Inheritance and Gifts Brought Into a Common-Law Relationship

A parent leaves you money, or your family gives you a gift toward a down payment. You put it into the home you share with your common-law partner. Years later, the relationship ends, and you both ask the same question: whose money is it now?

There is no simple statutory rule for unmarried partners, so the answer turns on the facts. This article explains the framework Ontario uses and what evidence tends to matter. It is general information, and a lawyer can apply it to your documents.

Why the married-couple rules do not apply

The family property rules, including equalization, apply to spouses who are married to each other. Unmarried partners are not spouses for property equalization. Ontario's guidance says common-law couples are not legally required to split property acquired while living together, and that equalization and its deadlines apply to married spouses.

So rules you may have heard about how inherited property is treated when married spouses separate are not the starting point for a common-law couple. Your position depends on other legal principles.

What does apply: contributions and unjust enrichment

Furniture and household items belong to the person who bought them, and common-law partners have no right to split the increase in value of property brought into the relationship. If you contributed to property your partner owns, you may have a right to part of it, but unless your partner agrees to pay you back you may have to go to court to recover your contribution.

The main legal route is unjust enrichment. Unmarried partners can make this claim, and where there is a joint family venture, the remedy is a proportionate share of the wealth accumulated, linked to contributions. There is no presumption of a joint family venture, and intent and conduct weigh heavily.

For inherited money or gifts, there is no simple rule to quote. How a court treats them depends on the facts, such as whose name the property was in, how the money was used, and what each of you intended. That is why the evidence is so important.

What the evidence often looks like

• Bank records showing where the money came from and where it went.
• Wills, estate documents or letters that explain the source of a gift.
• Any note, email or message about what the money was meant for.
• Records of who paid the mortgage, taxes and repairs after the money went in.

Time limits and agreements

The basic limitation period is two years from the day a claim was discovered, with a 15-year ultimate limit. That applies to claims such as unjust enrichment between former partners. When the clock starts depends on the facts, so do not wait to ask.

The best protection is an agreement made in advance. Unmarried partners who are cohabiting or intend to cohabit may enter a cohabitation agreement, which can cover ownership and division of property and support. Both partners must sign in front of a witness, each should use a different lawyer and exchange financial information, and it cannot decide decision-making responsibility or parenting time for children. An agreement is unenforceable unless it is in writing, signed and witnessed.

A court may set aside a contract or part of it if a party failed to disclose significant assets, debts or liabilities, if a party did not understand its nature or consequences, or on other contract law grounds. In one Court of Appeal case, property clauses in a cohabitation agreement were set aside because neither party understood the consequences for their property venture, while the spousal support waiver stayed in place.

What to do next

• Gather proof of the inheritance or gift: estate paperwork, transfer records, bank statements.
• Trace where the money went and which accounts, titles or debts it touched.
• Collect records of both partners' contributions to the home since then.
• Check title and mortgage documents to see whose names are on them.
• Note the date the relationship ended and speak to a lawyer promptly about time limits.
• If you are still together, consider a cohabitation agreement that deals with gifts and inheritances.

Frequently asked questions