's obligation to maintain lifeinsurance under subclause (1) ends and Alben will do everythingreasonably necessary to allow Kerry to change the beneficiarydesignation. [17.53]

Page 19

FAMILY RESIDENCE

18. Upon the paymen~ of $20,000 by Kerry wAlbert:

(a) Alben will transfer titl&! to the Family Residence inIO ~hc

names of Kerry and .Albert in equal shares as ttnants jnconunoc, [17.57]

(b) the parties ~i11 assume as joint COVI!l1at1tors thl: Trust)' BankMortgage Oc the Family Residcc<::e, and

(c:) despite da.usc 14, if the relationship ends, the FamilyResidence "ill be sold acd the parties will divide: tht! netproceeds ~ually bet_ceQ them.

19. IfKerry docs DOt acq\lic~ an interest in the Family Residence in~rdance with cla~ 18, the Family Residena will remain Albert'sseparate property during the relationship and after it ends. [17.54]

20. (1) If the panjes's relationship hM not ended '\IV'ben thef1tSt of themdies (the -neceased Spouse-). and the survivor (the "SW"YivingSpouse") is not the sole owner 01 the Family Residence, theSurviving Spo~ is entitled to reside in the Family RaidetlQ:rent-free for a! long ~ the: Survivin& Spo\lSe wishes on the following'terms: [17.62]

(a) while the Surviving Spouse contil1\1C$ to reside in the FamilyR.esidence, the Surviving Spouse will pay all taxes. insurance,water and sewer expenses, and :ill CO$t$ of maintaining the:Family Residence CEept for major repain required to preserveit,

(b) the Surviving Spouse and the mate: or the~~Spouse.ill share equally the eosts of major repail'$ required topresel'VC th~ Family Resi~e, such as roof and ex:ceriorrepairs, exterior painting, and nu.;or plumbini or elcctric:alrepairs,

(e) if the Surviving Spouse no longer wishes to mid«! in theFamily Resi.dence::

(i) the Surviving Spouse will nOIUy tbe personaltepresentatiVt: of the Deceased Spouse in writing, and

(u) the personal representative of the DcteaSed SpoUK willlist the Family Re$idence for sale and have conduct of thesale,

JUNEr'8 ~AMI~~ LAW AGAEIH1ENTS SA.J)

Page 20

(d) if the Surviving Spoust dies while Still residing in the FamilyResidence, the personal representative of the Deceased Spousewill list the Faznily Residence for ule and have conduct of thesale.

(e) after the Surviving Spouse dies Or vacates tbe FamilyResidence, all expenses .related to the: Family Residencei[etni~ in paragraphs (a) and (b) will be the equalresponsibility of the registered owners of the Family RC$idmc:e(or their estates) until the Family Residence is $old, :and

(ij the net proceeds of sale of the Family Residl!nce will bedivided equally between the registered owners of the FamilyR.esidence (or their estates).

(3) When this Agreement is signed, each party will execute a will, or acodieU to an existing will, to give: eHeec to the proYisions withrespect to the family Residence set out i11 this da1.lSe.

(4) H the will of the D«cased Spouse does not <:ontain the testamentarybenefit required by this clause, the estate of the De«ased SPOllKwill be liable to the Surviving Spol.l$C in debt in the amount equal tothe present value that the·Surviving Spouse"s life: estate in theFamilyResidence would have had at the date of the death of theDeceased Spouse.

IF nf£RELATIONSHIP ENDS

21. (1) For tht purpose of this Agreement, the relationship will be deemedto have ended 00 the fitS'C of the following events to ocC\1t: [17.63]

(a) the parties live separate and aplU:'t for a oontinuous period ofmore than 90 days,

(b) the date a court grantS an order recognW.JJg that the parties'relationship h. ended, 01."

(c;) me date a party delivers a written notice 1:0 the other that therelationship is terminated.

(2) The parties' relationship will not be deemed to have ended as aresult of a mere geographical separation for mote than 90 days,

II"iNE/98

Page 21

NO SUPPORT IF RELAnONSHIP ENDS

22. (1) Subject to subsection (2), if the panies' relationship ends,notwithstanding any change of circumstances no matter bowunforeseen or radical: [17.37]

(a) neither party will claim

(I) interim or permanent support frotn the other, or

(in compensatory support from the other ba5ltd on actual orperceived economic prejudice suffered by reason of therelationship, and [17.38 ]

(b) each. party gives up lorrver any claim for support agaiml theother.

(2) Subseaion (1) does not apply if tiM! parties have a child.

NO CLAIM TO nIE OTHER'S PROPERTY IF 1HERELATIONSHIP ENDS

23. (1) Neither party will claim an interest in, or a right to com~ionwith resptCt to, the propetty' of the other and, without I1Dliting theJenerality of the foregoing, neither will make such a claim based 011

(a) the law pertalning to trusts or unjusl cnriclunmt.[11.66, Version t]

(b) the Family R~lAtions Aet or similar legislation whether or notthe property was used for a family purpose. or

(c) any direct or indirect contribution to propeny owned by theother whether or DOt savings occurred through effectivemanacemenl of the household, or childraisinr; responsibilities.[17.66, Version 2]

POWEaS OF ATTORNEY, ETC.

2.... (1) If the parties' reb.tiooship ends other than by the~ of a patty:[17.(9)

<a> each party ."ill immediatel)' deliver up 'to the other anydocumel1t, suc:h as an advance dir«:tive.living will, or powerof attoJ'ney, ill that persoo's possaSiOD that confers authorityon the person to aa on behalf of the other,

jUNtl98 F,il.MJ:..Y LAW A::;REEMENTS SA.·]S

t'age 22

(b) neither party 'Will rely on authority confeffed by the otherparty to aa on behalf of th~ other party,

(c) ~ of the parties will revoke. a.l1d the other will (;()-operate tothe extent necessary,

(1) beneficiary designations in f,.vour of the other in anyinsurance policy or plan, and

[.Ii) any testamentary disposition in favour of the other, and

(d) a pan)' .ho receives a benefit or power from the other under adocument ex.eaucd. before the relatiol1ship ends will hold tbebenefit or power in trust for the other, or the other's CAatC.

