CANADA Law and Practice Contributed by: Ian Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
9. Planning for Non-Traditional Families 9.1 Children While adoption is a matter of provincial jurisdiction, Canadian law recognises that adopted children have the same rights as biological children, and that biolog - ical children do not have priority over adopted siblings regarding child support or entitlement to a share in a deceased parent’s estate on intestacy. When a child is adopted, their legal ties with their biological family are severed and they become a member of the adop - tive family. Adopted children have no rights to inherit from their biological parents, although their biological parents may leave them testamentary bequests. Similarly, children born outside marriage do not have fewer rights than children born to married parents. Canadian law does not meaningfully distinguish between children who are natural, adopted or born Same-sex marriage has been recognised in Canada since July 2005 under the Civil Marriage Act, SC 2005, c 33. Same-sex married spouses are afforded the same rights as heterosexual married spouses regard - ing family and estate law, and tax planning. 9.3 Cohabitation and Unmarried Couples In Canada, the criteria for recognising common-law relationships vary provincially and territorially. Under the Income Tax Act, for example, individuals are gen - erally recognised as common-law spouses after liv - ing together in a conjugal relationship for at least 12 continuous months. Although cohabitation is usually required, courts have recognised that a common-law relationship may exist even where the parties maintain separate residences. inside/outside of marriage. 9.2 Same-Sex Marriage The rights of common-law spouses also vary signifi - cantly across Canada. British Columbia, Alberta, Sas - katchewan, Manitoba and the Northwest Territories permit common-law partners to assert interests in family property, whereas other provinces and territo - ries do not. As a result, common-law couples should consider entering into cohabitation agreements to protect their interests in property acquired during the relationship and ensure that appropriate estate plan -
Protection Act was enacted to ensure that pension plan deficits have priority over most other creditors if an employer goes bankrupt. Old Age Security OAS is available to Canadians who reside in Canada and are aged 65 and over. The OAS benefit is reduced as net income increases. Guaranteed Income Supplement (GIS) The GIS may supplement OAS payments for low- income seniors. The income of the applicant and their spouse will be considered in determining eligibility for GIS. For Canadians without a private pension or assets generating investment income, CPP, OAS and GIS payments may represent the bulk of their retirement income. Recent and Proposed Changes to Assist Older Canadians CPP expansion When the CPP was first established, a higher per - centage of Canadians had defined-benefit pension plans that provided regular, monthly payments follow - ing retirement. As many Canadians no longer have defined-benefit plans, the CPP is being enhanced to increase the annual payout to 33% of pre-retirement income. The portion of income covered by the CPP is also increasing, allowing Canadians with higher income levels to earn greater CPP benefits. To fund the CPP expansion, contributions from employers and taxpayers were increased gradually between 2019 and 2025. The Quebec Pension Plan is available to Canadians who only work in Quebec and is being enhanced in a similar manner. Continued income splitting for seniors Notwithstanding the elimination of most forms of income splitting, post-retirement income splitting remains an option for Canadian families seeking to limit the rate at which their income is taxed. Seniors remain capable of splitting eligible pension income with a spouse. After age 65, withdrawals from regis - tered retirement income funds and life income funds are eligible for income splitting.
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