Avoiding Spousal Support by Keeping Finances Separate?

If a couple keep their finances separate during a common-law relationship, will that provide the basis for avoiding spousal support should the relationship end? The short answer is no. Minimal sharing of expenses and lack of commingling of finances and assets are factors that the court will consider, but on their own those factors will not provide grounds for avoiding spousal support if you are in other respects in a “marriage-like” relationship.

How to determine if you are in a “marriage-like” relationship

In Weber v. Leclerc, 2015 BCCA 492 the parties began cohabiting in 2002, and continued to live together until 2011 or later. Each had children from previous relationships. While they agreed in their descriptions of many aspects of the relationship, they did not agree on whether their relationship made them “spouses” for the purposes of the Family Law Act, S.B.C. 2011, c. 25 (the “FLA”), which among other things, governs the obligation to pay spousal support in BC.  Ms. Leclerc sought a declaration that the parties were not spouses.

Weighing the factors

The question of whether a cohabiting couple are in a “marriage-like relationship” is a question of mixed fact and law that requires a broad approach – see here for a discussion of the factors the court will consider.  The trial judge in Weber v. Leclerc reviewed the evidence of the parties’ relationship and noted that several factors supported the idea that the relationship in this case was marriage-like: the cohabitation was coupled with romantic and sexual relations; it appeared that the couple’s intentions were to remain together for an indefinite, but relatively lengthy, period; and there were significant social interactions between them, and those interactions closely resembled those typical of married couples. For many purposes, they treated themselves and their children as a family unit. The judge found an expectation on the part of the parties that they would, during the currency of their relations, provide one another with emotional support.

On the other hand, the judge noted that the parties for the most part kept their finances separate, and that there were other factors that suggested something other than a marriage-like relationship, including the somewhat limited role each of the parties undertook in relation to the other’s children and the fact that the parties treated themselves as “single” for income tax purposes and other government programs. However, weighing all of the various factors, the trial judge concluded that the relationship was marriage-like – in other words, the common-law couple were found to be spouses within the meaning of the FLA.

Avoiding spousal support by pointing to lack of financial interdependence

Ms. Leclerc appealed from the finding that she and Mr. Weber were spouses, emphasizing the lack of financial interdependence between her and Mr. Weber. For the most part, the parties kept their finances separate. Ms. Leclerc assisted Mr. Weber by loaning him money from time to time and Mr. Weber repaid those loans. The Court of Appeal agreed that financial interdependence was properly a factor in assessing whether their relationship was “marriage-like”, but ultimately concluded that the judge made no error in finding that it was not decisive.

Financial dependence not a requirement of a marriage-like relationship

The Court of Appeal found that while financial dependence may at one time have been considered an essential aspect of a marital relationship this is no longer so. Today marriage is viewed as a partnership between equals and there is no principled reason why marital-equivalent relationships should be viewed differently. Though economic dependence or interdependence exists in many modern marriages and marriage-like relationships, it would be difficult to characterize such dependency as being an essential characteristic. In some relationships there is a complete blending of finances and property; in others, spouses keep their property and finances totally separate; and in still others one spouse may totally control those aspects of the relationship with the other spouse having little or no knowledge or input. The law recognizes that the intention to live in a marriage-like relationship need not include an intention to be financially interdependent. Financial dependence is a factor, but it is one of many to be considered, and financial interdependence will not on its own support avoiding spousal support.

Bottom line on keeping finances separate as a way of avoiding spousal support

There is no checklist of characteristics that will invariably be found in all marriages, but factors the court will consider include economic support (or lack thereof), shared shelter, sexual and personal behaviour, services, social activities, and children, as well as the societal perception of the couple. These elements may be present in varying degrees and not all are necessary for the relationship to be found to be marriage-like. Financial dependence is one factor that supports an inference of a marriage-like relationship, but the presence or absence of any particular factor is not determinative of whether a relationship is marriage-like. As such, keeping finances separate during the relationship will not on its own provide grounds for avoiding spousal support.