DISPUTES

25. (1) If adi~ute arises concerning this Aveement, the parties will usebest effons to resolve the dispUte through mediation before takingtOUlt proceedings. [16.12]

(2) The parties wish to have Hazel W. Smithe-IoOoes act as mediator.

(3) IfHaul W. Smithe-]ones'is lIJIable to act 3$ mediator and theputies eannot agree on another mediatDr, K.erry will select themediator.

(4) The parties will uc:h pay halfof the (Oft of mediation.

(5) If the parties cannot resolve an issue tbat has beeD. the subject ofmediation, they will

(a) request the mediator to certify that mediation has failed on. aparticular issue before star.inl a court proceeding inconnection with the \1nnmlved iasue, and

(b) fale the certificate wilh the court.

(6) If either patty refuses to rnediatc a dispute, the Other party may takefurther proceedings to resolve the dispute, including l:Ourt

pro<leedings.

(7) If court proceedings are required to resolve a dispute in thecircumstances referred to in subclause (6), the party who tefused tomediate must pay Sl,ooo to the other party as a contributiontowards tbe legal fees incurred by the other party.

Page 23

(8) A patty who makes a coun application with respect to any issueaddressed in this Agreemcnt will give the othcr no less than 1. days'notice of the application.

26. Unless the parties othenvise agree

(a) the la. of British Colwnbia applies to this Agreement, and[16.1-4) Version 1J

(b) subject to clause 25, the Supttm.e Court ofBritish Columbiahas exclusiYe jurisdiction over this Ageemcnt.[16.15, Version 1]

27. If either patty tMa any proceedings with respect to the property of theother or respoosibllilies to each other, this Agrecotent

(a) may be filed or exhibited in the proc:eedlngs, and

(b) will be raised as a defence to, and form the basis of II consentorder in relation to, any iClaim made in th~ pr~s.[16.10, Version 1]

GENERAL CLAUSES

28. This Agreetnent beneUcs and binds the panics aDd their~ and_gus. [16.4.1]

29. POl' tbe purposes of interp.retatiol1, neither pan,- drafted this Apeementand its words~ the words of both parties. [16.34)

30. The headings in this Agreement are an aid to spcuJy relerencc, and haveno lesal significance. They are DOt pan of the AgRement and may notbe coosidered for the purpose of interpretmg it. [16.33]

31. While l2egot.iating this Agreetnent, a variety of ideas acd tentativearrangemtnts were explored, but all of these are replaced by thisAareemcJlt, which is the entire agRement between the patti..[16~,Vettion 1)

32. The paRies may vary this Agreement only by a written agreementexecuted in the samt manner as this Agreement. {16.3S, Version 1]

33. Any refereoce to ·when this Agreement is si&ned" in this Agreementmeans the date the last party signs it and, ....here aPattY i$ oblipted toperform ·when this agreement is signed"7 the time fot pen01'J!Wlcc willbe no later than $q)tember 30. 1998. [16.38, Version 1]

~AMll'" LAW AGRl1EMEN1'S $A-J7.

Page 24

34. Where a party's consent is required '\Inlier this Agreement, such consentmay not be unteasonably withheld or fcf\1$C<i. [16.41]

35. If any provision of this Agreement is invalid or unenrotceable, theremainder of this Agreement continues in effect. [16.34]

36. Albert and Kerry will each do everythins reasonably necessary to givefull cffec:t to this Acreemenc. [16..39, Version: 1]

R.EI.F.ASE

37. Except as otherwise provided in chis AJreemeDt, cach party gives up allclaims at law, in equity, or by statute qainst the otner relating tosupport or a division of property, ine1ud.i.rtg. without restricting thegenerality of the foregoing, 111 claims under the FtPnil, ReLrtionsAct, theWitls Variation Act, the EstaU AdministTatiDn.Aet, and the Di'lxmt AC't,with respect to

<a) support,

(b) property,

(c) succession tights, and

(d) any other matter arisizl; from their relationship. [17.48]

ACKNOWLEDGMENTS

38. Each of the patties acknowledges that he or she: [16.25]

(a) has had independent legal advice in respect of rignts againstand obligations to the other party unc:Ier the law and thisAp-cemcnt,

(b) has read the entire AgreeaH!ot carefully,

(c) knows aDd undmwtds the WntCAt5 of this Agreemel1t,

{d} is fully aware of the effect. purposct. and intent of thisAgreemtut,

. (e) is signing this Agreement voluntarily without any Wldueinfluence or coercion by the Other,

(f) bas fully disclosed financial means and circwnstances to theother,

SA·38 SAMPI.E AGREEMENTS CO"iA8'TATlON A<:;REEMe""r JUN£/,a

Page 25

(g) is satisfied that this Agreement provides adequately forpersonal present and future needs,

(h) after the terms of this Agr~ement are carried OUt, will be ableto pay current and. reasonably foreseeable debts andobligations as they fall due, .

(i) believes that this Agreement will not result in circwnstancesthat arc unconsdonable or unfair to tbe other pany, and

G) understands that the.provisions of this Agreemeut, ifc:onsidered by the Supreme Court to be substantially unfairdue to the t1On~lO$ure of a material faa. may be reviewedand varied by the Court despite the mutual agreement of thepanies that this Agreement is ftnal and binding.

IN WITNESS WHEREOP the parties have hereunto set tbeit hands as of thedates inscribed at a pIKe within British Col\J.mbia: [16.53]

SIGNED, SEALED. AND DELIVERED, etc.

