No right of equalization when a common-law spouse dies

June 20, 2018 Ian Hull advocatedaily 0 Comments

Estates & Wills & Trusts

No right of equalization when a common-law spouse dies

By Kathy Rumleski, Contributor


Ian Hull

Toronto estates and trusts lawyer Ian Hull is hoping a decision in a suit of unjust enrichment he filed before the Supreme Court of Canada (SCC) will bring much-needed clarity to the right of equalization for common-law spouses.

“This case should provide guidance on how to calculate unjust enrichment claims,” he says.

The courts may be more sensitive and generous to common-law spouses today than in the past, but an unmarried partner is still left vulnerable when it comes to the right of equalization, Hull explains.

“That’s the reality unless your partner has taken steps to ensure you are properly provided for,” he tells “The courts should be affording the same protection for common-law partners as married spouses.”

The right to equalization upon the death of a husband or wife is certain when a couple has been married, explains Hull, co-founding partner of Hull & Hull LLP.

“However, a common-law partner in Ontario has no right to seek an equalization of net family property,” he says. “The person would have to make a claim against the estate and argue that there is a need for funds from the estate that were not provided for.”

Hull says a significant problem for common-law spouses is that there is no set calculation for courts to apply to determine a reasonable amount a partner should expect.

“You have to live with some significant worry about how much you might receive. It becomes an issue of access to justice. You have to hire lawyers and pursue these claims and there is no guarantee of how much you will be awarded.”

By virtue of the death, there is no more income so the courts have to look at the assets, the income flow and the needs of the surviving spouse, Hull says.

In the case before the SCC, an ex-wife agreed to pay the premiums on a man’s life insurance policy to ensure funds for their children in the event of his death, he says.

She paid the premiums for 12 years after the breakup but did not know that during that time, the man irrevocably designated his common-law partner as the beneficiary, Hull says.

“The policy money went to the common-law spouse. We argued that was unjust enrichment as my client paid the premiums,” he says.

While Hull initially won the case, the Ontario Court of Appeal overturned the decision, saying the application judge had erred in his decision to award the money to the ex-wife.

“This whole issue of unjust enrichment, which is a fundamental part of how we make claims for common-law spouses upon death, is being revisited by the court,” he says.

“It’s best to set up an estate plan before death and get your assets organized. Don’t leave it for the system to decide, he says.

Along with assets and the needs of the surviving partner, Hull says another fundamental element a court will take into consideration in awarding a sum is the moral obligation to any children.

Since a 2004 decision involving the moral obligations of dependent relief, Hull says the courts have been sensitive to all parties who may require support, including children.

“It’s necessary to divide the estate in a fashion that reflects the moral claims someone might have,” he says.

A common-law spouse may also make a claim on the estate using the argument of unjust enrichment, Hull says, adding this claim is based on the belief that one party was enriched due to the other partner’s effort, work, or financial contribution or that one person has sacrificed time or money that enriched the other.

“The surviving partner would argue he or she is entitled to a certain amount but needs more because they were an integral part of the success of the estate.”

Hull cautions common-law couples to be aware of their vulnerabilities in the relationship when it comes to an estate right from the beginning.

“There are still misconceptions about rights in a common-law liaison. A married couple is treated with much more certainty and predictability when it comes to calculations upon death.”

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