Phaedra Klodner, Family Law Lawyer (00:00.062)
Hello everyone, I have Phaedra Klodner with me today. Phaedra is a very experienced family law lawyer. Hello everyone. Within her more than 25 experience, Phaedra has devoted herself legal career to family law, channeling her passion and unwavering commitment to guiding clients towards optimal settlement outcomes. She has also been teaching at Wilfrid Laurier University for more than 10 years.
inspiring using her wealth of knowledge and experience to inspire the next generation of legal professionals. Specifically, what are you teaching, Phaedra? So I'm teaching Introduction to Law at Wilfrid Laura University. And essentially, it's a program that permits students to, or at least some of the students, to do a program here in Ontario, and also to complete their law degree in Sussex, England. And so for part of the period of time, they're going to be at
Laurier. The other period of time they're going to be in Sussex, England and essentially they get their undergraduate degree and they get their law degree in one year less. It's an excellent program and it's something that I have a lot of passion for. Many of my students have contacted me afterwards to tell me that they're at this law firm or that law firm or this organization and it makes me really proud of the students that I've taught.
And if you go to Rate My Professor, there are some really good raving reviews there. Some not so good, some not so good, but generally speaking, they're pretty good. Yeah. And, you know, I always trust, you know, if it's 20 something years old, tells you, you know, someone is great. And that's always it's interesting for me to see, to review. Thank you. Yeah. And also, Phaedra, just was my lawyer presenting my case and we had we really connected and had some.
from memories even though during a very challenging period of my life. So super appreciative. And we've developed a friendship. Yes. I think. Yes. And thank you so much. And I really appreciate that. So and last time when Fajr came to talk to my clients about the fundamentals of the legal aspects of a separation and divorce. And we talked about what about common law Phaedra mentioned.
Phaedra Klodner, Family Law Lawyer (02:23.678)
And that's why we're here today. Before we dive into the intricates of common law separation, I want to just to send a disclaimer that we're not providing legal device here. No, we're not. Yeah. You should always seek your professional support, legal counsel. And we're just offering some general information here to give you some general idea of how different common law separation is. And before I dive into here,
I have actually a graph, so basically some stats from Stats Canada back in 2021, so three years ago. So it's mentioned that in all of the couples in Canada, 23 are actually common law relationships, which is...
It's very high. Yeah, it's actually a growing trend. Yeah, exactly. And if I look at my friends and family around, it's like, I didn't even know you were a con. They were like, yeah, we were never married. So it's more and more common. And specifically in Quebec and the territories, the numbers are even higher in Quebec is 43%. And I didn't know that. Yeah, Nunavut of it. It's 52%. So it's fairly high. But I feel like we have very limited understanding.
compared to other divorces. A lot of misconceptions out there with respect to common law couples. So I'm glad that you were doing this today to help to help people have some sort of general understanding. Yeah, even for my clients, I think there were two cases I encountered. I was like, I just found it fascinating. Like how, how limited knowledge we have on this front. So we're going to dive into when we talk about common law, I'm just going to ask you some questions and phage your answer. So what's the definition of a
common law relationship and just some caveat, we're talking about Canada here. Yes. And more specifically, we're talking about Ontario. So essentially, underneath the Income Tax Act, which again applies across Canada in that case, you are considered common law if you are living together for one year or more on a continuous basis. When you're looking for the purposes of family law, it is considered common law when you've been living together for three years or more.
Phaedra Klodner, Family Law Lawyer (04:37.342)
that's when you're considered spouses of each other. So one year for the purposes of income tax. Yeah, you can file a tax together. That's right. And then in terms of family law, typically it's three years to be considered a spouse. The language common law is not actually used in the legislation in terms of for family law, but the word spouse is used. So same as a marital marriage. That's right. In terms of...
in terms of definition of spouse when it pertains to support. And we'll get into that a little bit later on in this podcast. Okay, this is off the topic. Let's maybe not off the topic, because I didn't know the one year and three year difference, which is very interesting. So let's say, you know, work benefits, right? So I can cover my spouse, right? So can I cover my spouse if we're common law living?
together for one year or do I have to wait for that three years? No. So what happens with respect to benefits, it will depend upon the actual insurer who's providing the benefits coverage. No, great point. So you'd have to look at the actual definition that they provide with respect to common law. Maybe it's three months past the probation period, maybe it's six months, maybe it's one year. Again, you'd have to look at your actual policy to make that determination.
And that's something you may want to get assistance from counsel to see what the actual definition means. Because sometimes the language in those benefits coverage can be a little bit complicated. Yeah, no, absolutely. I get it. Yes. So, so if we just compare a common, not a common law divorce, right, depends on the length of your legal marriage. So you go, you get a divorce, you get legal counsel.
and there is some intricacy of how long can you apply for an official divorce? I think you have to be separated for one year. Right. So in terms of getting a divorce, you can only get a divorce obviously if you're married, right? You can't, there's no such thing as a divorce in common law relationships. Instead, it's called a separation. So if you are married and you wish to get a divorce, there's essentially three grounds to get a divorce. One is,
Phaedra Klodner, Family Law Lawyer (06:57.214)
living separate and apart for one year. And we also refer to that as no fault divorce. The second is cruelty, either physical or mental, in which case you would have to have evidence that in fact has happened. And you don't have to wait the one year. And then the third way is adultery. And you would actually have to have information regarding the Adulterous Act. And typically the person that you're alleging has committed adultery with your spouse would have to be served with the divorce.
documents as well. Yeah, that will basically make the divorce faster, not confined by the one year. But in terms of common law, there's no and that's actually a misconception saying, I want to get divorced from my common law spouse. There's no such thing. Because you were never married. Because you were never married. So we're talking about a separation. Talking about a separation. But again, that's a misconception. I've heard clients say, well, I want to get divorced from my common law spouse. Doesn't happen. Yeah. Do they still need a separation agreement?
they still need a special separation treatment, absolutely. Okay, okay. That's helpful. So I could start maybe, maybe this is a good segue to sort of talk about the main differences between common law spouse and a married spouse, right? Because again, a lot of myths about that. So the first thing is that a common law spouse and a married spouse are treated the same as it pertains to parenting decision making and parenting time. The same law typically applies.
