In British Columbia, people living in a marriage-like relationship can be considered spouses for certain legal purposes which can affect what happens to an estate when one partner dies.
Are common-law couples considered spouses in BC?
For the purposes of BC’s Wills, Estates and Succession Act (WESA), two people are generally spouses if they are married or have lived together in a marriage-like relationship for at least two years. WESA also provides rules about when spouses cease to be spouses.
This means that being unmarried does not necessarily mean your partner has no legal rights in relation to your estate, however, the exact legal consequences depend on the circumstances and the legislation that applies.
What happens if a common-law partner dies without a will?
This is one of the most important reasons common-law couples should have an estate plan. Dying without a a will can have significant consequences for how an estate is distributed. Under WESA, if a person dies without a will and leaves a spouse but no surviving descendants, the intestate estate is distributed to the spouse.
If the deceased leaves both a spouse and descendants, different rules apply, including a preferential share for the spouse followed by distribution of the remaining estate between the spouse and descendants.
The amount of the preferential share can also depend on whether all of the deceased person’s descendants are also descendants of the surviving spouse. Under the current legislation, the specified preferential shares are $300,000 where all descendants are common to both spouses and $150,000 where they are not, subject to the legislation and any prescribed changes. These rules can become particularly important in blended families.
Why Common-Law Couples Shouldn’t Rely on Default Estate Rules
A surviving spouse may have rights under BC legislation, but relying entirely on default legal rules may not produce the result a couple actually wants. For example, a couple may want to leave specific assets to each other, provide for children from previous relationships, make gifts to other family members, make arrangements for a business or establish trusts for beneficiaries. A will allows you to make your intentions clear rather than leaving everything to default rules.
What about the family home?
Real estate can create additional considerations. The way the property is owned can affect what happens when one partner dies. A common-law couple may own their home jointly, in one person’s name, in different proportions or through another ownership arrangement. This is one reason it is important to look at property ownership and the estate plan together. A will cannot be considered in isolation from the way your property is legally owned.
What about RRSPs, TFSAs and life insurance?
Common-law couples should also review beneficiary designations. For example, a spouse or common-law partner can qualify for specific treatment under the federal rules governing RRSPs and TFSAs. A common-law partner may also be named as a beneficiary of a life insurance policy.
Your estate plan should consider your will, property ownership, beneficiary designations and other legal documents as parts of one overall plan.
What if you have children from a previous relationship?
This is particularly important for blended families. Imagine a person who has:
- A common-law partner
- Two children from a previous relationship
- A home owned jointly with the current partner
- RRSPs
- Life insurance
- Investments
Without careful planning, there can be competing interests between providing for the surviving partner and preserving an inheritance for children. While BC law contains specific rules that may apply to spouses and descendants, those default rules may not reflect the family’s desired outcome. A carefully prepared estate plan can address these competing priorities.
What documents should common-law couples consider?
Depending on your circumstances, your estate plan may include the following:
- Wills
- Powers of attorney
- Representation agreements
- Beneficiary designations
- Property ownership arrangements
- Trusts
- Business succession documents
- Other agreements or planning documents
When should common-law couples update their estate plan?
It is important to consider reviewing your plan after any major life change. This includes when you first move in with a partner, after you have lived together for two years, on the birth of a child, separation, reconciliation, the purchase of any major asset, particularly real estate, the death of close family members and any other major life event.
Life can be busy, particularly at stressful times, so often estate planning will not be a priority at these times, but it should not be ignored entirely. Even if you have not had the opportunity to make suitable arrangements during major life transitions, doing so after the dust has settled can be prudent to ensure you are prepared for the future.
Conclusion
For common-law couples, estate planning is about more than relationship status. While your partner may have certain rights under BC law, default rules may not reflect everything you want for your partner, children, home, or other assets. A coordinated estate plan can provide clarity about who receives your assets, who manages your affairs, what happens to your home, and who can make financial and healthcare decisions if you become incapable. Planning together can provide peace of mind by helping protect each other during your lifetimes and ensuring your wishes are clear for the future.
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Disclaimer: This blog post is for informational purposes only and should not be construed as financial or legal advice. Consult with qualified professionals to create a personalized estate plan suitable for your specific circumstances.
