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Financial considerations for common-law couples

Unmarried couples who are living together in Ontario may not be aware of the potential divorce-like problems that can arise when common-law relationships come to an end. In short, a common-law relationship is defined as a heterosexual or homosexual couple who have lived together in a relationship that resembles marriage for a minimum of 36 consecutive months, without any major separation.
While property owned by a divorcing couple is equally split according to the law, the rules pertaining to property division for common-law couples is ill-defined, according to authorities on the issue. Since many common-law couples mingle their assets in the same way that married couples do, it may be exceedingly difficult to come up with a just way to divide those assets amicably. This is a growing issue in Canada, reportedly.
According to authorities, a possible remedy to this issue is a cohabitation agreement. This is a legal agreement into which unmarried couples can enter, similar to a marriage contract. Regardless of whether common-law couples draw up a legal agreement, there are three areas of finances they ought to consider while living together, authorities suggest. One is their overall financial plan, not just for the short term but also for the long term, especially as it applies to savings. The second relates to daily living expenses.
While many couples pool together their money without any sort of accounting, it may be more prudent to come up with a documented plan on how they will divide and pay living expenses. The third thing is debt. Assistance in paying down debt between couples is recognized in marriage but not in common-law relationships, so individuals who are not married should get a cohabitation agreement if they wish to be credited for helping a partner pay down a debt. Couples who wish to learn more about such an agreement would be best served by seeking out a family law lawyer.
Source: The Huffington Post Canada, “Common Risks for Common-Law Relationships“, Ashley Redmond, October 15, 2014