And of course, it's always best interest of the children, all right, and if the Children's Law Reform Act. So that way you're treated the same. In terms of child support, you're treated the same as well. All right, and we have something called the Child Support Guidelines, and it's mandated by legislation. And essentially, you look at what parties' incomes are, and that dictates the amount of child support that has to pay. So it doesn't matter if you go to lawyer A or lawyer B or judge A or judge B, there's a standardized form.
A stable amount. For a stable amount for child support, that's exactly right. And again, no difference between a married spouse or a common law spouse. Let's talk a bit about spousal support. All right. With respect to spousal support, treat it basically the same. If there's going to be a claim made, accept that usually the threshold is three years. And above. And above. Save and accept if you have children. If you have children together,
Phaedra Klodner, Family Law Lawyer (09:23.23)
the courts can look at spouse support even if you were together. Let's say you have a child together, you separate 17 months later. The courts can still consider spouse support and as do lawyers depending upon what the circumstances of the parties are. And all the spousal support approach apply. There is a low number, mid number and high number. So we have something that's called SAGs or Spouse Support Divisory Guidelines. And basically every lawyer has access to that information.
And there's certain factors that they look at. Do you have children together? How long were you together for? Where are the ages of the children? What are the incomes? So let's say, for example, you're a common -law spouse and you separate and you separate after 17 months. And there's a decision made within the family that the father is going to stay at home to look after the children. Okay. And as a result, he has lost his employment. Even though that they're only together for 17 months.
he could have a potential claim for spouse support because he's been, and I'm gonna put these in quotes, economically disadvantaged as a result of the breakdown in the marriage or the common law or the common law relationship. So again, so on parenting decision -making, treat the same, child support, treat the same, spouse support, treat the same, where you see the huge difference though is on division of property. Yeah. I...
Even though when I list all this question, I had a sense because that's all the questions I heard from my clients going through is that's the gray area. That's very complicated. It's a very complicated. It's a very complicated area. Yeah. So and again, one of the one of the largest myths that they're out there that says, I've been with my common law spouse for one year. Let's say 20 years or 20 years. Do I have to share the house with them, even though the house is in my name?
pretty complicated area of the law. So I'm going to try to make it really short and quick and easy. But again, this is something that you should really talk to a lawyer about with respect to that. But essentially what you're looking at is if you're trying to make a claim against a spouse's property, and I'm talking about common law spouse, all right, you have to demonstrate somehow that you were instrumental or key in the acquisition, preservation, maintenance, or improvement of the asset.
Phaedra Klodner, Family Law Lawyer (11:46.718)
And so that person would then say, listen, if it were not for my direct or indirect financial contributions, you wouldn't have that interest in the property. Let me give you an example, because you might say, you know, Phaedra that sounds really complicated. So let me try to make it really simple. Let's imagine a situation where you have a common law couple and they're living in Kitchener and they're paying rent. And the arrangement is made that the common law spouse, I have a
call her the wife, even though not technically a wife, but the common law wife, decides that they're going, she's going to pay for the bulk of the expenses, the rental expenses. All right. And as a result, the common law husband has the opportunity to devote his resources to a cottage. Cottage is in his name. All right. And what happens then is they're together for a certain time period, let's say seven years, 10 years, they separate and
she approaches the common-law husband and says, I want part of the interest in the cottage. And he says, no, it's under my name. It's in my name. We're not married. And we paid and I paid all the bills. In that case, the court, the parties can consider that if it were not for the common-law wife paying for the bulk of the expenses for rental, he won't have that resource to contribute. He would not have that resources to the cottage.
And this is actually a true case. And so what happened in that particular case, the courts looked at it and said, okay, what did the common law husband have by way of equity, which is basically the value of the asset minus the debt, when they got together? What was the equity when the party separated? And the increase in that equity, the court said she should have.
50 % of that increase in the equity. So for example, if the equity was $100 ,000 when they got together and when they separated it was $200 ,000, in that case the court said you can have the first hundred, but the second hundred that accumulate during the course of the relationship, we're going to split that. And so the common law spouse had to pay the other common law spouse $50 ,000. So not exactly 50 -50.
Phaedra Klodner, Family Law Lawyer (14:06.59)
but rather the increase, one half of the increase in the equity. And the court held that if it were not for her contributions, he wouldn't have been able to afford the place. So she should get something out of it. So I think it's complicated in the sense that the key is that you have to prove your contribution. One. You have to prove your contribution. And in a lot of cases when people just merge their finances, like I...
pay the grocery like in rent, it's very clear because you got the rent receipt or something. But in other cases, it's hard. So I think the key and I want to ask in the it's when you enter into common law, probably think about it before you enter into that. But most people don't. They don't. Yeah, because they think they're going to be together for forever. As we all think. And remember, too, it's not just direct financial contribution, like in terms of finances, it could be indirect. So using that example.
What if, you know, for example, the common law wife did not make financial contributions, but she helped renovate the cottage. So she, you know, stripped the lead paint off the deck. Sweat equity. Sweat equity. That's a really good point. You could also make a claim based upon, you know, your indirect contributions that increase the value of the asset. Obviously, it's easier if you show a paper trail in terms of finances, but you can also do sweat equity. Yeah.
Which is like, that's why it's so complicated because the other side may so easily deny that it was like, you didn't it. And right. Do I just pull my calendar say on this date? I actually went in that that's hard. Right. And the other thing too, is that there's a new, there's a, it's not necessarily a new trend, but it's, it's something that developed during my career and it's something called a joint family venture. And that's essentially a case where the parties decide we're going to start this business together. It's treated like a business, like a separate business. Okay.
And perhaps one person is doing this with the day -to -day operations, but the partner, the common law partner, are doing things like, so I'm gonna use a restaurant example, right? So let's say the common law spouse wife, she operates the day -to -day operations, but the common law husband does the bookkeeping or arranges for the bands to come and perform at the restaurant or, you know,
Phaedra Klodner, Family Law Lawyer (16:25.246)
meets with the wine representatives or whatever it may be, helps work at the restaurant. Does the cash out at the night? Yep. Make sure the waitresses are taken care of or the bartenders taken care of. And even though that she may not be or he may not be the owner, there would still be some sort of, again, sweat equity. Yeah, contribution. Contribution to a joint family venture. Yeah, no, that's a great point. That's a great point.
