Common-Law Spouse Inheriting in Ontario 2026: The $1M Tax Gap Compared to Married Spouses (and How to Close It)

Two Definitions of "Spouse" — and Why the Difference Can Cost You $1M

In Canada, there is no single legal definition of "spouse." The Income Tax Act (ITA) and Ontario's Succession Law Reform Act (SLRA) each define the term differently — and the gap between these two definitions is where common-law couples lose money.

The CRA Definition: ITA s.248(1)

For federal tax purposes, a common-law partner is a person who has been living with the taxpayer in a conjugal relationship for at least 12 continuous months, or who is a parent of the taxpayer's child. Once this threshold is met, the common-law partner is treated identically to a married spouse for all purposes under the Income Tax Act — including the spousal rollover under ITA s.70(6), which allows capital property to transfer at the deceased's adjusted cost base with no deemed disposition at death. For a detailed walkthrough of how the spousal rollover works, see our guide to the spousal rollover.

The Ontario Definition: Succession Law Reform Act

Ontario's SLRA defines "spouse" for intestate succession (dying without a will) as a person who is legally married to the deceased. Common-law partners — regardless of whether they have lived together for 1 year or 30 years — are not included in the intestacy distribution. The estate passes to the married spouse, then children, then parents, then siblings. A common-law partner is nowhere in the statutory order.

What Happens When a Common-Law Partner Dies Without a Will in Ontario

The consequences are stark. Under Ontario's intestacy rules (SLRA Part II), the estate of a person who dies without a will is distributed in this order:

1. Legally married spouse — receives the preferential share ($350,000 in Ontario) plus a share of the residue
2. Children — share the residue equally
3. Parents — if no spouse or children
4. Siblings — if no spouse, children, or parents
5. More distant relatives — following statutory next-of-kin rules

A common-law partner does not appear anywhere on this list. If the deceased has no living relatives at all, the estate escheats to the Crown (goes to the Ontario government) — the common-law partner still receives nothing.

The surviving common-law partner may be able to make a dependant's relief claim under Part V of the SLRA if they were financially dependent on the deceased. But this requires a court application, legal fees that typically start at $15,000, and a discretionary outcome — the court may award periodic support payments, but it is not an inheritance right. For more on Ontario estate administration, see our Ontario estate planning checklist.

The $1M Illustrative Gap: Married vs. Common-Law on a $2M Joint Asset Base

Consider two couples, each with a combined asset base of $2M. One is legally married. The other has been common-law for 12 years but never married and has no wills. One partner in each couple dies.

The Asset Base

Scenario A: Legally Married Spouse

Scenario B: Common-Law Partner — No Will, No Beneficiary Designations

Why the Spousal Rollover Cannot Save an Intestate Common-Law Estate

Here is the paradox: the common-law partner in our scenario qualifies for the CRA spousal rollover (they have been cohabiting for 12 years). But the rollover only applies when the surviving spouse or common-law partner actually receives the property. Under ITA s.70(6), the property must "vest indefeasibly" in the surviving spouse or common-law partner within 36 months of death.

When the common-law partner inherits nothing under intestacy — because Ontario's SLRA does not recognize them — there is no transfer to the surviving partner. The rollover has nothing to apply to. The estate pays full deemed disposition tax on every capital asset, and the RRSP collapses into income at marginal rates up to 53.53% in Ontario.

The tax rollover is a federal provision. The inheritance right (or lack of it) is a provincial one. They do not automatically work together — the provincial estate law must deliver the assets to the person the federal tax law is willing to defer tax for. Without a will, this connection breaks. For more on how deemed dispositions work on death, see our deemed disposition guide.

Three Documents Every Common-Law Couple Needs

The $1M gap is entirely preventable. Three documents — all of which can be prepared in a single appointment with an estate lawyer — close the gap between common-law and married couples:

1. A Valid Will Naming the Common-Law Partner

A will overrides Ontario's intestacy rules. If the deceased's will names the common-law partner as sole beneficiary, the partner inherits the estate assets just as a married spouse would. Because the partner qualifies as a common-law partner under the ITA (12+ months of cohabitation), the spousal rollover applies automatically — capital property transfers at the deceased's ACB, and the RRSP can roll to the surviving partner's RRSP or RRIF tax-free.

Cost: $500–$1,500 for a standard will in Ontario. Compare that to the $988,000 gap.

2. A Cohabitation Agreement

A cohabitation agreement is a domestic contract under Ontario's Family Law Act, s.53. It can specify how property is divided if the relationship ends (by separation or death), support obligations, and the rights and obligations of each partner. While a married couple is automatically covered by the equalization provisions of the Family Law Act, common-law partners are not — a cohabitation agreement provides equivalent contractual protections. For more on common-law property rights, see our common-law property rights guide.

