May 28, 2020 | Separation

Common-law agreements

Common-law relationships are not legally recognized in Quebec. As common-law partners in Quebec, you do not have any legal obligations towards one another. You do not owe each other financial support or any contribution to household expenses. What does that mean? common-law spouses can decide how they are going to pay for their respective expenses and joint expenses, such as a mortgage etc. if they are home owners. However, there are no precedents that are set during the relationship that would have an impact on any obligation once the relationship ends. The only lasting legal effect of a common-law relationship is of co-ownership in the event that the couple owned property together. In those cases, it is the rules of co-ownership and property law that apply. Therefore, there are NO parallel rules for common-law couples to those of married couples that are seeking a divorce. This is different from all the other provinces in Canada, where the rights and obligations for a separation between a common-law couple and a married couple can be very similar. That being said, in the event of a separation of a common-law couple, the court cannot order spousal support to one of the parties.

However, common law couples are free to enter acommon-law agreement to anticipate the consequences in the event of a separation in order to ensure financial security, with the goal to protect their rights (which are not protected at all by law). This agreement is considered a civil contract, and as with any other contract, the parties to the agreement can stipulate anything as long as it is not contrary to public order.

A common-law agreement is recommended and necessary to ensure your rights are protected and that you have access to the justice system in the event of a separation. For example, common-law couples can enter an agreement similar to a marriage contract, which would include rights and obligations such as financial assistance (similar to a spousal support) in anticipation of a separation.   

A few examples of clauses that can be included in a common-law agreement are:

–       A list of assets and debts that belong to you and your partner;

–       A clause stipulating how these assets will be split in the case of a separation;

–       A clause stipulating financial support to be paid in the case of a separation (similar to a spousal support for married couples that are divorcing);

–       A clause stipulating division of undivided co-owned property;

–       A clause designating your partner as a beneficiary in your life insurance policy;

–       A clause stipulating Instructions with respect to loans between common-law partners;

–       A clause stipulating how household expenses will be shared, for example: hydro, groceries and mortgage.

A common-law agreement can have as many or as few terms as you choose, it is made to fit your needs and it can be drafted or modified at any time during the relationship. However, drafting a common-law agreement is not simple and should represent the couples’ true wishes. This is why it is always recommended to consult a lawyer or a notary before signing one. 

It is important to highlight that a common law agreement is not a will and you can only stipulate inter-vivos donations (gifts between living people) therein. Moreover, this contract must respect public order and be in the children’s best interest, if there are children involved. 

We often hear from common-law couples that a contract is not necessary or that they do not want to have a contract in anticipation of a separation. However, the reality is very different than most couples believe. After years of common-law relationship, it is more challenging to distinguish the assets and debts of each partner, especially when couples have joint accounts and joint credit cards. 

The most important takeaway message from this article is the following: It is beneficial to have a contract in place to regulate common-law relationships, since the civil law itself does not provide any protection. 

It is also important to remember that a common-law agreement is a contract for you, therefore  the language should be clear and simple, and should articulate your wishes. If you have any questions about common-law agreements, do not hesitate to contact us