But again, very complicated, very hard to prove sometimes. Yeah. And very fact, very fact specific. Yeah. And it doesn't necessarily mean that you're going to get 50%. Yeah, it may be a part of it, but it doesn't 25. Yeah. 30. Yeah. Rather than in a marriage, it has to be 50 50 asset a division. Okay. So I'm going to ask a couple more questions, but thank you for that. So just to summarize so far, if you have a child together,
everything applies just like if you were married. That's correct. And that I'm not surprised because that's the benefit is for the child, for the children. So in terms of child support or section seven, extra curriculum, extra expenses, expenses and education. Spouse support. Yeah. So spousal support is if you have a child together in a common law relationship, you can apply for that.
You can ask, but I mean, spousal support is also, it's different than child support, even in a marriage situation, because it's not a stable amount. And it's part of the quote unquote negotiation, really. But if you have children, you can be considered, you'll be considered spouses right away. You don't have to wait the three year period. Right. And that could trigger a review for spousal support. Yeah. But again, very fact specific. Yes. Yes. You still have some groundings and very solid groundings. That's right. Let's say if you don't, if you're a common law, you're in a
relationship, you don't have a child, and then absolutely you don't have any grounding to apply for spousal support? Well, if you're together three years or more, then you're considered to be a spouse. then you can. Got it. But if it's less than three years, then you can't. There are still some cases where someone can apply, but they're very, very rare and very, very difficult.
Phaedra Klodner, Family Law Lawyer (18:48.798)
To prove that you would qualify for that. It would probably have to mean someone where maybe someone got sick and got ill. Some significant change in their circumstances from the date they got married to month 17, let's say, or they separate after 17 months. It would have to be pretty, pretty significant. I can't recall ever doing a case.
myself, but I know there are some case law out there and case law, of course, is judge made law. Mm hmm. A lot of variance there depends a lot of variance. That's what I'm saying. Yeah, go speak with a lawyer. Yeah, yeah, yeah. And she can guide you through that. And I think you always advise and try to avoid court as much as you can. I mean, in some cases, I know you can't but right, try to avoid it because you don't know, right? You're kind of rolling the dice there. So
I want to come back to asset division because that's the complexity. So, property division, let's say in this case, what if their common law, when they got into the relationship, let's say one year, two year, they purchased the property together under both of their names. So will that, when they separate, will both parties have a hundred...
50, it would be 50, 50. Absolutely. So that's a really good point. So when I gave the example, I was assuming that only one person has the asset. Okay. But in the case where it's jointly held, like for example, the family residence, we don't call them matrimonial home because they're not married. We call it a family residence and they hold them on title 50 50. Okay. Then, they have a 50%. Right. As long as your name is on that property and it doesn't matter. And in this case, you don't have to prove how.
How much I pay groceries how much he paid? It's 50 because it's under both of your name because you you've decided to hold title 50 It's kind of like also like a joint bank account. So let's say for example, yes You and I are married. Okay, and we have a joint bank account. We are adding a complexity of same -sex marriage Which I will ask Let's assume that we're married. All right, and there's a joint there's a joint bank account. Yeah, and let's say I
Phaedra Klodner, Family Law Lawyer (21:11.134)
that you're the only person that puts money into the account. Okay. Okay. So you put your paychecks in the account, right? And then you and I separate, right? I'm entitled to 50%. Yeah. Because it's under our joint name, right? Cause you told the world at large that this is a pot of money that I'm going to share together, regardless of who puts the money into it. Okay. Interesting. Since we're on this trend, cause joint bank account is also a Marital or a common law union asset.
So let's say in this case, if we're common law, we have a joint account. I have 50 % right to it. What if John has a separate bank account and Mary has a separate bank account. Would this two separate account consider to the connect? Yeah. So that's a good question. So they have separate accounts, right? The same logic applies is that was I instrumental in the acquisition, preservation, maintenance or improvement?
of the bank account. So for example, I get my income tax refund, and every year I get my income tax refund, I deposit it into your account. So into your own to your account separate separate your separate account, I just I put all the money in right, right. And then you and I separate, I might try make an argument that notwithstanding that that account is stolen your name, I have an interest in it, because I was contributing to the account. It's very complicated. And then the question is,
Why did you contribute to it? You might come back and say, well, you contributed to that account because I was paying the, I was paying for the living expenses at the house. Yeah. Yeah. I was paying groceries. I was. Yeah. And I gave you money into that account because you were responsible for buying the groceries or paying the internet bill. Yeah. I paid that vacation. My God. I paid that vacation when you gave me those, when you gave me that $2 ,000, it was to reimburse my share of the trip to Mexico. Right.
Right. So it can be very complicated. Right. So we were talking about housing. I'm going to come back to I have a question about debt because debt is part of the right collected family. Right. As such. So OK. So we had an example of if you're common law, you both are under the title of the house. You absolutely get 50 percent. No question. Right. So let's say in this case, if I'm entering into a common relationship, yes.
Phaedra Klodner, Family Law Lawyer (23:36.158)
The so one party already had a house was under their name, let's say for a short period of time. So can I request if the other party agree? Because now I'm going to contribute equally. Right. So can I request the other party to add my name?
I mean, you can if they agree to it. Yeah, if they agree to it. But if they don't agree to it, then you're back to the same situation. You have to prove contribution. You have to prove contributions that through my blood, sweat and tears, through my financial contributions. I pay like all the rest. OK. Then the value of the house would not have increased if it were not or the equity increase if it were not for my contributions. Yeah. I had a client which was the same case that the in this case one party.
already had the house actually under his and his parents name. Right. So and then they were together for more than 10 years, I think. And then she was paying into rent first. But then, you know, time goes by, it just became groceries and other things. There wasn't enough proof, so to speak. And so it's difficult because who has their bank records from nine years ago? Yeah. But how much did you pay at Solby's? Yeah, but it's so hard.
breaking for me to see because you know, it's so what they did contribute. Yeah, so one of the things that I have suggested to my clients and actually as recently as yesterday is that and here's the case. Okay. And again, this could be common-law or for married. So you bring in the house into the relationship or marriage. All right. And it has $200 ,000 in equity. Let's just say I just did a case yesterday where the other person
bought into the house. So they paid the person $100 ,000 and then they came on title jointly. That's smart. That's smart. Right? Well, assuming that person has like a hundred thousand dollar cash sitting around, but, but you can. And then that way, that way the spouse who owns the house feels that he or she feels that they've been satisfied. Yeah. Yeah. It's an equal partnership. It's now an equal partnership. Yeah.
