Alberta Common-Law Partner Inheriting a $650K Estate in 2026: No Automatic Spousal Rollover, the 12-Month Cohabitation Test, and the Intestacy Gap

The Part Most Common-Law Couples in Alberta Don't Know

Priya and Raj lived together for eight years. Shared a home. Shared a life. Raj assumed she'd inherit everything. He was wrong — on two separate levels, in two separate legal systems.

Level 1 — Provincial law: Alberta's Wills and Succession Act determines who inherits when there's no will. Common-law partners don't automatically qualify unless they meet Alberta's definition of an “adult interdependent partner” (AIP). Even when they do qualify, their share is smaller than a married spouse's.

Level 2 — Federal tax law: The Income Tax Act's spousal rollover on RRSPs, RRIFs, and the principal residence requires CRA's own definition of “common-law partner” — 12 months of continuous cohabitation in a conjugal relationship at the date of death. It's a different test from Alberta's AIP rules, and CRA can challenge it on audit of the terminal return.

These two systems operate independently. You can qualify under one and fail the other. And Priya, with no will, no AIP agreement, and no beneficiary designations, is about to discover what failing both looks like on a $650K estate.

Alberta's Intestacy Rules: The Adult Interdependent Partner Framework

Alberta doesn't use the term “common-law spouse.” The province created its own legal category: the adult interdependent partner (AIP), defined under the Adult Interdependent Relationships Act (AIRA). You qualify as an AIP if you meet any one of three tests:

Priya meets Test 1. Eight years of cohabitation clears the 3-year threshold. She qualifies as Raj's AIP under Alberta law. That means she has some intestacy rights. But “some” is not “everything.”

What Priya actually receives under intestacy

Under the Wills and Succession Act, when the deceased has an AIP and descendants who are not the AIP's children, the intestacy distribution works like this:

Priya gets $400,000 out of $650,000 — roughly 62% of the estate. Raj's two adult children from his prior marriage split $250,000. That's the best case under intestacy. If Priya had not met the 3-year AIP threshold — say they'd only been together 18 months — she'd get $0. The entire estate would go to Raj's children.

And this is before taxes eat into the estate. The RRSP doesn't roll over tax-free under intestacy to an AIP the same way it does with a designated beneficiary. That's where the second legal system — federal tax law — delivers the real blow.

The CRA's 12-Month Cohabitation Test: A Different Definition, A Different Outcome

The Income Tax Act, section 248(1), defines a “common-law partner” as a person who cohabits with the taxpayer in a conjugal relationship and has done so continuously for at least 12 months at the relevant time. For the spousal rollover on death under section 70(6), the relevant time is the date of death.

Three things make this test different from Alberta's AIP definition:

1. 12 months, not 3 years. CRA's test is easier to meet on the time dimension. Priya's 8 years clears it easily — if the cohabitation was continuous and conjugal at death.
2. “Conjugal,” not just “interdependent.” Alberta's AIP test covers non-conjugal relationships (two siblings living together could qualify). CRA's test requires a conjugal — marriage-like — relationship. Priya and Raj are romantic partners, so this is met.
3. Continuous at the date of death. If Priya and Raj had separated for three months in 2025 before reconciling in early 2026, CRA could argue the 12-month clock restarted. A brief separation can break the continuity.

What documentation proves the 12-month test

CRA doesn't require a single magic document. They evaluate the totality of evidence. But some documentation carries more weight than others:

The safest single action an Alberta common-law couple can take is registering an adult interdependent partner agreement. It simultaneously establishes AIP status under provincial law and provides strong evidence for CRA's federal cohabitation test. One document, two legal systems covered.

The $650K Estate: Spousal Rollover Granted vs Denied

Here's where the math becomes painful. Raj's estate has three assets, and each is taxed differently depending on whether Priya qualifies for the spousal rollover.

Scenario A: Spousal rollover granted

Priya meets CRA's 12-month conjugal cohabitation test. She's named as the RRSP beneficiary (or the estate flows through a will that names her). The RRSP rolls to her RRSP tax-free under section 60(l) of the ITA.

Scenario B: Spousal rollover denied

CRA denies the spousal rollover — either because the cohabitation test fails, or because the RRSP has no designated beneficiary and the estate distributes under intestacy to multiple heirs. The full $250K RRSP balance is included in Raj's terminal return as income under section 146(8.8) of the ITA.

The difference between Scenario A and Scenario B: $107,000 in avoidable income tax. That's the cost of not having the spousal rollover on a $250K RRSP. And in Scenario B, if Priya doesn't qualify as an AIP, she receives $0 of the remaining $532,875. It all goes to Raj's children.

For a deeper look at what happens when an Alberta RRSP has no beneficiary at all, see our Alberta RRSP with no beneficiary guide.

Deemed Disposition and the Home: What Happens When the Partner Isn't on Title

Raj owned the Calgary home in his name alone. Priya is not on title. At death, section 70(5) of the ITA triggers a deemed disposition at fair market value on all capital property. For the home, the principal residence exemption (PRE) eliminates the capital gain — the home was Raj's principal residence, and the PRE applies regardless of who inherits.

