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Common Law Issues The law regarding common law relationships is different than in cases of divorce. Discuss the issues that affect unmarried couples here.

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Old 01-20-2016, 10:26 PM
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Default Common-law Separation

Seeking advice for someone else.

Common law relationship, approximately 6 years, 2 kids aged 5 and a baby 10 months old.

Purchased house after a year of dating however it is in Mom's name only, mortgage and title.

Dad decided to leave the resistance and stay with a relative, which is 45 minutes away from the home they bought.

Mom was off work for 5 years, other than a couple month job as a secretary and the odd cleaning job. She just started back to work full time in December. Dad makes about $80,000k a year, mom will make around $40,000k a year.

Dad has paid a lot into an rrsp over the past 6 years, mom has invested none due to not working.

Questions,

Does Dad have a claim to the house?

Does mom have a claim to any increase in rrsp value?

Would mom be entitled to any sort of spousal support?

When would Dad have to start paying child support?
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Old 01-20-2016, 10:48 PM
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Quote:
Originally Posted by Berner_Faith View Post
Does Dad have a claim to the house?
Nope. They were common-law and his name isn't on it. He may have a case for unjust enrichment if he contributed to the down payment and paid more expenses than fair market rent would indicate.

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Originally Posted by Berner_Faith View Post
Does mom have a claim to any increase in rrsp value?
Nope. They were common-law and her name isn't on it.

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Originally Posted by Berner_Faith View Post
Would mom be entitled to any sort of spousal support?
Ugh, I hope not. They were common-law and she now works full time.

She benefited from the relationship while it was happening, and now that it's over, she's on her own.

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When would Dad have to start paying child support?
Well, the quick answer with lots of assumptions is that he should be paying from the moment he moved out. Obviously, it depends where the kids live though. If they are with him, he should be RECEIVING child support. If they have 50-50, they should each be paying each other as per offset.


Common-law relationships are fraught with peril as far as finances go. As they did not marry, they are not assumed to have been one financial entity or have any ongoing obligation to one another. There's no equalization except for things that are in both names. Otherwise he takes his stuff and she takes hers.

All that said, it's all about negotiation, and settling it like adults instead of fighting. If paying her a small amount of support or offering her a share of the RRSP or relinquishing a claim on the home keeps them out of court, that could still cost less money overall. Same from her perspective. If giving up on spousal support in exchange for keeping the entire value of the house saves money that would be wasted fighting, she should go for it. They'd each have to crunch some numbers to determine where their wins and losses would be.
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Old 01-20-2016, 10:55 PM
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Those were all my first assumptions as well.

Dad says he is entitled to part of the house because he paid the mortgage on the house over the years when she was a stay at home mom. Mom says if that's the case, she feels she is entitled to SS because she was a stay at home mom for 5 years and that is how it worked for them.

Mom has no problem not claiming the rrsp, it sucks for her future but she is young enough. Dad left the house and moved in with a relative, 45 min away from the house and the daughters school. 50-50 is not doable when he lives that far away, dad realizes that but they are in a disagreement as to when CS should start. Mom says right away, although it would only be half for Jan since the month is half over, dad says not until Feb.

As for bills, I think most are separated other than vehicle insurance but dad has his vehicle and mom has hers.
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Old 01-20-2016, 11:14 PM
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He may well have a case for unjust enrichment given he would have been increasing the equity of the home in her name (assuming he was paying mortgage etc as she wasn't working).
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Old 01-21-2016, 10:29 AM
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Quote:
Originally Posted by Berner_Faith View Post
Dad says he is entitled to part of the house because he paid the mortgage on the house over the years when she was a stay at home mom. Mom says if that's the case, she feels she is entitled to SS because she was a stay at home mom for 5 years and that is how it worked for them.
Pretend they had not owned a house, but only rented. He would have paid all their expenses, and she would have a greater claim on SS because he directly supported her. Neither of them walks out with an asset.

However, in this case, not only did he support her, but he increased her equity in the house. She walks out with an asset. So she has received a lasting benefit that lingers after the breakup that she would not have had they only rented.

