Two For One: Bequests To Both The Spouse And The New Partner

It's said that about 40% of Canadian marriages will end in divorce. So does that mean the other 60% remain happily attached until death? Probably not. It is not uncommon for people to separate and choose never to get divorced. In some cases, it's because divorce is too costly. For others, the spouses may decide or be required to live in separate living accommodations (e.g., illness or age). In any case, that leaves a portion of married people who enter the dating scene with "it's complicated" statuses. This article looks at the tax-deferred rollovers for when one of those people die and leave bequests to both their spouse and a new common-law partner.

A spouse, while not defined, is generally considered the person that the taxpayer is married to, whether they are separated or not. A common-law partner is the person with whom the taxpayer has been cohabiting with for at least 12 months while in a conjugal relationship.¹ With those definitions, it is possible for a