JUNE/9& FAMILY ..AW AGREEMENTS SA.J9

Page 26

SCHEDULE A

ASSETS AND LIAJUUTlES OF ALBERT BAKER

This schedule "'oul~

• list Alben's assets and liabUities in detail

• provide information about the Yalue of the assets and the extent of theliabilities

• create the foUowing descriptive labels for assets referred. 'Co in theAareement:

"Albert's Pension"

"Alben's Group Life Insurance"

SCHEDVLEB

ASSETS AND UAB1UTIES OF KERRY IlEID

This $(hedule would:

• list Kerry's assets and liabilities in detail

• provide information about the value of~ assets and the extent of theliabilities

• eteate the following descriptive labels£or assets referred to in theAgreement:

"Kerry's Pension"

MK,erry's GroYp Life Insurance"

jU"lEI 9S

Page 27

SCHEDULEC

JOINT ASSETS AND JOINT IlABILInESOF ALBERT BAKER AND KEIUlY REID

This schedule would itate that th~ panies had no joint assets or joint liabilities.

JUNE I 98 FAMILY LAW .... c:;I\EeMENTS SA.~ I

Page 28

III. ESTATE PLANNING AND LEGISLATIVE CONSIDERATIONS

1. ESTATE PLANNING

Until recently when advising clients in regard to estate planning consideration had not been given

to providing similar advise to clients who live in a common relationship. With the increased

acceptance both legislatively and otherwise of this form of relationship and with the growth in

the number of long term common law relationships in existence, estate planning both to provide

for common law spouses and the children of common law or prior marital relationships becomes

a factor the practitioner's must consider.

Estate planning and the careful drafting of the necessary documentation to carry out such

planning is desirable for most people. Due to the present uncertainties in the law, living in a.common law relationship only increases the important and urgency of such planning. This

usually involves a preliminary determination of the goals and objectives of the client. Only when

this has been determined can an appropriate estate plan be created and the appropriate

documentation prepared.

Individuals living in a common law relationship may have goals and objectives similar to those

living in a married relationship. In some cases however parties may have chosen to live in a

common law relationship because they did not wish to "marry into" certain obligations, whether

those obligation be ones that arise during their lifetime or upon their death. As a consequence,

their estate goals and objectives may be quite different from those living. in a married

relationship.

The uncertainty as to the applicability of legislation such as The Intestate Suggestion Act make

giving advice to clients living in common law relationships very difficult. This is often

complicated by the fact that such individuals may have been previously married and may have

a spouse from which they are not yet divorced. In addition, they may have children from a

previous marriage or relationship. A properly prepared Will should specify in detail what the

Page 29

beneficiaries, including the common law spouse, are entitled to receive upon the death of the

testator.

(A) PRIMARY RESIDENCE AND HOUSEHOLD GOODS

If the testator has children from a previous marriage or relationship it is particularly important

to deal in the Will with the primary place of residence of the furniture and household goods

contained in the residence. Consideration should be given as to whether the surviving common

law spouse will have a life interest in these assets or will be given some lesser period of time

to have exclusive use of them. Competing claims to these assets by a common law spouse and

children from a previous marriage or relationship can be very upsetting and destructive to the

future relationship between these parties. It may be appropriate, for example, to create a period

of 1 to 2 years for the common law spouse to have exclusive use of these assets. This will ensure

that the surviving spouse is not uprooted from the home shortly after the death of their spouse

) when they are still mourning the loss. Consideration may even be given to specifically provide

that the surviving common law spouse has an option to purchase the real property within a

certain period of time after death.

(B) NAMED BENEFICIARY AND JOINT OWNERSHIP OR ASSETS

As part of the estate planning process it is important to determine if the common law spouses

own property jointly and whether the spouse have named each other as beneficiaries of certain

assets. Naming the other spouse a beneficiary is available for assets such a life insurance policies

and Registered Retirement Saving Plans. Joint ownerships of assets is available to assets such

as bank. accounts, investment and real property.

This form of planning has many advantage including the following.

access to the asset by the surviving spouse shortly after death;

a reduction in the probate, legal and personal representative fees thatwould otherwise arise to facilitate the transfer of assets to the beneficiary;

Page 30

ability to ensure assets are transferred to beneficiaries without fear of acreditor intercepting them.

If common law spouses wish to hold assets jointly, then it may be prudent to confirm in the Will

the parties intention that such property is to pass to the survivor of them. In this way there can

be little argument by other parties, (such as family members), that there were contrary intentions.

(C) INCOME TAX ACT

The definition of spouse in section 252(4) of the Income Tax Act states that;

In this Act, (a) words referring to a spouse at any time of a tax payer include the personof the opposite sex who cohabits at that time with the'taxpayer in a conjugal relationshipand (i) has so cohabitated with the taxpayer throughout a 12 month period ending beforethat time or (ii) would be a parent of a child of whom the taxpayer would be a parent.....

This expanded definition of spouse can be of particular significance when estate planning is being

done for an individual living in a common law relationship. The definition of spouse allows

assets to be transferred to a surviving spouse on a rollover basis. As a consequence, if the client

has expressed a desire to transfer only certain portion of their assets to their common law spouse

then consideration should be given to transferring assets which have an inherent tax liability to

the surviving spouse. For example, it may be desirable to transfer contributions to a Registered

Retirement Savings Plan to a surviving spouse so that the tax liability will be deferred until the

surviving spouse withdraws these funds or passes away. Similarly, capital assets which have

increased significantly in value and which will attract capital gain taxation on death might well

be appropriate assets to transfer to the surviving common law spouse. This of course is based

on the assumption that the said assets do not qualify for the enhanced capital gain exemption.

Assets which do not have inherent tax liability could then be transferred to other beneficiaries

such as children or brothers and sisters. In this way, various beneficiaries would benefit from

Page 31

If the common law spouse has predeceased the testator then consideration should also be given

to the definition of "child" in the Income Tax Act. Section 252 (l)(c) provides that a child of

a tax payers includes "a child of the taxpayer's spouse". As a consequence, it is possible to

transfer contributions to a Registered Retirement Savings Plan to a child of the deceased common

law spouse if the requirements of the Income Tax Act are met. In particular, the stepchild must

be dependant on the testator. This is a question of fact and would likely be most applicable in

a situation where the children of the deceased common law spouse were still minors. Section

146(1) of the Income Tax Act provides that unless it is established to the contrary, a stepchild

will generally be deemed not to be financially dependant on the deceased at the time of their

death if the income of the stepchild for the year proceeding death exceeds the basis personal

exemption(present $6,456.00). If the stepchild is over the age of 18 years, then the stepchild

must be dependant on the deceased due to a physical or mental infirmity.