Phaedra Klodner, Family Law Lawyer (25:46.782)
I love that. So if that's possible, either in a married situation or common law or race ship, that's how you could address that particular issue. Yeah. Yeah. Or maybe not a hundred percent half of the equity, but whatever you can come into an agreement and add your name. And then maybe you're going to hold title 70 30 or 60 40. Like people are off. People often think that another myth is that either the house has got to be in one person's name totally or 50 50.
Right? Joint. There's no way in between. You can actually hold title jointly, not necessarily 50 -50. 70, 30, 60, 40. I love that. So you can do that too. Okay. Add another complexity. What about capital gains? What about capital gains? Yeah. So let's say in this case, right, let's say common law, like the cottage example you're giving. We're living, we're renting together.
However, let's say somewhere in Ontario, we have a cottage together, where we both bought it, but it's considered an investment property, not our primary residence. Say when they sell it, just using your case, let's say one party didn't actually directly buy that, but I'm claiming, I'm the party who didn't hold title, but I'm claiming using your example, let's say I get 25 % of the equity increase.
the judge says or whatever it says. So let's say, and now he said, okay, I don't have enough money to pay you out. I need to sell the cottage. Right. And now it's going to accrue capital gains. So how is that shared? So in terms of the capital gains issue, I guess if I had a case like that, I probably would negotiate some sort of percentage. Yeah. Because obviously the person owns that property prior to, you know, the marriage, the common law.
relationship and what have you. So you'd have to look, okay, what were the capital gains that accumulate during that time period? And then what were the capital gains accumulated after we were together? Like a time stamp? Yeah. And as everyone knows, there's been recent changes in legislation with respect to capital gains that basically the government's now collecting more money. Surprise. Surprise. They're collecting more money for...
Phaedra Klodner, Family Law Lawyer (28:10.974)
capital gains because the exemption amount has decreased. Reduced, yeah. Yeah. I mean, not surprised that like, we have so much debt, so they gotta pay somehow, find ways to pay somehow. That's right. And, okay, no, I really love that because it just shows how nuanced the matter is, right, when it comes to common law. So, so what about debts? So,
If it's okay, so that's a really interesting question, too. And it's very, very complicated. So you have to prove it, right? You will accrue the debt together. Yeah, right. So and I'll tell you, so if the debt is joined, then of course, it's 50 50, regardless of a married couple. In terms of like, okay, we open a line of credit together, right? We used 10, 10 grand to pay for our trip to Mexico. That's right. We're splitting. Okay. But let's say for example,
Again, you and I are married, but you have really poor credit. You can't, you can't get a credit card. You can't get, then you got a credit card and you give it to me to use. Right. And you say to me, baby, I need a new car. Yeah, I can't, I need a Tesla. I need a Tesla. I can't finance this in on myself. I did a voluntary assignment in bankruptcy three years ago. Okay.
No, I haven't. But I'm just saying, let's say that's the example. You did the voluntary sign on bankruptcy. That's why I need to use your credit to get something. Yes. That's correct. And then, and then we separate. my God. Okay. The only way you're going to address that particular issue is if you actually have some sort of contract between the two of you that in the event of a breakdown in a relationship or marriage, that you're responsible for that.
Because the bank doesn't care. It's under your name. I'm going to come to you. That's right. So it goes back to really simple contract law. It's called privity of contract. So let's say the bank lends me money to buy you a car. It's under my name. Okay. And so what happens is that and you and I, unless you have some sort of contract, whatever side deal you and I have verbally, like, don't worry, baby, I'm gonna, I'm going to pay that bill. And then you don't.
Phaedra Klodner, Family Law Lawyer (30:29.054)
whatever you and I have agreed verbally is not binding against the bank. Okay. And similarly, even if we have a contract together, all right, you can't go to the bank and say, Mr. Bank Manager or Mrs. Bank Manager, you said that, you know, we agreed that I would make the, you would make the payment. And so you really have to make sure that that person would have some other equity to cover that particular.
Yeah, you have to address that. And your legal counsel needs to cover the risks of that person. Yeah. In the separation. So I'll tell you a case that I had and I'll tell you how I ended up dealing with it. And I ended up dealing with it in court. So, this was a common law relationship. The wife made common law wife made a hundred thousand dollars a year. The husband made $40 ,000 per year. All right. And unbeknownst to her.
He had a gambling issue. Okay. And he had access to her credit card and he just kept taking cash advances, cash advances. And she wasn't aware. And she wasn't aware because he would take it from when the mail was dropped off and she'd ask him and he would say, baby, don't worry, I've got to pay. Don't worry, baby, I've got to pay. Don't worry about it. And then in fact, it goes into default and then she gets served. Yeah.
by the bank and court to say, do you know you owe $42 ,600? And so what I did in that case is that I actually made a claim for a lump sum payment of spousal support, even though her income was double his, because I argued successfully that she was economically disadvantaged as a result of the relationship. And the thing with spouse support is that if he was to go bankrupt, spousal support survives the bankruptcy.
Really? Yes. Wow. So a spouse support arrears amount or a child support arrears amount survives bankruptcy. Wow. So you can't you have to pay even if you claim bankruptcy. That's right. Yeah, that makes sense. Because someone can easily just say no, I don't have money. Yeah. So she got her judgment for the amount of the outstanding loan as a spouse or support as a lump sum payment spouse. Does she still have to pay for tax on that amount? Not if it's lump sum.
Phaedra Klodner, Family Law Lawyer (32:54.59)
Right. Cause it's tax neutral. And then she went and went ahead and garnished his wages now. And the most they can garnish with his wages and he, the wages act was 20%. It's going to take a couple of years, but it was one way to do that. So the lesson for everyone that's listening or going to listen to this, or in a common law relationship or a common law or married or what to have you like.
Don't lend your spouse any money. Don't let your spouse use your credit cards. Just don't do it. Without a contract. With some written agreement, but even in a written agreement, there's an example. Yeah, the bank is going to come after you. The bank comes after you. They don't care. Yeah. Right? Yeah. No. Wow. So interesting. What about pension? Let's say if someone is in a common law relationship for 35 years. Okay. Right.
