Money doesn’t make for the most romantic topic of conversation, so it’s no wonder some couples avoid it—especially in the excitement of a relationship milestone, like moving in together. A CIBC survey found that only 35 percent of couples planning to get married or live common law in the next two years had seriously discussed finances, though nearly all those polled believe it’s an important discussion to have.
Not only are money conflicts a leading cause of breakups, but there’s the fun of untangling finances after the fact. Of course, thinking of the what-ifs is about as appealing as talking money when you’re busy picking out paint colours for your love nest or testing out couches to snuggle up on during your date nights at home.
What some couples don’t realize is you don’t have to be legally married to have financial obligations to your partner. If you enter into a common-law relationship, here are some rules and regulations to follow.
What is a common-law relationship?
To make it perfectly confusing, the answer is that it depends on where you live.
You’re considered to be in a common-law relationship by the Canadian government when you and your partner have lived together for at least 12 months, you have a child together or your partner has custody and control of your child and your child depends solely on them for support. This is primarily for tax purposes and entitlement to government benefits.
At the provincial level is where things get a bit trickier.
In Ontario and Manitoba, you’re considered common law after three years cohabiting or one year if you share a child. Manitoba gives couples the option of registering their relationship with the Vital Statistics Agency at any time after moving in together, exempting them from the usual waiting period.
In Quebec and Alberta, couples aren’t considered common law no matter how long they’ve shared a roof. Alberta has instead adopted the term adult interdependent partners to describe couples, or even family members or roommates, that have shared a “relationship of interdependence” for a period of time.
You’ll want to check on the legal definition of common-law marriage where you live to find out what qualifies you and your partner as common law and what that could mean for you if you split.
What happens if my common-law spouse and I break up?
That also depends on where you live.
Other provinces grant common-law spouses the same rights as married spouses. Manitoba is one such province, while in British Columbia, your entitlement is based on how long you were coupled up for. Two years is the magic number when it comes to dividing property or debt, while you can apply for spousal support under the two-year mark if you have a child with your ex.
How can I protect my interests in my common-law relationship?
Getting your finances in check as you combine incomes and living expenses is a good thing no matter what, so put down those paint samples and pull out a spreadsheet. Listing your assets and liabilities—both joint and separate—and determining what should go into your monthly budget will relieve some of that financial strain couples so often experience. It will also let your financial advisor know how to better help you organize your finances.
That information can help if you decide to enter into any sort of legal agreement that can cover your behind if (knock on wood) the worst were to happen. Sort of like a pre-nup, without the wedding part. You can find a cohabitation agreement template online or sit down with a lawyer to work out the details. You can match a lawyer that is specialized provincial legislation in your region for free on Vexxit. Most will include a financial disclosure, much like you’ve already prepared, and need to be signed and witnessed.
You may want to have this heart to heart—or rather, head to head—before anyone starts unpacking their boxes. While the conversation might be uncomfortable to have, your relationship and your finances will likely be better for it.