April 3, 2013

I have been asked to answer the following questions regarding the recent implementation of the new BC Family Law Act.



1. What is a common law relationship based on the new laws?
2. How long do individuals need to cohabit together (consecutively) in order to be deemed "legal" common law partners?
3. How are assets regarded in a common law relationship: before, during, and after the common law relationship?
4. How is personal injury(ies) addressed in common law relationships: before the 24 month period and after the 24 month period.
5. Cohabitation agreement, prenuptial agreements, other agreements: how do these differ and how do they impact common law relationships before, during, and after a common law relationship?
6. Having an agreement versus not having an agreement; what are the impacts and outcomes?

Not being a lawyer, I must be very careful how I answer them. First of all I will offer a few comments on property and debt.
Who owns what? This has not been an easy question to answer in the past. Recently, the co-owner of the Vancouver Canucks Francesco Quilini argued with his estranged wife,Taliah Aquilini, over an extensive wine collection valued at $789,000. He won (for now.) Click here to read the full court ruling
The reference to the phrase ‘for now’ has been made to illustrate that court rulings on property ownership may change over time. Courts may intervene and rule upon disputes and reapportion property unequally.

Property ownership has truly evolved with the credit society as well. Creditors have rights to family property in some cases, too. Car loans are a good example of this where people have possession of an asset that is owned by someone else. The lender may file a security interest in the Personal Property Security Registry to protect its interest in the vehicle.

In marriages and common law relationships, people most commonly acquire property over time. In the past, before the new exempted property provisions, who owned the property could be subjected to intense debate. Now, it is a bit clearer. Whatever you bring into the relationship is yours.

As outlined on the ELAN (electronic legal aid news) website, property that is not considered family property under the new legislation includes:

• the assets that each spouse acquired before the relationship started,
• Property received during the relationship, like gifts and inheritances received by one spouse,certain kinds of court awards, and certain kinds of insurance payments.
• Excluded property belongs to the spouse who acquired it, except for any increases in value that happened during the course of the relationship.

Family debts in the past have caused considerable consternation as well - especially in those cases where all the debts are in one spouse’s name. This happens far too often where one of the spouses has a bad credit rating and the other one has a good one. The one spouses loads up the debts in his or her name, and if a separation should occur, the pressure is all on the one with the good credit rating.

In fact, far too often, a separation could trigger a bankruptcy for the spouse with the good credit rating while the one with the bad credit rating is long gone.

In the past the issue of debt was mainly one of liability on a contract. You had to sign the contract to be legally liable. This is still true with respect to the creditor – i.e. the creditor will only pursue the person (debtor) who signed the contract. And, for the spouse to go after the other non-liable spouse was complicated and time-consuming.

Now, the new legislation says that the debts incurred during the relationship that are still owed on the separation date, or are incurred to maintain family property after separation - are assumed to be shared equally unless other arrangements are made in an agreement or court order.

Although the person signed on the contract ultimately faces creditor pressure directly, the new legislation sets a tone for separating families that family debts are to be shared equally.

For further information see:

http://resources.lss.bc.ca/pdfs/pubs/Guide-to-the-New-BC-Family-Law-Act-eng.pdf

 

More on the new family law changes later.