In Canada, a common law partnership is a legally recognized union of two people who cohabitate but are not married.
Common law in Nunavut requires cohabitation for at least 12 consecutive months. An unmarried couple that has a child together may also qualify under the common law definition.
These arrangements are more prevalent in Nunavut than traditional marriages. That's because these relationships present many advantages.
Yet, there are some significant drawbacks Nunavut couples should consider before entering one of these arrangements. We're talking about the benefits and disadvantages of Nunavut common law marriages in this guide.
How to Prove to CRA That We Are Common Law
The Partnership Act of Nunavut governs common law relationships. Under the Partnership Act, each member of a common law partnership has similar rights and obligations as do spouses in traditional marriages.
One such obligation is filing your common law partner on your individual taxes. The Canadian Revenue Agency (CRA) will then determine your household's tax credits and benefits based on you and your partner's combined income.
Filing taxes together offers significant benefits. But first, you must prove to the CRA that you're in a common law partnership by the end of the month following the month you became common law.
Shared Ownership of Residential Property
Do you and your partner own a home together? Submitting proof of ownership to the CRA should suffice as proof of your common law arrangement.
Proof of ownership includes deeds, mortgage statements, and homeowners insurance documents. However, keep in mind that these items must list both common law partners as owners to qualify.
Joint Leases or Rental Agreements
You and your partner can still prove you're common law even if you don't own property. The CRA will also accept lease and rent agreements as proof of your common law partnership.
Again, make sure the documents you submit list both partners. Also, these documents must show that you and your partner have rented or leased together for at least 12 consecutive months to qualify.
Bill for Shared Utility Accounts
Gas, water, cell phone, and electricity bills that both common law partners pay should also suffice as evidence of your relationship. These joint bills should list both partners and prove that you've lived together for 12 plus months.
Other Important Documents
What happens if you don't have the above documents to prove a shared address? The CRA will accept each partner's driver's license or other identification documents as long as they show a shared address.
How Long After Living Together Are Considered Common?
In Nunavut, couples must live together for 12 consecutive months before claiming common law status. This 12 month period includes any time you and your partner separated as long as the separation lasted 90 days or less.
What Is a Cohabitation Agreement?
Like traditional marriages, Nunavut common law partnerships end through the divorce process. But unlike traditional marriage, there are no prenuptial agreements for common law arrangements.
That means your personal assets will be at risk in the event that you and your partner decide to separate. Luckily, cohabitation agreements offer protection in situations like this one.
A cohabitation agreement is a legal document specifying how assets and liabilities will be divvied up after separation. Some cohabitation agreements also decide the issue of alimony.
Is a Cohabitation Agreement a Good Idea?
If you or your partner has significant assets coming into the partnership, a cohabitation agreement is a good idea. Otherwise, both partners are entitled to an equal share of the growth of joint assets upon a divorce.
Can I Make a Cohabitation Agreement Before My Spouse Moves In?
You and your partner don't have to be common law to have a cohabitation agreement. In Nunavut, many partners draw up cohabitation agreements when they move in together.
Why would unmarried partners who aren't common law get a cohabitation agreement? This legally binding document can also protect personal assets in the case of a breakup.
How Much Does a Cohabitation Agreement Cost?
The exact cost of a cohabitation agreement in Nunavut depends on two factors: the fees of individual counsel for each partner and the cost to actually draft the cohabitation agreement.
The average cost to draft a cohabitation agreement is $1,945. Some attorneys will do cohabitation agreements for a flat rate, ranging from $2,000–$3,000.
Canada also requires individual counsel for each member of a cohabitation agreement before it's signed. Each partner should employ a different legal expert, who will explain the impact of the agreement should you both sign.
In Canada, the average lawyer with five years of experience charges $280 per hour. Some Nunavut attorneys may offer free consultations.
In all, that means you and your partner may pay between $2,505–$3,650 for a cohabitation agreement.
Do I Need a Lawyer for a Cohabitation Agreement?
Some online platforms offer DIY cohabitation agreement services. However, without the help of an experienced family lawyer, these agreements may not stand up in court.
That's why it's always recommended that partners seek legal assistance with cohabitation agreements.
Do We Have to File Taxes Together?
While each individual partner can file his or her own taxes separately in Canada, both common law partners must list the other's:
- Legal name
- Social insurance number
- Net income
If you and your partner separate for 90 or more days, you do not have to name them on your taxes.
Forgetting to change your marital status or claiming single status when you're living common law has tax consequences. For example, the CRA could reassess your taxes, deny you benefits, and apply interest to back taxes.
Declaring your common law partner isn't just required by law. It's also an excellent way to max out deductions and tax credits. For example, if you and your partner have a child together, you can claim the Family Tax Cut.
What If We Have Children Together?
Unmarried people who live together and share a biological or jointly-adopted child can become common law partners in Nunavut. You can then claim that child and receive deductions on your tax returns.
However, if you and your common law partner's combined household income exceeds a certain amount, you will not be able to claim the dependant credit.
If you are eligible for claiming your child as a dependant, the lesser-earning parent should file the child on his or her taxes. The lower-earning partner should also claim childcare expenses.
What Not to Do in a Common Law Relationship
The biggest mistake people make is assuming that living together for a certain time period automatically grants common law status. This simply isn't true.
Assuming that your relationship qualifies as common law when it doesn't may have serious implications. For example, if one of you passes away without a will, the surviving partner has no legal rights to any shared property.
Failing to legalize the relationship with a cohabitation agreement also has implications for your children. Upon separation, the primary caretaker may forfeit his or her legal right to alimony, indirectly affecting the children.
What Is My Partner or Spouse Entitled To?
Unless there is an agreement outlining who's entitled to what, your common law partner can't claim half of your shared assets upon separation. This also applies to your and your partner's shared debts.
Common law separation without a cohabitation agreement can also result in one spouse losing the family home. Only the partner whose name is on the deed or lease has the right to stay in the family residence after separation.
What Happens If We Separate?
It's perfectly legal to kick a common law spouse out of a shared family home. However, if your name isn't on the house's deed or lease, you can't prevent your partner from re-entering the home.
What options do you have when it comes to common law separation in Nunavut? Couples who reside separately for more than 90 days are no longer considered in a common law relationship.
After the separation, each spouse keeps what belongs to him or her. Canada requires equal division of shared assets and debts. One partner may qualify for spousal support, but any child support or custody issues must be determined separately.
In addition to getting a cohabitation agreement, some common law partners also draw up a separation agreement. This is a legally binding document specifying which partner gets what.
Written verbal agreements about property division are not legally binding and typically won't stand up in court. Similarly, DIYing separation agreements may mean they aren't enforceable in Nunavut. If you want to ensure your rights, you should always work with a lawyer on these critical legal documents.
Newly Partnered and Need Insurance?
Common law in Nunavut is a legal way to make a life with another person without getting married. These partners enjoy many of the same benefits as traditionally married couples while together. But the separation differs, making cohabitation and separation agreements essential.
Have you and your partner recently become common law? Insurdinary has the best insurance quotes for you and your partner's new life together. Compare Insurdinary's insurance offers now!