The important thing here is that they were common-law and their finances weren't mingled. They basically had a deal that he would pay all their expenses while she stayed home. He knew the house was in her name when he paid down her mortgage. He basically paid her a bunch of rent and she, as the landlord, benefited.

I can see both their points of view. You make decisions like that when you believe a relationship is going to last forever. But now that the relationship is over, they have to sit down and look at their past like it was a business relationship.

So, does a fair share of the house for him (say half the increase in value over the course of the relationship) come to about the same amount as a midpoint SS calculation for two and a half years (half the duration of the portion of the relationship where she didn't work)?

Personally, I think the easiest thing would be for each of them to relinquish their claims. She walks away with her increased net worth but has no ongoing SS. He walks away without any share of the house, but has no ongoing SS obligation. No expensive court fighting, no hassle of paperwork and a clean break.

Quote:
Originally Posted by Berner_Faith View Post
Dad left the house and moved in with a relative, 45 min away from the house and the daughters school. 50-50 is not doable when he lives that far away, dad realizes that but they are in a disagreement as to when CS should start. Mom says right away, although it would only be half for Jan since the month is half over, dad says not until Feb.
They would be so much better off worrying about the kids instead of the money. Does the Dad plan to see them at all? Does he intend to move closer as soon as he can? Would her giving him a share of the house enable him to buy a house nearby? Would he be willing to pay some SS if that happens? If she has to take out a loan or increase her mortgage so that he gets his money, maybe he can pay her SS in the amount she would need to repay that loan.

What financial arrangement can they come to that would give the most benefit to the KIDS?

The five-year-old is probably very sad that Dad left, and may wonder what he/she did that made Dad suddenly want to stop being around him/her. And the baby is missing out on important bonding time.

Last edited by Rioe; 01-21-2016 at 10:32 AM.
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Old 01-21-2016, 10:38 AM
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I agree. Their focus has to be on the kids. Dad hasn't really said what he wants to do, other than when he left said he will support the kids but she isn't getting a dime from him.

I think she will probably end up selling the house, she hasn't worked in 5 years and has no credit, she won't be able to re-mortgage to pay him out. She wants to keep the house for the children, but doesn't know if that is doable at this point.

Dad hasn't said when he will see the children again. The poor 5 year old was beside herself this morning because her Dad always drives her to the before school program and he wasn't there.

Dad says he needs space, doesn't know what he wants. To top it all off, a wedding was planned for the fall. Cold feet I guess, but now it has left both of them in a hard place.
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Old 01-21-2016, 12:12 PM
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One way to look at it would be that Mom benefited financially because Dad paid the mortgage while she was home with the kids (so she didn't have to pay accommodation costs). But Dad also benefited financially from this arrangement because Mom looked after his kids (presumably they are his?) so he didn't have to pay child care costs. So maybe the best thing to do is like Rioe says, call it a wash, Mom keeps the house and Dad doesn't have any ongoing SS obligations.

I agree, this is a pretty sad situation, especially if Dad has basically dropped out of the kids' lives.
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Old 01-21-2016, 12:21 PM
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Well Dad needs to gather all the financial information he has and complete an equalization statement.

lots of examples online.

The important strategy here is to sit down with ex and work out a plan that leaves them both in a equal position and both with equal rights and access to their children.

He is a fool if he scurries off 45 mins away and gives her custody. He needs to take stock of his finances, find somewhere closer and work with ex to ensure they both leave the relationship with something. You plan for a lifetime, of course, but now you need to face the real situation and plan for a future of 2 innocent children wanting and needing both parents in their life.
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Old 01-23-2016, 02:31 PM
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So Dad is attempting to lay claim on the house saying mom will have to sell it because they lived together in the house for 4 years.

He is now on a rampage because mom told him child support would have to start being paid by Feb 1. He wants shared access, which mom is not opposed to, however he lives 45 minutes away now and has no desire to move back. How can he have shared access when he is 45 min away from the one child's school and the others daycare provider.

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Old 01-23-2016, 02:38 PM
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Maybe mom could propose that as far as CS goes, he pays based on offset as if they did in fact have shared custody. He would have to do that anyway if they are able to work out a way to make shared custody work given the distance.

I would think he should also pay his proportional share of daycare
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