The tax outcome on the home is the same in both scenarios: $0.

But the ownership outcome is where it gets dangerous. Under intestacy, the home is an estate asset. If the estate must distribute to both Priya (AIP share) and Raj's children, and there isn't enough liquid cash to pay the children's share from other assets, the home may need to be sold.

A will leaving the home to Priya — or putting Priya on title as a joint tenant with right of survivorship — would have avoided this entirely. Joint tenancy means the home passes outside the estate, outside probate, outside the intestacy hierarchy. Raj's children would have no claim on it.

For a detailed walkthrough of how joint tenancy affects deemed disposition and probate, see our joint tenancy and deemed disposition guide.

Three Documents That Close the Inheritance Gap

Everything that went wrong for Priya is fixable with three documents, all of which an Alberta estate lawyer can prepare in a single appointment.

1. A will naming Priya as primary beneficiary

A valid will overrides intestacy entirely. Raj can leave the entire estate to Priya, leave specific assets to his children, or create any distribution he wants. Without a will, the Wills and Succession Act decides — and its formula may not reflect what Raj actually wanted.

Cost: $500–$1,500 for a standard will in Alberta. If Raj has a blended family (which he does), a slightly more complex will with a testamentary trust for the children's share runs $1,500–$3,000.

2. A registered adult interdependent partner agreement

This is Alberta's equivalent of formalizing a common-law relationship. The agreement is filed with Vital Statistics and establishes AIP status immediately — no need to wait for the 3-year cohabitation threshold. It also provides strong evidence for CRA's 12-month conjugal cohabitation test on the terminal return.

Cost: $300–$800 for the agreement and filing. Some couples draft it themselves and have it witnessed, but a lawyer-drafted agreement carries more weight if challenged.

3. Direct beneficiary designations on all registered accounts

This is the single most impactful action. Naming Priya as the direct beneficiary on Raj's RRSP means the RRSP bypasses the estate entirely — it goes directly to Priya, outside the will, outside probate, outside the intestacy formula. And because Priya is a qualifying common-law partner under the ITA, the transfer is a spousal rollover: $0 tax until Priya eventually withdraws from her own RRSP.

Updating a beneficiary designation is free. Your bank or brokerage provides the form. It takes 10 minutes. The $107,000 in tax savings makes this arguably the highest return-on-time financial action any common-law partner in Canada can take.

How CRA Challenges the Cohabitation Test on a Terminal Return

When the executor files Raj's terminal T1 return and claims the spousal rollover on the RRSP, CRA may accept it without question — or they may audit. Scenarios that increase audit risk:

• Different addresses on government ID. If Raj's driver's licence shows one address and Priya's shows another, CRA will ask questions.
• No joint financial accounts. Separate bank accounts, separate credit cards, no shared mortgage — CRA may argue the relationship wasn't conjugal in the cohabitation sense.
• Any period of separation in the last 12 months. Even a 3-month separation followed by reconciliation can break the continuity test.
• Large RRSP balance. The bigger the rollover claim, the more likely CRA scrutinizes it. $250K is large enough to warrant attention.

If CRA reassesses and denies the rollover, the full $250K is added to Raj's terminal return income. The estate owes ~$107,000 in tax plus interest from the original filing date. The executor (often the surviving partner) is personally liable for ensuring the estate's tax obligations are met before distributing assets.

Province-by-Province: How Common-Law Inheritance Rights Differ

Alberta's AIP framework is actually better than most provinces for common-law partners. Ontario and Quebec — Canada's two largest provinces — give common-law partners zero intestacy rights.

If Raj and Priya lived in Ontario instead of Alberta, Priya would receive $0 under intestacy and pay roughly $9,000 in probate fees (that she wouldn't even benefit from, since the estate would go entirely to Raj's children). Alberta's AIP framework provides meaningful protection — but only if the threshold is met and only as a floor, not a ceiling.

For the full provincial probate-fee comparison on larger estates, see our Alberta vs BC probate fees guide.

The Decision Lever That Matters Most

For Alberta common-law couples, the highest-value action is not registering an AIP agreement (though that helps). It's not drafting a will (though that's essential). The single action that produces the largest dollar impact is naming your common-law partner as the direct beneficiary on every registered account — RRSP, RRIF, TFSA, and life insurance.

A beneficiary designation on a $250K RRSP takes 10 minutes and saves $107,000 in income tax. No other estate-planning action in Canada produces a return like that per minute of effort. And it works regardless of whether you have a will, regardless of whether you meet the AIP threshold, and regardless of what CRA thinks about your cohabitation status — because the designation itself, combined with qualifying common-law partner status under the ITA, is all that's needed for the rollover.

Raj didn't fill out the form. Priya is paying for it with $107,000 of her inheritance. That's the gap between “we'll get to it eventually” and “it's done.”

For a broader look at how Canadian common-law partners are treated differently from married spouses on inheritance across all provinces, see our common-law inheritance tax guide.