) If the stepchild satisfies these requirements then RRSP contributions can be transferred to the

stepchild on a rollover basis. If the financially dependant child is not dependant by reason of

a mental or physically disability then the funds must be paid out to the stepchild before they

attain the age of 19 years. A stepchild who was dependent due to a physical or mental disability

can transfer funds to their own RRSP or purchase a life annuity to age 90 years.

(D) CANADA PENSION PLAN (CPP)

If the requirements of the CPP are met, a pension will be payable to the surviving spouse of a

deceased contributor. (s.44(1)(d».

Page 32

"Spouse" in relation to a contributor means...

(i) if there is no person described insubparagraph (ii), a person who is marriedto the contributor at the relevant time, or

(ii) a person of the opposite sex who iscohabitating with the contributor in aconjugal relationship at the relevant time,having so cohabitated with the contributorfor a conti~uous period of at least oneyear, ••.

In the case of a contributor's death, the "relevant time", means the time of the

contributor's death (Section 2 (1».

The -amount of the surviving spouse's monthly pension depends on a number of

factors including:

(i) How much and for how long the deceasedcontributor paid into CPP;

(ii) The surviving spouse's age when the contributor died; and

(iii) Whether the surviving spouse is alsoreceiving a CPP disability or retirementpension.

CPP first determines how much the deceased contributor's retirement pension is, or

would have been if the deceased had been 65 years old at the date of death. Then

a further calculation is done based on various factors (s. 58). Human Resources

Development Canada provides the following helpful chart:

)

Page 33

If your surviving Then the calculationspouse is: is:

*age 65 or more *60 per cent of yourIIcalculated" retirementpension

*age 45 to 64 *a flat rate portionor plus*under age 45 37.5 per cent of yourand "calculated" retirement-disabled (according to pensionCPP legislation)or-raising your dependentchild

*under age 45 *as above (age 45 to 64)and minus-not disabled (according 1/120 for each month yourto CPP legislation) and spouse is under age 45 at-not raising your dependent the time of your deathchild

·under age 35 • not paid until your spouseand reaches age 65-not disabled (according orto CPP legislation) and becomes disabled-not raising your dependentchild.

The maximum amount that can be received by a surviving spouse is presently

$446.87 per month.

The possibility exists for there to be competing claims for a surviving spouse's

pension. Situations may arise where a deceased contributor living in a common law

Page 34relationship passes away, leaving amarried spouse that he or she was separated from,

but remained married to at the time of the death. The definition of spouse in the

Canada Pension Plan appears to resolve the competing claims to the surviving

spouse's pension. The qualifier contained in subparagraph (i) of the definition of

"spouse" basically gives preference to a qualifying common law spouse that was

residing with the contributor at the time of death. The case of McLeod v .. Canada

(Attorney General) [1993) A.J. 975 (Alberta Court of Queen's Bench) upheld this

result in the face of a constitutional law and charter of rights and freedoms challenge.

In that case the Court upheld a decision that a common law spouse of 11 years that

was residing with the deceased contributor at the time of his death was entitled to

receive the surviving spouse's pension instead of the spouse that had been married

to him for approximately 40 years.

Application must be made to CPP for this benefit upon the death of the common law

spouse. It is not paid automatically (s. 60(1)). A failure to apply for this benefit.within 1 year of death will result in a loss of benefits as CPP is only prepared to make

back payments for up to 12 months.

A surviving spouse cannot become entitled to more than one surviving spouse's

pension. If a person has been widowed more than once, only the larger of the

surviving spouse's pensions will be paid, not both (s. 63(6)).

A subsequent marriage does not result in a loss of entitlement to a surviving spouse's

pension already being received (s. 63.1).

CREDIT SPLITTING UPON SEPARATION OR DEATH

Upon separation or death common law spouses can apply to split CPP pension credits

which accrued during the period of cohabitation (s. 55). CPP credits are earned based

on the contributions that were made to the plan by both parties. These credits are

used by CPP to determine the amount of future Cpp benefits that the contributor is

entitled to receive.

Page 35

Upon application, the CPP will add together the credits of both spouses which accrued

during the time they cohabitated. This total number is then divided equally between

them. It does not matter if one spouse did not make any contributions to the CPP

during cohabitation.

The plan works with full calendar years when calculating the period of cohabitation.

They include the full calendar year for the year the spouses began living together and

they do not include the calendar year for the year that the parties separated in.

Common law spouses must have lived in a conjugal relationship for at least 12 months

to be .entitled to apply to split CPP credits. Application must be made within the

earlier of 4 years of the date of separation or 3 years of the date of death (s. 55.1).

PENSION SHARING

A CPP retirement pension is normally paid to a contributor who is at least 60 years of

age and satisfies all of the requirements. The plan does however allow common law

spouses who are both at least 60 years old to share or equalize their retirement

pensions which were earned during their years of cohabitation. This allows common

law spouses to effectively "income-split" the retirement pension received from CPP.

They are not however allowed to share the portion of their retirement pension which

was earned outside of their period of cohabitation. Upon the death of one of the.

spouses, the su~iving spouse will revert back to receiving the full amount of their

own pension.

ORPHAN'S BENEFIT

The Canada Pension Plan provides that an "orphan's benefit" will be paid to each

orphan of a deceased contributor who has made contributions for the minimum

qualifying period (s. 42(1 Hf)). "Orphan" of a contributor is defined as "a dependent

child" of a contributor who has died but does not include a dependent child described

in paragraph (c) of the definition "dependent child". (S. 42(1)). A "dependent child"

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is defined in the Canada Pension Plan as a "child" of the contributor who

(a) is less than eighteen years of age,

(b) is eighteen or more years of age but lessthan twenty-five years of age and is in full­time attendance at a school or universityas defined by regulation, or

(c) is a child other than a child described in paragraph (b), iseighteen or more years of age and is disabled, having beendisabled without interruption since the time he reached eighteenyears of age or the contributor died, whichever occurred later (s.42(1 )).