Really interesting question. And you go back to the same and again, in the last year, I've had a case like that, where someone were in this case, it was the common law wife worked for a very large company in town, had to work there for about 20 years, had quite a substantial pension. And the common law spouse husband requested that that pension be shared. Okay, so if they were married, it's
being split 50 -50, okay? And he made that claim and I objected to the claim saying there's no proof that he was instrumental in the acquisition, preservation, maintenance or improvement of the pension because it was the company who was contributing to the pension. That's her work and she worked. And she worked there. It wasn't like she was taking money from joint assets or from the family assets to contribute. No, great point. And so the courts held that...
He had no plan. He can't touch it. He can't touch it. Yeah. But it's in a marriage situation, you have 50%. 50%. Because everything is put together. So what about, no, interesting. I think I know the answer, but what about RRSP and TFSA? Okay. So that's the same thing. But let's say, for example, again, I'm paying for the rent. We're married. I'm paying for the rent on the house of, you know, $2 ,000 a month for one bedroom apartment. And as a result, you have more money.
Phaedra Klodner, Family Law Lawyer (35:15.934)
to contribute to your investments. Okay. my God. You have to prove that way. Then I might argue and say, if I was not paying for the rent, you don't have a thousand dollars to put every month there. You don't have a thousand dollars spent to your RSPs. And therefore essentially you're holding part of those funds in trust for me. Right. And I wouldn't have been paying for the bulk of the expense. I could have contributed to my RSP then. Because I could contribute to my RSP and therefore.
you're holding part of that in trust for me. I get that, but it's so complicated because let's say I contribute, but my company matches my contribution and you can't touch that part because that's your company. That's your work. That's right. That's why it's so complicated. It's very complicated. Right, right, right. But it's interesting, I guess the essence of the story is that you have to prove your contribution. Right. So again, to get rid of the myth, just because you're common law,
doesn't mean that everything gets split 50 -50. You have to show that those funds, that asset, that interest, part of it's being held in trust for you by the spouse. And then it's up to you to prove that, you know, for my direct or indirect contributions, you would not have had.
$28 ,000 in your RSPs or $47 ,000 in your TFSA. That just makes people to decide to get married from their common law relationship because then you're more, I mean, more protected to some degree. And what I can say to you too is that the longer you're together in a common law relationship, the more vulnerable or the higher risk in terms of contributions. And that's why I strongly advise clients to get
cohab agreement so that if things went sideways, you know that this is what it's going to look like. That's my last question. Do you actually recommend people before getting into common law union to get a, I call it pren up that's for marriage, but this is cohabitation agreement. And I think I can only imagine, let's say when you enter into a common law relationship, right? It evolves just like a marriage. You know, you start to have kids, maybe you have two kids, maybe you have...
Phaedra Klodner, Family Law Lawyer (37:37.726)
an investment property. I think it's an agreement that you need also to revisit. You do. Yeah. And again, that's a good point about the children. The more you have a marriage like relationship, for example, you have joint bank accounts together, you have children together, right? Business together. You'll have a business together. Very common. The more likely that there's going to be a trust argument if it's a quote unquote marriage like relationship. However, there are some clients that I have.
where they keep everything separate. You and I are in a common relationship. You have your bank account, I have my bank account. You pay for your car insurance, I pay for my car insurance. We rent a one bedroom condo in town, we split it exactly 50 -50. There's some people who arrange their financial affairs, but for the most part, people intertwine because when you get together with someone, you're not thinking about...
I better get things ready in case I separate from this person. Nobody does. Yeah, nobody does. Most people don't unless they don't unless maybe your family is super wealthy or you've been in for common law. And it all failed and you had to pay it from the experience. Maybe you might. Yeah, my clue into to do that. It's so real because just going through my divorce, I'm just thinking, you know, just how I thought about this pre -nep.
agreement before it's so different like when my when my kids enter into their relationship I would highly recommend they get whatever kind of agreement in place well it's funny you mentioned that because my son actually has a has a new friend and they like each other very much and I've already said to him I said listen yeah if you move in with this girl I'm telling you right now yeah mommy didn't bust her ass to go and for you to go and share stuff so
you will be, you know, there will be a cohabitation agreement. Yeah, yeah. And this is not like I don't love that person or anything. This is just like, yeah, if you know how the law treats this kind of relationship, it's really business, which is sad, but also, yeah. To be quite frank, usually in first time relationships, be it common law or marriage, I typically don't see a contract unless there's a person coming in with a lot of wealth and the family is saying, yeah,
Phaedra Klodner, Family Law Lawyer (39:56.926)
You better sign a contract. Otherwise we're taking you out of the company. Yeah. Yeah. Yeah. Or, or you're not getting this or that. Yeah. You see it more often when it's like a second common law relationship or a second marriage because they want to protect what they've worked so hard. I think for both sides too, right? Like, like if you look at me, like I'm, I'm, I'm, I'm turning 40 and in, in, in actually next week, right? You only look like you're 31.
31. I'm just saying, you know, I'm very aware the next relationship I'm getting into the person that's probably been through, right, a divorce or whatever. They're coming with luggage. Or baggage. Luggage, baggage. And have children involved, right? I think it's for protection for both parties and their children, whatever, to decide. I just think, like my mind about before I was like, pretty enough.
Like you have this like, but now it's like, I think. Well, clients often ask me, well, and people call me PK, right? For short. And they'll say PK. Well, do you have a marriage contract with your husband? And I'm like, no, because when I got into my relationship with my husband, I was 21. I'm going to be 57. We came in with student loans. Yeah. Right. There wasn't anything. And we had a crappy car. So anything that we did accumulate was together.
It was together. Yeah. Right. Yeah. So we have the joint bank account. We have the kids. We have, you know, same phone for me and my ex too. That I mean, it's different. But you entering into another relationship when you're more mature, more established. You've got children. You want to make sure the children are protected. You want to make sure their security and stability. And especially as we age, right. Yeah. When you're in your twenties and you're getting involved in your first relationship, you don't care. You don't really care. Yeah. But you know, when you're getting older,
right? And you start looking at your future, you want to make sure that you've got stability in your life. And so regardless of it's, you know, you're getting married or a cohab because you're just living together, the contract's not necessarily a bad thing. And it's not a lot of money. Yeah, yeah, yeah. Like I'm coming to you if I'm entering to a thousand percent. You know it. But also,
Phaedra Klodner, Family Law Lawyer (42:10.622)
I think just for common law relationship specifically, I think regardless of your age, like at least in Canada, I don't know. I know in Sweden, for example, the common law is like one third of the very high. Maybe they have a different law there, I'm not sure. But especially in Canada, I would say it's always prudent to draft something, even something simple, right? Regardless of the age, I would say, because to some degree, common law relationship is still less protected. Especially if you're bringing a property into the relationship. Yeah, you have like...
