separation Property

Marriage and Common-Law: What Happens to Property in the Event of a Separation

Posted admin on 29 October, 2019 0

A marriage is a much-celebrated event; however, separations and divorces do happen. Statistics say that almost four in 10 marriages will end in divorce. The legal implications regarding property and other shared items are many and diverse. These are made even more complicated when couples have acquired properties with parents’ help or moved back into their childhood home. Even if marriage rates are declining, common-law relationships are on the rise and asset division remains an much-questioned issue.

If a married or common-law couple have moved into the parental home but are not on the title, neither has any right to the property and both can be asked to leave at any time. However, when one of the spouses in a couple already has ownership of a house, the law that applies to that house in event of separation or divorce is different for married and common-law couples.

In general, common-law couples have no right to any part of assets that are in the partner’s name, even if the partner not on the title makes monthly payments meant to cover mortgage or house-related expenses. There are exceptions when the non-titled spouse makes significant contributions towards the house. In this case, it might be possible for the non-titled partner to get some financial restitution corresponding to the value added by their contribution toward the property, although it might not be a simple matter. It is always recommended to enter into a cohabitation agreement making intentions and rights towards a property clear.

On the other hand, married couples are entitled to equal division of all assets that were accumulated during the marriage. The spouses keep the value of any assets prior to the marriage but share the growth in value of these assets, along with new assets accumulated, during the marriage. If a spouse owned the matrimonial home before the marriage and the couple resides in that same home at the time of separation, then the entire value of the home gets divided equally and the spouse who owned it before the marriage cannot claim the pre-marriage value. This rule also applies if the matrimonial home, or money towards it is provided as a gift from parents.

If a family gift is received during the marriage and is left in a separate bank account, then it does not have to be shared with the other spouse. But if the money is used to pay down the mortgage of the matrimonial home, then the excluded nature of the gift will be lost.

The family needs to understand this law and if they wish to keep the gift exclusive for their child, in case of a separation, then they can ask their child and their spouse to sign a marriage agreement before the gift is made.

These areas of the law are complicated, and its advisable to consult a family law lawyer.

 

Read: How to Update Your Home Without Breaking the Bank

 

At Toronto Condo Only, we are passionate about new land developments and since 2007, we have helped clients get the best deals and the properties. Monty Malhi has and continues to build formidable relationships with reputable developers and major industry players to give clients first access to the most desirable and sought after projects in and around the GTA. First access to securing units at most projects can amount to considerable price savings of over $20,000 – $50,000. Clients trust our industry knowledge of the real estate investment market throughout Greater Toronto, which is the foundation of our success to buy low and sell high. With our broad vision and innate ability to understand real estate properties, including pre-construction low-rise and high-rise condos, resale homes and commercial properties, we have achieved continued success for our clients and ourselves.

Leave a Reply

Your email address will not be published. Required fields are marked *