FAMILY DIVISION
Property
Division of Property
For Married Couples
The Family Law Act sets out the rules for
dividing property and debt between married couples. There are two ways of
dividing property:
- 50/50 Split – the general principal of the
Family Law Act is that both spouses own all the matrimonial assets
equally. If you and your spouse cannot agree on how to divide the property,
an application can be made to the Court to request a Judge to divide the
assets. The Court will normally split the value of the assets equally
between both parties.
- Unequal Division of Property – you can apply
for an unequal division of property, but you have to prove that an equal
division would be ‘grossly unjust or unfair’.
Couples always have the option of agreeing on how
property will be divided in a marriage contract. The Family Law Act will
not apply to a married couple if they opted out of the Act through a marriage
contract. Couples are advised to seek legal advice with respect to division of
property or signing agreements.
What Matrimonial Property is Divided?
Matrimonial Assets
Matrimonial assets include property obtained by
either spouse during the marriage, such as furniture, bank accounts, work
related benefits (such as pensions, RRSPs) or land used by the family. Note:
this list is not exhaustive.
Not all property is considered matrimonial
assets. The following are usually not considered matrimonial assets:
- Gifts, inheritances, settlements or trusts
(unless used for a family purpose, or used to buy family assets);
- Family heirlooms;
- Personal injury awards (except any portion
that compensates for economic loss);
- Personal possessions;
- Business assets;
- Property that is specifically excluded under
a marriage contract;
- Property acquired after separation (separate
bank accounts, credit cards, etc.)
Matrimonial Home
The matrimonial home is the home and land that
spouses shared together as a family. It could include a house, trailer, mobile
home, and condominium.
Under the Family Law Act, both spouses have an
equal share of the matrimonial home, regardless of whether it was previously
owned by one spouse, how and when it was acquired, or if it was purchased in
only one name. Married spouses own the home as joint tenants, which means they
both have equal ownership rights to the property and on the death of the other
spouse, full ownership of the home.
If a married couple has opted out of the Family
Law Act through a marriage contract, this may not apply.
If one spouse moves out, the person who remains
in the house is not normally allowed to deny the other access. A spouse can
obtain exclusive possession of the family home if:
- He or she has bought out the other’s
interest in the home,
- There is an order from court for exclusive
possession. Either spouse can apply to the court for exclusive possession
upon the breakdown of a marriage, or
- There is a court order which specifically
denies one spouse access to the home for a period of time (such as
stipulated in an emergency protection order, an undertaking, recognizance or
probation order).
For Common Law Couples
The Family Law Act does not provide for the
division of property and debt between common law couples. For common law
relationships, the basic rules are:
- When the couple separates, each person keeps
what belongs to them (it is either registered in their name or the person
bought it).
- Each person is also responsible for their
own debts, so it is a good idea for people to hold onto receipts, invoices,
etc.
- If an asset is in both your names, then
normally you are entitled to half of its value. You will need to decide
amongst yourselves how to deal with this: one will need to buy the other
out, or you will need to sell the asset and divide the proceeds. If there is
no agreement written, and you can’t come to an agreement, a Court may order
that the asset be sold.
If there is a domestic contract, what is in each
party’s name is not necessarily their property. It will depend on the terms of
the agreement.
Remember, a common law couple always has the
option to contract their own terms of separation, and may even contract into the
terms of the Family Law Act so they have some of the same rights as married
couples.
Federal laws have a range of rules for dividing
plans and benefits (such as CPP) between common law couples. You should contact
the appropriate organization to determine your eligibility for benefits.
Common law parties are advised to seek legal
counsel to determine if there is any other basis for entitlement to property.
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