asset, some kind of asset. Yeah. Yeah. Or the other person is bringing a significant debt, right? Or something, something like that. Right. Okay. Awesome. So we've covered a lot. So in terms of legal support, is it similar for common law relationship? For example, we have, you can go through a mediator, right? You can go collaborative law or you can make all the way to court. So all the same methods in terms of, you know, starting from mediation.
or going to a counselor or doing arbitration, right? Or court or collaborative family law. Those avenues for resolution are as available to common law couple as they are to a married couple. And there's a real trend towards that too, is that because of COVID, there is a significant backlog.
in the family court cases. It's not going to end anytime soon. It's a very costly process, both emotionally and financially, regardless if it's a married couple or common law couple. And so you think to yourselves, listen, I've worked so hard for the monies that I've earned, my investments or what have you. Let's try alternate.
methods, right? And we call, we refer to that as ADR or alternative dispute resolution. And here's another myth that lawyers do mediate, family law lawyers mediate. Actually, majority of cases are through mediation. It's not on, and cause most people when I talk to clients like, yeah, lawyers, you know, they just want to take, take us to court. That's totally the biggest myth I've seen actually working with Phaedra and a lot of my clients.
Phaedra Klodner, Family Law Lawyer (44:30.622)
lawyer, I know they are trying to help their clients to avoid court at all costs. Cause you can, cause you can imagine that when you go through ADR, alternative to speed resolution, you still have some control over the process. Yeah. Right. The moment you walk into the courtroom, that sense of control is gone, is totally gone because a stranger who knows nothing about your family circumstances is going to make a decision.
that could affect you for a very long period of time and your children and your children. And if you think that, I hope there's going to be no judges listening to this podcast. I'll have to be really famous for them to listen to that. Maybe if you think that, if you think judges have some sort of infinite wisdom when it comes to children. Yeah.
you're sadly mistaken because they will never love the children the way you do. They won't even know what they look like. And yet you're going to say here, justice so -and -so, can you make a decision regarding Johnny and Mary? Right. And so I'm a high proponent of that in terms of getting matters settled because even for lawyers, it's very stressful to go to court. Yeah. I've been doing this for 27 years.
And I still get nervous. Yeah. I still sweat. Yeah. I still sleep the night before, three o 'clock in the morning. What about this? What about that? And so I much prefer that there's some control over the process that the parties can both have input and try to find a solution. That's best for the family. Cause the problem is if you go to court, regardless of common law or married, it's often very much a cookie cutter approach. And also all the evidence, the little...
needy, greedy things you have to prove somehow. Right. Yeah, it's just energy draining and costly and so much stress. Yeah. And that another reason why a pre -nepal or a cohabitation agreement is so important to kind of reduce that kind of disagreement or conflict in the future. Except you can't you cannot do a cohab agreement as it pertains to children. What does that mean?
Phaedra Klodner, Family Law Lawyer (46:43.87)
means the parenting plan. You cannot put in a co -op agreement that says, you know, in the event that we separate, we're going to have shared parenting decision making, because that is assessed at the time of separation in the best interest of the children. So you can't do that. Yeah. Right. So anything to do with the kids, child support, you know, but when it comes to spousal or division of property, trust claims, you can put that with the contract. I think children are.
different matter. And the most important thing when you're ending into contracts, because I'm starting to have a few contracts now that are under review, which I didn't draft is this, you must make sure and I talked to Lisa just before we started the podcast, you must ensure that there's financial disclosure. No, great point. Right? Great point. Regardless if it's common law or married, you have to have financial disclosure.
Yeah, how do you enforce that? Let's say if someone is hiding a hundred thousand in that's difficult unless you hire a friend's account, right? But and that's very, very expensive. But at the very least, there should be a sworn financial statement of like, here's my asset. Here's my debt. I love that. And then if you're not aware of your spouse's assets or debts, at least you can claim that I didn't. It's not included here. That's right. And you should and you should get copies. So if they say that they have one hundred forty thousand in their RSPs with
TD Bank, what's the get the state number, get the statement. Okay, so that's one thing. And the other thing too, is that if you are giving up something in a contract, okay, then there has to be consideration, you have to get something in return. So here will be an example. So there's a contract that's made. And in the discussions about spouse port, again, common-law, long, married doesn't matter. It says that, regardless of what my income is,
All right. And if we separate, my support can never be more than X number of dollars. So regardless, if I make 80 ,000 or 800 ,000, my support will always be this amount if we separate. Okay. And the problem is, is that that's really giving up something. You're basically putting a cap. All right. So the question is, well, what do I get?
Phaedra Klodner, Family Law Lawyer (49:06.558)
in exchange for that cap. What am I getting? What's the consideration? And so it could be something like if we separate and you want the cap, then the house, I'm going to get 80 % of the interest in the house. Rather than 50. Rather than 50. All right. If I, again, if you and I are mayor or we're common law together, OK, and you decide that you're going to I'm going to give you $10 ,000. Well, what do you get in return for it? Well, I'm going to get a car.
There has to be some sort of exchange. So be careful when you talk to some lawyers because again, there's been a real trend in the case law, which is judge -made law, where judges are setting aside contracts and saying that they're not valid because there's no consideration. they basically say it's not valid. It's not valid because they can rule over that contract. That's right. Because there's no consideration. They're saying that... It's not a fair...
It's not an even if they're kind of a fair trade, like they're giving up all this. Basically that the contract they deemed the contract invalid because it's not based on equal fairness and trust. And we're being told, you know, sort of by the, by the judges that really you can't even get a true spousal support release in a co -op agreement or a marriage contract. Yeah. Yeah. Like they're very, they're not.
You have to get something in return. Like if I was a division that you can cover it. Yeah. Right. If I release my, if I release my interest in spouse support, let's say I do that. What am I getting in return for that? So it could be for as long as we're together, I have to put in $10 ,000 a year into your RSPs. Right. if we're, if we're together and then we separate and there's a spouse support release, I have to pay you a hundred thousand dollars.
or whatever it is, there has to be some sort of consideration. The days of like, you know, the spouse support releases, I think those days are gone. Right? Courts are loathe, reluctant to set aside contracts on property. What's gonna happen with the house, what happens with the RSPs, that type of thing. Let alone spousal support. But when it comes to spouse support, and if that release results in quote unquote, unconscionable circumstances. Yeah. Yeah.
