Following the breakdown of a relationship, dividing the assets, property, and debt the parties acquired during the relationship is an important step in the separation process. This can become a source of serious conflict. It is important to note that the rules for property division are different depending on whether the partners are married or in a common-law relationship. Separating couples should not navigate the complexities of property division on their own. Obtaining legal advice from an experienced and knowledgeable family lawyer is crucial, particularly if you have high-valued personal assets, or own a business.
At NULaw in Toronto, we have guided clients through the process of property division for many years. Our goal is to understand your unique situation, and protect your financial future during what can be a challenging emotional time in your life.
Under the Family Law Act, any property and assets acquired by either spouse during the marriage are to be shared equally (with some exceptions). This is known as “equalization”. The purpose of property division laws is to provide each partner with an equal share of the net value of any property jointly acquired from the date of marriage to the date of separation. The date of separation becomes very important to the equalization process. What appears to be a relatively straightforward process can be complicated by several factors. Some properties might be difficult to value, including complicated assets such as international property or a family business. Additionally, inheritances and gifts by a third party to one of the spouses are generally not included in an equalization determination.
The matrimonial or family home is the property where the spouses resided in at the date of separation. The matrimonial home receives special consideration during the division of property process. Both spouses have the right of possession of the matrimonial home, no matter who the owner of that property was going into the marriage or whose name is on title. Additionally, the spouses cannot limit the other spouse’s possession rights to the matrimonial home through a pre-nuptial agreement. Furthermore, the matrimonial home cannot be sold without the express consent of the other spouse, even where that spouse no longer resides in the home.
Common-law couples have different property rights than married couples. Most notably, common-law couples are not covered by the equalization provisions of the Family Law Act, and can only seek equalization in some limited circumstances. However, this does not mean the rights of common-law couples are not protected. If one of the partners contributed to the property by, for instance, working at the other partner’s small business, or if they helped to pay the mortgage, that partner can argue that they should be compensated for any such contributions. In other circumstances, a cohabitation agreement might layout how property is to be divided upon separation.
If you are contemplating a separation, or have already begun the process, contact NULaw in Toronto as soon as possible. Obtain experienced legal guidance and ensure that you receive a fair division of your property and assets. Contact us online or at 416-481-5604 to book a consultation with family lawyer Lex Arbesman.