The definition of "Child" of a contributor includes an individual, although not the

contributor's natural born child, was an individual that the contributor had, either

legally or in fact, "custody and control" of prior to the contributor's death (s. 42(1 I).

An orphan is presently entitled to a benefit of $169.80 per month. This payment will

continue as long as the child qualifies as a "dependent child". If both parents of a

dependent child have died and both parents have met the contributory requirements

then the child would be entitled to receive $339.60 per month.

If the child is under 18 years of age, then these payments are normally paid to the

, person with whom the child is living.. If the child is 18 or older and 'qualifies b~cause

of full-time attendance at a recogniz'ed institution, then the benefit will be paid directly

to such person.

Application must be made for these benefits. Again, application should be made as

soon as possible once the qualifying requirements are met as CPP will only make back

payments for 11 months from the date the application is received.

CHILDRENS BENEFIT - DISABILITY OF PARENT

The CPP will pay a monthly childrens benefit to the dependent children of a disabled

)

Page 3.1

contributor (s. 44(d)). Dependent child again includes a child in the "care and control"

of the contributor. For a dependent child to qualify for a childrens benefit, the

contributor must qualify for a disability pension.

To qualify the contributor must have contributed to the CPP for a minimum number

of years, be between 18 and 65 years of age and be considered disabled. To be

disabled, the condition can be physical or mental and must be "severe and prolonged".

"Severe" means the condition prevents the contributor from working regularly at any

job. "Prolonged" means the contributor's condition is long term and of indefinite

duration or is likely to result in their death (s. 42(1)).

Application must be made for these benefits. The maximum childrens benefit is

presently $169.80 per .month per child, or $339.60 per month if both "parents" are

disabled and qualify for a disability pension.

DEATH BENEFIT

The Canada Pension Plan also provides that a death benefit will be paid to the estate

of the deceased contributor (s. 44( 1He)). The amount of the death benefit will depend

on the contributions that have been made by the contributor during the contributor's

lifetime. CPP determines the amount that the deceased's CPP retirement pension is,

or would have been if the deceased had been 65 years old at the date of death. The

death benefit is then equal to'six times the monthly retirement pension amount to a

maximum of $2,500.00 (s. 57). Generally, this amount is paid to the deceased

contributor's estate and therefore represents an asset of the estate (s. 71).

OLD AGE SECURITY

A monthly benefit called a spouse's allowance is an income tested, monthly benefit

payable to the 60-64 year old spouse of an Old Age Security pensioner. The

maximum spouse's allowance is presently $725.21 per month (based on $0 income).

Presently the couples combined income must be less than $21,792.00 per year to

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qualify for a spouse's allowance.

A widowed spouse's allowance is an income-tested, monthly benefit payable to widowed person

60-64 years of age. The maximum widowed spouse's allowance is presently $800.64 per month

(based on $0 income). Presently the applicant's income must be less than $15,984.00 per year

to qualify for a widowed spouse's allowance.

(E) ENDURING POWER OF ATTORNEY AND DEPENDANT ADULTS

The Powers of Attorney Act, S.S. 1996, Chapter P. 20.2, provides that the authority of an

Attorney given in a written power of attorney is not terminated by reason only of the subsequent

mental infirmity of the donor. If the Power of Attorney (a) provided for the authority to continue

notwithstanding any mental infirmity and (b) is signed by the'donor and a witness other then the

attorney or the spouse of the attorney.

If one of the common law spouses loses capacity, it is obviously possible for the remaining

common law to make application under The Dependant Adults Act, S.S, 1996, Chapter D- 25,

to be appointed trustee, Sec 3(1). It is possible however for other "interested persons" to make

an application to be appointed trustee including the family and friends of 'the incapacitated

person. Competing applications to be appointed trustee can be expensive and may create

problems if no one has the legal authority to make financial decisions on behalf of the dependant

adult until a decision has been made by the Court on the competing application.

An Enduring Power of Attorney prepared in a common law situation should also contemplate

specifically providing that assets can be used for the maintenance and support of the common

law spouse and the children of that relationship.

These problems can be eliminated through an express provision in the Power of Attorney provide

for the maintenance, education, benefit, and advancement of specifically named individuals such

Page 39

as the common law spouse and stepchildren.

(F) SUMMARY

Estate planning as it relates to individuals living in a common law relationships is not particularly

different than individuals that are single or that are living in a married relationship. Many of the

concepts and strategies for estate planning remain the same. However until the rights of a

common law spouse under legislation are settled, the important of estate planning for individuals

living in a common law relationship is critical. The rights of a spouse living in a married

relationship are much more settled an are fairly predictable. The rights of an individual living in

common law relationship are very much in question and subject to further legislation or Court

interpretation. As a consequence, proper estate planning and the appropriate documentation of

such planning is critical for individuals living in such a relationship.

The drafting of the section is such that I think it is unclear what effect a testator's divorce would

have on bequests to a common law spouse. In the interest of safety it would appear that the

divorce of the testator would be an occasion for a complete and re-drafting of his or her estate

planning documents.

2. LEGISLATIVE CONSIDERATIONS

When providing estate planning to common law clients, generally speaking, the rules are similar

to the advice that would be provided to clients more traditional married relationships but

consideration should be given to the impact of the following pieces of Legislation;

A. THE DEPENDANT'S RELIEF ACT (S.S. 1996 D. 25.01)

The Dependant's Relief Act was establish~d to make reasonable provision for the maintenance

of dependants of a deceased when they had not made those arrangements in their estate. Under

that Act in section 2(1), the definition of dependant goes beyond the normal husband and wife

Page 40

and for children under 18 to include person's of the opposite sex with whom a deceased

cohabited as husband and wife continuously for a period of not less than three years or in a

relationship of some permanence if they are the parents of a child.

