Property Division Lawyer in Toronto
When a marriage or common-law spouses decide to split up, there are typically many issues that must be settled. While all of these issues have the potential to cause disagreements, property division is often one of the most contentious. Each province and territory has its own laws regarding property division, and while the laws are likely similar, having an Ontario divorce lawyer who is familiar with your specific province or territory is extremely important. In some provinces or territories, it can also make a difference as to whether you are married or are common-law spouses.
In most cases, while common-law partners may have the same right to spousal support as married couples, property division can be more complex. Some provinces allow for equalization for property for couples legally considered common-law, but others do not. As an example, in Quebec, even those common-law couples who have lived together for a significant length of time are not recognized as married couples, therefore, there is no right for equalization of property. Ontario does consider couples who live together as spouses for at least three years—but who are not legally married to each other—to be in a common-law relationship, but when property division is the issue, the rules remain different between married couples and common-law couples.
How Does the Equalization of Family Property Work?
Marriage is seen as an equal partnership under the law, so equal partners who are divorcing must equalize the division of property. Property brought into the marriage by either partner remains theirs, however, if the property increased in value during the marriage, then that increase must be shared with the other spouse. Property acquired during the marriage is divided equally between the spouses. There are some exceptions meaning the split may not be exactly 50/50.
In the case of common-law couples, the law will generally look at any property bought during the relationship as belonging to the person who paid for the property. Because the division of property is uncertain when it comes to common-law partners, many choose to enter a cohabitation agreement prior to entering into a common-law relationship. This agreement will clearly spell out financial and property rights. If it turns out that one partner in a common-law marriage feels he or she has been shortchanged regarding the division of property, a claim for unjust enrichment can be made.
Equalization Payments Among Divorcing Couples
If you were married, depending on the circumstances, you or your spouse may be required to make an equalization payment to the other. Since there are a number of rules and exceptions, it is important that you have an experienced Ontario divorce lawyer who can ensure your rights are protected, and you receive your fair share of the marital property. If a written separation agreement has been entered into by a married couple—or a common-law couple—property rights could be affected by such an agreement. While a married couple will automatically share the value of the property during a divorce or the death of one spouse, this is not the case for common-law couples in Ontario. Below you will find more specific information regarding property division among divorcing couples.
How is the Matrimonial Home Divided?
Under the Ontario Family Law Act, the matrimonial home is any residence or property that one or both spouses have an interest in—a home that is rented, owned, or occupied by both spouses and their family on the day of separation. A matrimonial home can include condos, mobile homes, and even a sailboat if the couple uses it as a home. A vacation home used frequently by a couple could also be considered a matrimonial home in addition to the principal residence. The matrimonial home is treated a bit differently from other properties and assets owned jointly with your spouse. Since the matrimonial home may well be the largest, most valuable asset you own with your spouse, dividing the home can be challenging, to say the least.
You and your spouse both have the right to continue living in the matrimonial home until such time as the home is sold, or a judge orders one spouse to move out. If you and your spouse are legally separated while living in the matrimonial home and one of you moves out during the separation, the spouse remaining in the home is not allowed to change the locks to prevent the other from returning (barring unusual circumstances). The right to equal possession continues while the spouses are legally separated until a separation agreement is reached, or a family court judge grants one spouse the legal entitlement to have exclusive possession of the matrimonial home pending trial.
This legal entitlement granted by the judge will be in force no matter who holds title to the home. The spouse permitted to remain in the house may not legally sell or dispose of any furniture or other belongings until all issues related to the equalization of property are settled. It is worth noting that even if one spouse came into the marriage with the home, it became the matrimonial home when both spouses and children, if any, lived in the home as a family—unless the owner sells the home prior to the divorce. This is different for those in a common-law relationship; in most cases, the matrimonial home belongs to the spouse the home is registered to, absent a cohabitation agreement.
Money (including investments, bank accounts, and cash), pensions, Registered Retirement Savings Plans, real estate, business holdings, disability benefits, insurance policies, vehicles, personal items, jewelry, artwork household items, electronics, antiques, and any other assets owned by a couple must be divided during a divorce but is divided differently depending on classification. Taken collectively, the matrimonial home, furniture and other items in the home, motor vehicles used for family travel, and any money acquired in a pension plan during the marriage are known as the family asset and are to be divided.
Calculating Net Family Property
The value of everything each spouse owns (market value) must be added up, then the value of what they owned prior to the marriage deducted. Next, any debts, such as personal loans, mortgages, and car loans, are deducted. The equalization payment is the payment the spouse with the higher Net Family Property will be required to make to the spouse with the lower Net Family Property and is half of the difference between the two. Under certain circumstances, the court can order one spouse to pay the other more than the calculated equalization payment. This might occur where the amount is extremely unfair to one spouse.
Help with Property Division from Musson Law
Property division during a Toronto divorce can be extremely complex; an experienced lawyer from Musson Law can help you navigate these complexities, ensuring your rights are always protected. Our firm has more than fifteen years negotiating successful settlements, even when challenging dynamics are present. At Musson Law, we work with you to determine the right process to help you resolve your property division issues and move forward with your life. In addition to assistance with property division, we can help you with many different forms of out-of-court resolution, including collaborative law, mediation, and arbitration. We can assist you with net worth protection agreements and asset protection agreements, work to protect your net worth, and help you with family resolutions and co-parenting issues as well. Contact Musson Law today.