3. Updated Beneficiary Designations

Naming the common-law partner as direct beneficiary on RRSPs, RRIFs, TFSAs, life insurance policies, and pension plans ensures those assets bypass the estate entirely. The partner receives them directly — no probate, no intestacy rules, no dependant's relief claim needed. For registered accounts, the CRA recognizes the common-law partner as a spouse for rollover purposes, so the RRSP rolls tax-free and the TFSA transfers without tax consequences.

On the $1.5M estate in our example, proper beneficiary designations on the RRSP ($350,000) and TFSA ($150,000) alone would deliver $500,000 directly to the surviving partner — even without a will — and defer $350,000 of RRSP income that would otherwise be taxed at 53.53%.

Province-by-Province Comparison: Common-Law Spouse Rights Across Canada

Common-law recognition varies dramatically across Canadian provinces. The CRA definition (12 months of cohabitation) is uniform across Canada for federal tax purposes — but provincial estate and family law is entirely different:

Ontario and Quebec stand out as the two largest provinces that provide no automatic inheritance rights for common-law partners. In BC, a common-law partner who has lived with the deceased for 2 years has the same inheritance rights as a married spouse. In Ontario, a 30-year common-law partner gets nothing. For a detailed look at how Quebec's civil code affects common-law estates, see our Quebec common-law estate guide.

Quebec's Civil Union vs. De Facto Union: A Distinct Regime

Quebec deserves special attention because it has two categories of unmarried partnership — and they are treated completely differently:

Civil union (union civile): A formal registration available since 2002. Civil union spouses receive rights nearly identical to married spouses — inheritance under intestacy, division of family patrimony, spousal support obligations, and protection under Quebec's family law. A civil union can be dissolved through a joint notarial declaration or court judgment.

De facto union (union de fait): Simply living together, regardless of duration. De facto spouses in Quebec have no right to inherit under intestacy, no right to family patrimony division, no right to spousal support under provincial law, and no right to the family residence. The 2013 Supreme Court of Canada decision in Quebec v. A upheld the constitutionality of this distinction — the Quebec government can choose not to extend family law protections to de facto spouses.

For CRA purposes, a Quebec de facto spouse who meets the 12-month cohabitation test still qualifies as a common-law partner for federal tax purposes — including the spousal rollover. But without provincial inheritance rights, the same gap that exists in Ontario exists in Quebec: the rollover is available, but the assets may never reach the surviving partner.

Dependant's Relief: The Last Resort (Not a Replacement for a Will)

Ontario's SLRA Part V allows a "dependant" to apply to the court for support from the estate. For common-law partners, the SLRA defines a dependant as a person who cohabited with the deceased for at least 3 continuous years or who is in a relationship of some permanence and has a child with the deceased.

A dependant's relief order is not an inheritance. The court considers:

• The dependant's current assets, income, and needs
• The deceased's obligation to provide support during their lifetime
• The size of the estate and the claims of other beneficiaries
• Any agreements between the parties (e.g., a cohabitation agreement)

The court may order periodic payments, a lump sum, or a transfer of specific property. But the order is discretionary — it depends on need, not entitlement. A common-law partner with substantial independent assets may receive nothing. Legal costs for a contested dependant's relief application typically range from $15,000 to $50,000+, and the process can take 12–24 months. For context on how Ontario's inheritance rules apply more broadly, see our complete inheritance tax guide.

Action Plan: What Common-Law Couples in Ontario Should Do Now

The cost of closing the gap is minimal compared to the cost of leaving it open:

• Draft mirror wills — each partner names the other as primary beneficiary. Cost: $500–$1,500 each for a standard will. Include a residual beneficiary in case both partners die simultaneously.
• Execute a cohabitation agreement — specify property division, support obligations, and what happens to jointly acquired assets. This document is enforceable under the Family Law Act, s.53 and provides the contractual protections that marriage provides automatically.
• Update all beneficiary designations — review RRSP, RRIF, TFSA, life insurance, and pension beneficiary forms. Name the common-law partner directly. For TFSAs, designate them as successor holder (available to common-law partners under the ITA) to allow the TFSA to continue tax-free rather than paying out as a lump sum.
• Review property ownership — ensure the family home is held in joint tenancy with right of survivorship, not tenants in common. Joint tenancy passes the property automatically outside the estate.
• Consider life insurance — a term policy with the partner as named beneficiary provides an immediate, tax-free payout that bypasses the estate, covering living expenses while the estate is administered.