The full text of the Dependant definition is;

Cd) a person of the opposite sex with whom a deceased cohabited ashusband and wife: .

(i) continuously for a period of not less than three years; or

:~:1~relatio~~_~.~ence,ifthey are the parents

You can see accordingly that relief is available t~ common law spouses if the relationship has

existed for a period of three years or if there are children of the relationship it is a relationship

of some permanence.

The question then becomes what "relationship of some permanence" means. The phrase was

originally used in the Family Relations Act in Ontario which was passed in 1978. Given the

age of that Act, one would expect some reasonable measure of judicial interpretation of the

phrase but such is not the case.

Neither the Family Law Reform Act 1978 of Ontario for which the phrase was drawn nor The

Dependant's Relief Act provide any definition or guidelines for the determine 'of the issue as to

what is "a relationship of some permanence.

. The issue has been considered twice in Ontario. In the case of Abell v. Casselman(l979), 1

F.L.R.C. 449 (Ont Prov Ct.), Kirkland J. of the Ontario Provincial Court, noted the absence of

a judicial definition or guidelines and went to see at (P. 451);

"The interpretation to be placed on these words does not necessarily mean that therelationship is one lasting for ever but merely connotes the opposite of a temporary oroccasional relationship. The word "some" would appear to be redundant as therelationship would either be permanent or not permanent. I attach to that word themeaning that although the relationship was permanent it was not one which is lasting

Page 41

forever.

In determining where there was a relationship of some permanence it is necessary toreview the living circumstances."

In Re Labbe and McCullough, (1979) 23 O.R. 536, the Ontario Provincial Court again considered

the words in the application for maintenance under the Family Law Reform Act. In that

application the Court found that notwithstanding that the parties had only cohabitated for a period

of six weeks out of a total of 19 months and that in an apartment belonging exclusively to the

woman, that it was a relationship of some permanence because (l) they knew each other's

whereabouts at all times during the relevant period, (2) that the women had moved to another

locations in part to be with the man, (3) the man had gone to the women to recuperate from an

injury(a broken hand) and (4) there was talk of marriage some day.

While caution is to be exercised in that this was a Maintenance Application as opposed to a

Dependant's Relief Application the wording. to the Saskatchewan section is exactly the same as

the Ontario section. The Court in this case appeared to place great weight on the discussions

that the parties had that they might possibly marry some day and found that that gave the

relationship "a touch of permanence".

Similar wording has been considered in the context of the Saskatchewan Family'Maintenance Act

by the Court of Queen's Bench in the case of de Caux v Appel,(118 Sask R. 259). This was an

application for child and spousal maintenance under the Family Maintenance Act. In reaching

it's decision the Court considered the words "relationship of some permanence" as found in that

Act. The wording in The Dependant's Relief Act is similar.

The Court(Carter J.) commented on the absence of any cases of assistance in the defining that

phrase. In reaching a decision that the women was a spouse within the meaning of the

Legislation the Court found that the definition did not require cohabitation for any fixed period

of time. That it was not the length of the cohabitation but the permanence of the relationship

that was a critical issue though the length of cohabitation would clearly be a factor to consider.

Page 42

The facts of this case are that the parties dated in 1987 and again in 1990 when sexual

intercourse first took place. They then cohabited for fairly lengthy periods of time from 1990

to August of 1993 when their relationship ended. The Court in concluding that this "a

relationship of some permanence" commented that such a relationship was obviously something

less than cohabitation as husband and wife for a period of not less then three years.

In reaching her decision, Madam Justice Carter distinguished the situation before her:

"From the many cases which have come before me where the unmarried parents havedated for a week or a month and then the pregnancy of the women had resulted in a breakup; or situations where the parties have lived together off and on for brief periods oftime with other "relationships" intervening"

I think it is clear that for the purpose of the Dependant's Relief Legislation, common law spouses

in relationships within the definition can make application. Whether your client fails within the

section 2 definition will depend on the facts of their living situation at the time of the death of

the deceased.

The purpose the Dependant's Relief Act is to allow the Court on application, if it is the opinion

that a deceased has disposed of a real and personal property in such a manner that reasonable

provision has not been made for the maintenance of dependant, to order that provision be made

from the deceased estate for maintenance of the dependant.

The phrase "reasonable provision for maintenance" is to be interpreted with regard to (1) The

Family Maintenance Act, (2) the law of constructive trusts, (3) the principle's of unjust

enrichment and (4) the legal principles applicable to spousal maintenance;

Nelson v Stroshein Estate[l998] Sask. D. 970.20.30.30-01 Sask Q.B. 2876/97 J.C.R. -

In any Dependant Relief application consideration must be taken to other provisions thedeceased may have made for his common law spouse and/or children. The Courts haveheld that where a deceased made reasonable provision for his children's spouse without

)

Page 43

making a provision in a will that an application under the Dependant's Relief Act was notopen.

Re: Eddolls Estate[l998] Sask D. 970.90.85.20-01 ( May 19, 1998) 101197 Sask Q.B.J.C.H.(Gerein J).

The onus is on the applicant to satisfy the Court that firstly they are a dependant andsecondly that the testator failed to make reasonable provision for the applicant.

Jeffers v Jeffers (1982) 20 Sask. R. 52

Hiebert and Hiebert v. Ward and Gardner (1980) 3, Sask. R. 255.

The Hiebert case is interesting in that it is an application by natural children of a deceased

testator who had left his entire estate to his common law wife and her daughter. Another

interesting factor is that the natural children were both permanent wards of the Minister ofSocial

Services. The Court found that an Order making a child a permanent ward of the Minister does

not relieve the natural father from providing for reasonable maintenance for the child. The

children were under the age of 18 at the time of the testator's death and accordingly were

dependants within the meaning of the legislation. The testator's will having been silent as to

provision for them, the Court ordered from the estate some of the money to both children for

their maintenance and education.

The factors that the Court is directed to consider is set out in section 8 of the Legislation as

follows:

Insert Section 8 of the Dependant's Relief Act.

