Upon the separation of two spouses, one of the most daunting tasks is the division of property. The marital property is set out in Family Law Act. Only married or formally married spouses are protected under Part I and Part II (marital home) of the FLA. There are different considerations for common-law spouses and will be discussed below.
If both parties were previously married and now legally separated, under the FLA, the net family property of each spouse must be calculated. The formula used to determine a spouse’s net family property is the net worth from the date of marriage to the date of the spouse’s separation (referred to as the valuation day or V-day). Then the difference is calculated between spouses’ net family property. This is referred to as the equalization payment.
All property is included in the calculation of the net family property (NFP). This means assets such as the marital home, car, joint bank accounts, trusts, pensions, RRSP, cottages etc., are included in calculating the individual’s spouse’s NFP. There is a three-step process in determining what is included in a spouse’s NFP. The following are the requirements needed for this determination:
- The property must meet the definition of property under s. 4(1) of the Family Law Act;
- For each item, the value must be assigned to the property for both the marriage date and the valuation date;
- The ownership of the property must be ascertained.
There are some critical exceptions to what is included in the calculation of net family property, which is why it is advisable to seek the help of an experienced family law lawyer for this calculation.
There are special rules around the marital or matrimonial home division and classification, and this is governed by Part II of the Family Law Act. Each spouse has an equal right to the home whether or not only one spouse has the sole title. Furthermore, the marital home cannot be sold or encumbered without the other party’s written consent. One of the benefits of talking to a lawyer upon the dissolution of marriage is to endure that your privileges are protected concerning your equalization claim and your right to the marital home.
Regarding common-law spouses, the Family Law Act defined individuals who cohabit as parties who live together in a conjugal relationship, which includes same-sex couples in Ontario. The significant difference between married and common-law spouses is that, unlike married spouses, common-law spouses have no statutory protection. Therefore, if you are a common-law spouse, your claims are restricted to resulting and constructive trusts. Thus the following trust principle must apply:
- Enrichment of the defendant;
- Deprivation suffered by the plaintiff; and
- The absence of a juristic reason for the enrichment
Simply what this means is that there must be evidence of unjust enrichment in order to claim a right to property under trust successfully. Trust claims can become very complicated, and there are set rules and precedents determined by the courts. Therefore, if you think you have a potential claim, it is essential you speak to a lawyer to ensure that your claim and rights are protected.
In addition to claiming a resulting or constructive trust, a common-law spouse could divide the assets of a property if both common-law spouses have joint ownership of a home. Then, one spouse can bring a partition to sell under the Partition Act. Common-law spouses need to bring a claim under the Partition Act because they do not have de facto property rights guaranteed by the Family Law Act like married couples, and this is one of the few ways to gain their share of the asset. If there is no joint ownership, then you would need to consider a different method.
Why Choose Us?
At Bickhram Litigation, we understand that the breakdown of a relationship can be stressful. On top of that, determining your rights during the property division process can be tense and time-consuming. Our lawyers have a great deal of experience helping clients organize their property while ensuring your rights to your shared assets are protected. We provide sound legal advice and the support you need to make this challenging time a little less strenuous for all our clients. For more information on the property division proceedings and litigation, please contact us for a complimentary consultation.
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