Phaedra Klodner, Family Law Lawyer (51:30.654)
It's you're probably not going to get a judge. So they will be looking at your the length of your common law relationship, whether you have children or not, they're going to re -evaluate. Right. So let's say, for example, you and I are in a common law relationship. We entered into a contract that basically says if we separate, you're on your own. I'm on my own. We can't claim spouse support. But during the relationship, you develop Parkinson's disease. Yeah. And so you can't work as a teacher anymore. Yeah. All right. But when we got together,
you were perfectly healthy. I don't think a court is going to uphold the spouse support release if a health issue arose during the marriage or the relationship such that you can't work anymore. That's a great question. So great segue. So what are the steps to enforce my family in a common law relationship? My rights if my common law partner is not collaborating during the separation process. So we have a lot of disagreements even with, you know,
with always lawyers. So again, I would first look at seeing whether or not you could do the ADR process, alternative dispute resolution, mediator, arbitrator, collaborative family law. And if not, you're looking at a court application. Yeah. I think a lot of people, especially in common law, I don't agree that people just should do it themselves because you don't know if your rights are protected or not. I think you should always seek consultation no matter what. Know your rights.
and also know your obligations. So judges have very little, from my experience, they have very little patience. Especially if your paperwork's not in order. Right. So sometimes if you can't afford to have a lawyer like full time, you can ask for something called unbundled services or a limited retainer. Okay. When I started my practice 27 years ago, those were not common terms. They are now very common such that...
you know, you do one thing for that person. So for example, Lisa, you want to commence a court application. I might say, okay, I'm going to charge you a flat rate. I'm going to charge you $1 ,200 to do the application. I'm going to make sure it's searched properly, going to make sure it's filed properly. And then you're going to be on your own for this appearance, that appearance. And then you may just call me in to act as an agent and things are getting a little bit complicated.
Phaedra Klodner, Family Law Lawyer (53:54.302)
but I'm not necessarily on the record, right? Dealing with the day -to -day management. That's, that's a real trend. No, I like that. And that way when you go before court, at least your documents are in order. Yeah. And you know, you are prepared and you have this support if you need it. Right. Yeah. I really like that. So that's a big, that's a, I think a big trend in, amongst my profession, which has developed over time because let's face it, lawyers are very expensive and,
the cost of living is just really high. And so it's really tough time economically for people, right? When you think about groceries, gas and everything. So if you're thinking, so if you're thinking about separation, you should still see a lawyer even for consultation and see whether or not they're prepared to engage in, unbundled services or a limited retainer. That's a great device. And, and, and it applies, depends, right? If your case is a little bit complicated, like mine, and with so many moving pieces.
Yours was a little bit complicated, girl. Just a little. But if it's like you don't have houses or stuff, right? And maybe it's more straightforward, but always, always seek counsel before you get on this path. It's my suggestion. And let's say, for example, you're in a common law relationship, or you get married and you've settled the property issues, but it's the child issues that are not being resolved. That's tough. I don't have infinite like...
I don't have infinite wisdom about what's best for your two kids. I don't know. I've never met them. I've seen pictures of them. They're cute as heck. And you know, you describe them to me and they're smart and meeting all the development milestones, but I don't know them personally. And so I often refer my clients to a parenting coach or a parenting coordinator to work on a parenting plan. Gone are the days where we use the word custody. It's now called parenting decision -making parenting time. And there's some really, really good...
people in town, if you're listening from the KW area, but most centers will have a good parenting coordinator, parenting coach. And then you split that cost as opposed to having two lawyers, letters going back and forth, back and forth. This way, you keep your costs down and you kind of have teeth in the game in the sense that you're participating in that process. Whereas if you deal with lawyers, you're kind of going...
Phaedra Klodner, Family Law Lawyer (56:17.79)
It's your lawyer that's advocating for you. Now you might end up having to go to a lawyer. I think both. But at first instance, try the alternative dispute resolution and go see a parenting coordinator or a parenting coach, regardless if you're married or common law. That's a great suggestion. And when it comes to children, things are just so much. I mean, we think as a division is hard. I mean, parenting time, I think it's the hardest because it's...
Intangible, right? So children's well -being is your family's well -being. It's so much more complicated. I always I always tell clients this when I'm old and gray and I'm already getting old and gray and I look back at my life. Do I remember how much I had in my bank account? Yeah, in 2000. So true. No. But do I remember my youngest son? Not yet four going on the school bus with his backpack.
down to his ankles because he was so little. Do I remember that? That memory will be etched in my mind for the rest of my life, not how much money I had in my TD Bank account. Yeah, thank you for that. Thank you for that. Thank you for that. I think that applies to both common law and marriage, and children cover. That's why no matter what their rights are protected in the eyes of the law in both cases. Yes.
We're going to wrap this up. We talked about agreement, but so let's say if someone is going through or thinking about a common law separation, right? So what are some, let's say one or two top tips you give them? So the first thing is that from my experience, and again, common law or married is often my clients try to use me as a social worker or a counselor or a therapist. Okay. So the problem is, is that,
For me to be an effective advocate, I cannot be your counselor. I'm not trained to be your counselor. I'm not trained to be your therapist. And so I can't focus on that for you. And so sometimes clients think I'm a bit of a cold fish, but I can't take on your emotions because then I won't be a good advocate. So reach out. So for example, many of you may have an employee assistance program through your employer.
Phaedra Klodner, Family Law Lawyer (58:36.35)
that there might be some funding. Sometimes if you are in a family medicine group network, sometimes the doctors are associated with social workers and what have you, and it's covered through OHIP because it's considered to be a mental health issue. There's drop -ins for counseling, but don't...
Or maybe you talk to your sister, your brother, your mother, your father. Use your legal legal time very wisely. Right. And because the law look at facts and facts only. So in my coaching program, this is something I teach my clients is how to work effectively with their legal counsel to save time and money. So you got to go in knowing what you want to get by setting the goal. But also I have a lesson talking about what's your lawyer's role
and what's not their responsibility. One part is like they're not your counselor. So, yeah. So do that. So do that. Okay. The second thing is that when you have your first meeting with your counsel, speak with his or her assistant and ask, what is it exactly that I need to bring to the meeting? What do you need? So for example, if support's an issue, again, married or common law, bring your income tax returns. Yeah. So you have an idea.