Faeian............i:=-:;-c_.....8(1) Indete .. whether, and in what way, and fl'C''1J1 what date, maintenanceought to be iVided, the court shall consider the nature of the propertyrepresenting th~ deceased's estate and shall not make an order requiring a sale ofproperty that would be improvident having regard to the interests of thedependants and ofthe person who, apart from the order, would be entitled to thatproperty.

(2) In making an order for maintenance, the court shall consider:

(a) any past, present or future capital or income from any source of thedependant;

(b) the conduct.of that dependant in relation to the deceased;

(e) the claims that imy other dependant of the deceased may have; and'. .

Page 44

An Order made under this section has effect as of the date of the testator's death, as if the will

had been executed with any variations that are specified in the Order that are necessary to give

effect to that Order(Section 15).

Section 17 of the Act, restricts the ability of an executor or administrator to distribute the estate

and reads as follows;

DJRrIInatioIlofestate17(1) Until the expiration ofsixmonths from the gnint ofprobate ofthe will or ofletters of admiDistration, the executor, adminiStrator or trustee shall notdistribute any portion of the estate to any beneficiary without:

(a) the consent ofall ofthe dependants ofthe deceased; or

(b) an order ofthe court authorizing the distribution.

(2) Nothing in this Act prevents an executor, adm.inistrator or trustee frommaking reasonable advances for maintenance to dependants who are beneficiaries.

(3) Ifan executor, administrator or trustee distributes any portion of the estatein contravention ofsubsection (1) and any provision for maintenance is orderedbythe court to be made out of the estate, the executor, administrator or trustee isperscmally liable to pay the amount of the distribution to the eztent that theprovision orany partofit 0lJIht, paiBuant to the order or this Act, to be made outofthe portion ofthe estate distributed.

Distribution of the estate once an Dependant's Relief application is made is postponed until the

disposition of that application.

The Courts have held that once an estate is fully distributed in keeping with the statute, the right

to make application under the Dependant's Relief Act is extinguished.

Wendland(Litigation guardian 00 v. Wendland Estate[1998] Sask D. 970-90.85.70­01(January 8, 1996) Sask Court of Appeal No. 1982

As practitioners you should consider the time limitations that the section logically imposes on

any application under The Dependant Relief Legislation.

As an example of the possible outcomes under a Dependant Relief application consider

Page 45

Paxman v. Saskatchewan(Public Trustee) [1996] Sask. D.(Sask Q.B. 536/95 Judicial Centre of

Weybum), In this case the female deceased died intestate with an estate worth approximately

$75,000.00. The applicant male had an estate worth in excess of $400,000.00 and income of

$2,000.00 per month. The Public Trustee had located 7 nieces and nephews who would inherit

the funds of the intestacy. The Court found the applicant to be a dependant as the evidence

showed that the parties had lived together as husband and wife.

In determining whether the applicant had satisfied the onus of establishing the deceased had

failed to make reasonable provisions for his maintenance, the Court indicated there were several

considerations to be taken in account, firstly, the size and nature of the estate(the Court noted

the estate was modest and was likely accumulated over the course of the life of the deceased,

secondly the Court must look at the dependants past, present, and future capital and income(the

Court noted the applicant had the economic means to support himself), thirdly the conduct of the

applicant in relationship to the deceased must be taken in 'consideration(the Court found the

applicant cared for and was supportive of the deceased), fourthly the Court must also consider

claims of any other dependants of the testator(here the Court found there were no other

dependants, lastly the Court should consider any other matters that should fairly be taken into

account in arriving at a decision(The Court found the applicant had cared for the deceased during

the last five years of her life which may have assisted her in preserving and maintaining her

estate at it's present level).

The Court provided to the applicant one half of the proceeds of the estate less the payment of

funeral and estate expenses.

B. WILL8 ACT (8.8. 1996, C.W • 14.1)

It is clear that many, if not all, of the uncertainties which attach to a claim by a common law

applicant under The Dependant's Relief Act can be resolved by appropriate estate planning and

the utilization of a properly drawn will.

Page 46

Generally speaking the advice provided to the common law client in regard to the preparation

of a will, would be similar to that provided to any other client. In drafting a will, consideration

must be made to any prior relationships, whether married or otherwise, which create ongoing

maintenance obligations or may lead to a Dependant's Relief application. Given the nature of

common law relationships it is suggested that Wills and Estate planning in such relationships

might properly be reviewed on a more regular basis then might otherwise be the case.

Several provisions of the Wills Act should be considered.

While most practitioners are aware that any bequest to a person that attests the execution of a

Will is void, not everyone is aware that that prohibition extends to the spouse of that person.

It is suggested that for the purposes of this Legislation the word spouse would include common

law spouse(section 3(2».

It is to be remembered that section 17 of the Wills Act clearly provides that unless a Will is

drafted in contemplation of marriage and so declares that the Will will be revoked by marriage.

Accordingly, it is clear that if a marriage subsequently occurs, the Will unless it is specifically

drawn with the appropriate declaration, must be redone or the Will will be ineffective.

A similar six months delay is legislated in the Wills Act ,and was found in The Dependants Relief

Act.

Section 19 of the Wills Act provides that where a testator is divorced after the making of the

Will and before his death, bequest and appointments in the Will to his spouse are deemed to he

revoked unless a contrary intention appears. Section 19(1) clearly contemplates spouse to include

common law spouse.

Section 19(1) reads:Dreetofc1i,w:ee

19(1) Where, after the ma'!ring ofth~win.~d be(ore the ~eathofthe testator, themarriage ofthe testator is terminated by a divorce or the marriage is found to bevoid or declared a nullity by a court in a proceeding to which the testator is a party,then, unless a contrary intention appears in the will, the following are revokedand the will is to be construed as ifthe spouse had predeceased the testator:

(a) a devise or bequest ofa beneficial interest in property to the spouse;.. '

(b) the appOiiitment ofthe spouse as executor or trustee;

(c) a general or special power of appointment conferred on the spouse.

