08 October 2010

Okay, so there's (probably) a new law coming. Now what?

Important Update: The Family Law Act was introduced on 14 November 2011. See my posts "The Early and Unlamented Deaths of ss. 90 and 120.1: Government takes quick action on parental support and unmarried persons' property agreements" and "Family Law Act Introduced!" for more information.

Readers of this blog, or any local newspaper really, will know that the provincial government is planning on introducing a brand new Family Law Act sometime in 2011 that will revolutionize family law in British Columbia. I've summarized the proposed new Family Law Act in a previous post.

In September, I published another post which talked about how bill becomes a law and how a law comes into force. One of the points I was trying to make was that the Family Law Act described in the government's White Paper (PDF) doesn't have any legal effect at present and may not look anything like the Family Law Act that comes into force, and a result you shouldn't make any decisions on assumptions drawn from the White Paper.

That being said, I was recently consulted by a fellow who wanted a cohabitation agreement. (I have written at length about why cohabitation agreements are a really bad idea under the current law if the point of the agreement is supposed to be about protecting property; read my post on the subject, "Why you DON'T want a cohabitation agreement," before continuing.) This is an important problem because if the new law looks anything like the White Paper's proposal, the property interests of common-law couples and married couples are going to look very different than they do right now and, either way, the dilemma posed by s. 120.1 of the Family Relations Act will no longer exist.

So what do you do now? Frankly, I'm not sure, and any answer is going to involve an awful lot of assumptions.

If the Family Relations Act is replaced and if the new act looks like the White Paper's proposal, lots of things are going to be different:
  • common-law couples will have the same property entitlements as married couples
  • the value of property brought into the relationship will be excluded from sharing, as well as certain other kinds of property like court awards and inheritances
  • property bought with excluded property will also be excluded from sharing
  • agreements about property will only be set aside where there is a defect in the agreement or how the agreement was entered into, such as a misunderstanding about the nature of the agreement or a failure to disclose the existence of an asset
In circumstances like this, it's not clear what a marriage or cohabitation agreement about property might accomplish. Perhaps such agreements would more clearly define which assets are excluded from sharing, or address how excluded property will used during the relationship. Perhaps they would attempt to regulate how property acquired during the relationship will be paid for, or how such property would be divided at the end of the relationship.

Whatever winds up happening, the only thing we know for certain is that the Family Relations Act is the law of the land, and this is the law you need to be thinking of when planning a new relationship. We can't say for certain that the Family Relations Act will be replaced; if it's replaced, we don't know what the replacement is going to look like or when it will come into effect. We also don't know how the replacement will deal with relationships that are ongoing when it comes into effect. Will there be an exemption for existing relationships? If the new law applies to existing relationships, will it apply right away or will there be a grace period?

I think that if you are planning on a new cohabiting relationship and need to be absolutely sure about the law that will apply to your relationship, you're best off waiting until the bill passes final reading. Your second best choice would be to have an agreement not about property but an agreement to negotiate an agreement about property when the content of the new law is known.

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