If you have the other spouses that can touch your turns, bring those too. So speak with either the lawyer or his or her assistant to say, what documents do I need to bring to the meeting? Okay. And you know what? Make a copy. Yeah. Because otherwise we charge you guys 50 cents a page to make a photocopy. Right? So have a, have a copy, you know, go to like staples or whatever. I think it's like four cents a page or six cents, six cents a page.
get those and then have that ready for your lawyer. That would be very, very helpful. That probably would be my second piece of advice. The third is a lot of lawyers for whatever reason don't do retainer agreements. Think about a retainer agreement so that you know exactly what you're getting for the services. So if it's a limited retainer, what am I getting for limited retainer, right? If it's a full retainer,
Phaedra Klodner, Family Law Lawyer (01:00:55.582)
I want to know how much the lawyer charges. I want to know how much the clerk charges. I want to know if, if I call and leave a message, am I getting billed for that? Right? A lot of lawyers do that. As Lisa knows, I don't do that. How, how's that going to happen? And then how is communication going to work? Right? So Lisa and I, for example, and I did that with most of my clients, it's email. I don't think we spoke too often over the phone. Couple of times. Yeah. It's like time.
We did emails and that way you've got a written record of the conversation or whatever we talked about so that when you talk to your client or you talk to your lawyer the next time, you're like, yeah, we covered this, we covered that, we covered that. Whereas if we have a conversation, we may not exactly remember what we talked about eight weeks ago. Yeah, no. Greater device is that... So I would advise that as well. So if we summarize is that...
Don't use your lawyer as a counselor, right? There is other other venues that your emotional management, which is key during the separation time, whether it's divorce or common law. Second is get organized. Get all of your information as much as possible. Because again, the law look at look at facts, not not what she says and he said or whatever. And last one is that know your legal counselors communication style and how they charge you, including their whole team. Yeah.
And this is not to tooting my own horn, but this is a key factors I cover in my coaching program because your legal counsel is so key in this process. Thank you for that. Okay. One more thing. Sorry. If you meet with your counsel and you decide, you know, it's not a right fit. I just don't get that we're connecting with each other. Then just tell them, thank you for your time. Pay your consultation fee.
and go somewhere else. Interview your legal counsel is another aspect that I talk a lot about is that this is a key relationship you might have like most cases run through like average two years maybe a little longer if you go to court. It's a key relationship you have the right to interview your legal counsel. And finally there's no such thing as a stupid question. Yes. Okay. Asking questions of your counsel at least from my perspective is a sign of intelligence. Yes. By this point in my career,
Phaedra Klodner, Family Law Lawyer (01:03:20.19)
I've pretty much heard it all. Although every once in a while I still go, whoa. Right? When I first started my practice, I was like, whoa, whoa, whoa. Every day. Now it's like, okay. Or most of the time it's like, okay, heard it. What have you? Right? just to make sure again, it's the right fit. It's the right fit. So important. And if that person, you like, you know what, I don't like the communication style. They're talking over me. Yeah.
They don't seem to be listening to me. they don't get back to me like that. Or even acknowledge my communication. Yeah, very important because I see so many of my clients, which is so difficult, right? Their lawyer fires them or they fire their lawyer and they have to restart. Very, very, it's just adding stress to a very stressful situation already. So just be prepared at the very beginning. And this is a great time to find a coach to there are different alternatives, right? Your counselor, like who can.
help you look at the whole picture. Team approach. Yeah, team approach. Like put your team together. So my last point is actually interesting in that going back to the 2021 research, there are actually 1 .1 % in Canada in common law relationship, which makes sense, it's same gender and a very, very even smaller percentage for transgender or non -binary couples.
So I'm just interesting have you in maybe that's another podcast talking about. Yeah, let's do it on another podcast. It's a more it's that they have the same rights or similar just a little bit. Well, maybe the next podcast we'll talk about that. But generally speaking, it's the same. It's the same for the common law, right? Yeah. But I would like to add more nuanced ones. Yeah. Because when I even look at the data, I was like, Whoa, I just can't imagine the intricacy even more. So right in that and with the small percentage, we don't even
cover because it says 98 .5 % are different. But essentially, but essentially in law, it's the same right, same right, same right. I can imagine. Interesting topic. But I have represented clients who are transgender or non binary or, and so wouldn't mind talking more about their treatment of them kind of in the court system.
Phaedra Klodner, Family Law Lawyer (01:05:35.806)
based upon my observations and how to address those type of issues. Okay, thank you so much. I think we covered a lot. Thank you. How can people find you, Phaedra? I'm not taking you on any of new clients No, clients If you need to reach me, my phone number, my work number is 519 -571 -4441. Again, it's Phaedra Klodner P -H -A -E -D -R -A, Klodner K -L -O, Danny R.
519 -571 -4441. I do not have a website because you don't need one. I don't need a website. Overloaded with clients and also we will add the information below. So also, Phaedra what are your specialties, so to speak? I know you cover everything. Yeah. So I think that I'm kind of known in the community as a really good children's lawyer. So in addition to...
representing parents, I also represent children through the attorney general's office. And so I think I add a perspective. So whenever I have a situation where there's a family and children involved, I always have my children's lawyer hat on. I think that's an added quality that I have that a lot of lawyers don't have. So whenever I look at a file, and I meet with a client, I'm always very, very much child focused. So I think that's probably where...
my focus has sort of been. And actually, I'm starting to transition my practice a little bit where I'm actually doing private children's lawyer work. So instead of having to wait and go to the government and go to court and what have you, I'm doing something called VOCRs or Voice the Children's Report and doing it on a private basis for parents. And people can reach out to you? They can reach out for me that too, yeah. That's where I'm kind of transitioning.
as I'm approaching 60. I'm trying to focus on that piece of it. Yeah, I can testify because the first time I think in person meeting, not in person, I think it was COVID during the time. You said something that really touched me and has been continuing encouraging me. You told me like, Lisa, I'm doing this for your children. And that really, really, really, really touched me and still obviously stay with me till this day. So.
Phaedra Klodner, Family Law Lawyer (01:07:58.846)
I'm going to hug you on. Okay. Bye everyone. I hope you get some useful information about common law separation and Phaedra is not taking clients but always reach out and you can also reach out to me as well. And thank you. Have a great day. Take care everyone. Be well. Bye.