(2) In subseetion (1), "spcnue- includes the person purported or thought by thetestator to be his or her 8pouse.(<<co7Voint»)

Page 47

C. THE INTESTATE SUCCESSION ACT, S.S. 1996 Ch. 1-13.1.

The Intestate Succession Act legislates what will happen to the property that you own, both real

and personal, if you do not have a valid and enforceable Will at the time of your death. Section

4(1) of the Act provides that if an individual dies leaving a surviving spouse but no issue and

the estate does not exceed $10,000.00, then all such person's property will be transferred to the

surviving spouse. Section 4(3) provides that if an intestate has a spouse and one or more

children that have survived, then the spouse is entitled to a preferential share of $10.000.00 plus

1/2 or 1/3 of the remainder of the Estate depending on how many children there are The child

or children are entitled to the remaining 1/2 or 1/3 of the property. Throughout the Intestate

Succession Act reference is made to "spouse". There is no definition of spouse contained in the

Act.

If·an individual dies intestate then the Queen's Bench Rules 'specify who may make application·

for a Grant of Administration. Rule 712 provides that the spouse of the deceased is the person

that has preference to make such an application. There is no definition of "spouse" in the

Queen's Bench Rule. If a common law spouse qualifies then the common law spouse would be

entitled to make application for the grant.

If such is the case, then a common law spouse will be entitled to make application for the Grant

of Administration and may be significant beneficiary of the Estate. If they are not included

within the definition of these words then they will have to seek other remedies if they wish to

receive a share of the Estate of their common law spouse.

The issue has not been addressed by Saskatchewan Courts. A review of the authorities in other

jurisdictions leads as is often the case to conflicting judicial view points. The Alberta Court of

Appeal in the Rossu v. Taylor(as yet unreported) stated that they were not prepared to interpret

the word "spouse" as encompassing "common spouses" who have cohabited for a certain period

of time when there is no consensus as to what an appropriate qualifying period of cohabitation

might be.

Page 48

While this was an application under the Alberta Domestic Relations Act, it is the view of Alberta

Practitioners to whom I spoke that it was unlikely that the Court would take a different approach

when dealing with other statutes such as the Intestate Succession Act. It was the view of Alberta

counsel that in Alberta the only way that a common law spouse can be found to be entitled to

benefits under the Intestate Succession Act was through a Charter Challenge.

This would require the argument to be made that a denial of right of the common law spouse to

share in the estate of their spouse, should such spouse die intestate, breaches the surviving

spouse's s. 15(1) equality rights and that this breach is not justified under s. 1. This involves the

claimant first showing a denial of equal protection or equal benefit of the laws compared to some

other person and secondly, the denial constitutes discrimination. The claimant must show that

the denial rests on one of the grounds enumerated in s. 15(1) or on analogous ground or that an

unequal treatment is based on a stereotypical application of presumed groups or personal

characteristics. It is to be remembered the Supreme Court of Canada in Miron v Trudel, [1996]

I.L.R. 1-3185, determined that marital status is an analogous ground.

It is suggested that a Charter Challenge would likely be successful. Denying a common law

spouse the right to receive a share of their deceased spouse's estate on a intestacy appears to be

a denial of equal protection or equal benefit of the laws compared with a married spouse. If the

Court were to find that the Intestate Succession Act offended s 15 of the Chiuter, because the

right to receive assets on an intestacy applied only to married spouses then it is necessary to

determine that this infringement is reasonable and justified under section 1. It is suggested under

such an analysis that the purpose of Intestate Succession Act could be described as being similar

to the purpose in the Family Maintenance Act in that it is to sustain and benefit spouses and

children, where one of the spouses has died intestate. Alternatively, the Court could find that

the objective of the legislation is the protection of the family unit. In either case, I should think

that the Court would conclude that excluding common law spouse is not reasonably justifiable

under s 1.

While there have been no cases in other jurisdictions directly on the point, there have been

Page 49

several decisions under the Family Law Act by the Court of Appeal in Ontario, particularly in

M. v. H. (1996), 142 D.L.R.(4th)1.(Ont. c.A.). In that case the Court found that the definition

of "spouse" in Ontario Family Law Act(which is similar to the definition of spouse in our Family

Maintenance Act) was unconstitutional because of the words "either of a man or a woman". In

that case the motions Judge had held the s 29 of the Family Law Act offended s 15(1) of the

Charter and was not saved by s 1. She declared s 29 to be of no force or effect to the extent

that it excluded same sex couples from the definition of spouse. That decision has been

suspended by the Court of Appeal for one year because of "potential ramifications far beyond

the confines of the case before the Court" This does however indicate a more liberal attitude in

the Courts in Ontario which would more in keeping with what I believe would be the response

of Saskatchewan Courts to such an application.

In any charter challenge of the Intestate Succession Act, the Court would have to deal with the

thorny issue of the definition of what constitutes a common iaw relationship. They would have

to try to determine what are the indicating factors of the common law relationship which would

create a "bundle of rights" that accrue to that relationship. How long must they have lived

together? Does there have to be a public declaration by them that they are committed to each

other? Is it necessary that they combine their finances? Is dependency of one of the spouses

arising from the relationship necessary? Would the rights be similar to a married couple.

There also is the questions of how the Court would deal with the potential problem of competing

claims. If a common law spouse is entitled to share in the Estate of a deceased spouse, would

a married person who is separated from the deceased years ago but who remained married to

spouse at the time of their death also be entitled to share in the Estate(assuming that they have

not disqualified themselves pursuant to s 20 of our Intestate Succession Act) and if so then to

what portion of the Estate would they be entitled.

Some parties may have chosen to live in common law relationship rather then a married

relationship because they want to avoid the legal obligations that lie in marriage. The question

) then comes up as to whether these legal obligations should be forced on them against their will.

Page 50

While these questions have not been addressed to date by the Courts in Saskatchewan or

elsewhere, it would appear that given the growth of the common law relationships as a

percentage of couples living together, that it is inevitable that the Courts will soon be required

to address these questions.