If you’ve committed to a relationship and that relationship ends, financial impact is inevitable. It’s a common misperception that the financial impact of a break-up is less for those in a common law relationship than in a marriage because common law partners do not share property. However, there can be unexpected negative consequences in both scenarios.
Personally, I believe that a common law relationship is a dangerous one. A lot happens over 10 or so years of a relationship, particularly with young couples. If major assets, such as the home, are only held in the name of one person, the other partner could find themselves out of the house. If you weren’t careful up front to ensure property ownership was well documented, it could lead to a lot of very costly litigation. In contrast, for married couples, the matrimonial home is given unique status, and there is no date of marriage credit for the owner of the matrimonial home.
Spousal and child support are two items that both common law and married couples have to resolve. Negotiating for or fighting over appropriate support can be relatively simple if the couple have salaried positions with good documentation of payments and benefits. However, if the discussion involves business for self, family trusts, or certain share purchase arrangements, then things can get a lot more complicated. It’s very important that you receive the appropriate and full financial disclosure before resolving support issues—even if your entitlement to support may be an open issue. Proper understanding of the financial basis for support enables you to make an informed decision.
Sorting out these financial issues can take a lot of time and discussion. It is not unusual to involve a financial professional to help sort out the true income for a party. While proper disclosure is necessary, to broaden a request should be resisted to avoid improperly invading one’s privacy.
You can avoid a lot of expensive litigation with a properly crafted domestic contract. This is especially true for older, established individuals who are entering into a relationship of some permanence. Planning ahead is not a negative commentary on your love for and commitment to your partner. It is about honest and open communication. And that’s the foundation for a successful union, no?
No one wants to need a lawyer. But when you do, you deserve one who not only knows the law but also respects your time, your story, and your goals. If you’re facing a legal challenge—or just want to plan ahead—we’re here to help. Give us a call at 905-523-6464 or email info@pjkjlaw.ca.
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