In Alberta, many couples live together in committed relationships without formalizing the relationship through marriage. While the term “common law” is often applied to such relationships, it is important to note that Alberta law doesn’t recognize this term. Instead, the province uses a different legal concept called an “adult interdependent relationship.”
For those in adult interdependent relationships, it is common for both parties to want to keep things informal when it comes to planning around property and finances. There is often a reluctance — as with pre-nuptial agreements in a marriage — to address how things should be divided between the parties should they split up. However, it is always a good idea to address these issues honestly and openly when things are going well, as they become much trickier to deal with amidst a relationship breakdown. One of the best ways to make arrangements is by creating a cohabitation agreement.
Simply put, a cohabitation agreement is a domestic contract. It describes the conscious desires of the parties to an adult interdependent relationship regarding how their property and finances will be divided in the event of a relationship breakdown. A cohabitation agreement is a dynamic tool and can change over time depending on the evolving circumstances of the couple.
A cohabitation agreement is a tool that can be beneficial for unmarried couples. However, it is especially useful for couples in an adult interdependent relationship. This is because, under Alberta’s Adult Interdependent Relationships Act, those who are found to be adult interdependent partners are conferred certain rights, benefits, and responsibilities similar to those of a married couple.
For example, if two people in an adult interdependent relationship go through a breakup, the Adult Interdependent Relationships Act may allow an ex-partner to make a legal claim over their shared assets, or it may assign responsibility for debts that were accrued during the relationship. Having a cohabitation agreement in place may prevent one partner from unjustly profiting from the relationship breakdown by leaning on the provisions in the Adult Interdependent Relationships Act.
The Adult Interdependent Relationships Act sets out two situations that could lead to the existence of an adult interdependent relationship, those being either:
- the couple has lived in a relationship of interdependence for a continuous period of at least three years, or of some permanence if there is a child of the relationship by birth or adoption, or
- the couple has entered into an adult interdependent partner agreement.
The Adult Interdependent Relationships Act defines a relationship of interdependence as a relationship outside of marriage in which two people:
- share one another’s lives;
- are emotionally committed to one another; and
- function as an economic and domestic unit.
Section 1(2) of the Adult Interdependent Relationships Act sets out a list of factors to be considered in determining whether a couple functions as an economic and domestic unit. Among other things, the list includes:
- the degree of exclusivity of the relationship;
- the conduct and habits of the couple regarding household activities and living arrangements;
- the extent to which they contribute to each other’s well-being; and
- the care and support of children.
An adult interdependent partner agreement is a formal document that two people sign indicating that they are in an adult interdependent relationship. The agreement must be in the form set out in the Adult Interdependent Partner Agreement Regulation.
The most common elements of a relationship that a cohabitation agreement covers are:
- the division of assets and property;
- the division of debts;
- the exclusion of certain property from division;
- the responsibility for paying bills and other expenses; and
- decision-making responsibility and parenting time relating to children and partner support.
Importantly, section 37 of Alberta’s Family Property Act states that property covered by an enforceable cohabitation agreement is excluded from the property division rules established by the Family Property Act. Under the Family Property Act, a cohabitation agreement is only enforceable if the parties acknowledge, in writing, that:
- they are aware of the nature and effect of the agreement;
- they are aware of the possible future claims that they may have under the Family Property Act;
- that they agree to give up these claims to the extent necessary to give effect to the agreement; and
- they are executing the agreement freely and voluntarily without any compulsion from the other party.
In a situation where there is a disagreement between partners as to whether an interdependent relationship exists, the matter may end up before the court. This can arise when the relationship breaks down, and a partner seeks to enforce their rights under the Adult Interdependent Relationships Act by, for example, making a claim for spousal support.
An example of the Court’s approach to this issue is illustrated in the case of Ross v. Doehl. This matter involved a relationship in which the partners had differing views of their commitment to one another. The Court examined the factual background of their relationship in detail and referred to the criteria for a relationship of interdependence, as defined in the Adult Interdependent Relationships Act.
In concluding that the partners had, in fact, been in an interdependent relationship, the Court stated that a flexible approach was appropriate. It is important to consider the parties’ unique personalities, economic circumstances, work arrangements, and social views. A standard approach does not fit all relationships, and even in non-traditional relationships, the Court may decide that a relationship of interdependence exists.
The experienced lawyers at Dunphy Best Blocksom LLP work closely with clients and take a compassionate approach to understand each client’s unique family circumstances and needs. Our outstanding team of family lawyers can help you create an effective cohabitation agreement that addresses your concerns, giving you confidence and peace of mind. To discuss your matter further or to schedule a confidential consultation with a member of our team, reach out to us online or contact us at 403-265-7777.