The Essential Guide on the Difference Between Property Rights For Married and Common-Law Spouses in Ontario!
It’s fact that there are important differences between property rights for married spouses and common-law spouses.
Hi, my name is Thomas O’Malley. I’m an experienced family lawyer in Durham Region and the GTA.
Common-law spouses own what is in their legal name or what they can prove that they purchased with their own funds.
If you live in a common-law relationship with your spouse, you would own your car and home if you are the registered owner of the car and the home is registered in your name alone as the legal owner of the property.
If you and your common-law spouse separate, each spouse is entitled to what is in their legal name alone.
There is an important exception to this situation. If your spouse is not on title to your home and they have made significant financial contributions to your home and other improvements to maintain or increase the value of your home, your spouse could make what is called a constructive claim for their contributions to the property.
You can avoid this problem by making sure you get a cohabitation agreement that specifically sets out what happens to the property if you and your common-law spouse separate. If your spouse makes no financial contributions to your home, you would set out that they have no claim against your property.
If your common-law spouse has made regular monthly payments towards the mortgage, such paying half of the mortgage, you could set out a formula for how much your spouse would receive if your common-law relationship ends.
In contrast, when you are married, the spouse with the higher net worth on the date of separation must pay the difference between their net worth and the net worth of the other spouse.
You must do a detailed calculation of the value of the assets you owned on the date of marriage and the amount of your debts on the date of marriage so that you determine your net worth on the date of marriage.
You must also do the same detailed calculation on the value of the assets you owned on your date of separation and the amount of your debts on the date of separation so that you can determine your net worth on the date of separation.
You get to deduct your net worth on the date of marriage from your net worth on the date of separation to get your final net worth value.
For example, if John has a final net worth of $200,000 and Natalie has a final net worth of $100,000, then John would have to make a payment of $50,000 to Natalie to equalize their net worth.
Remember the formula: whoever has a lower net worth is entitled to half of the difference between the net worth values of the parties. In this example, the difference between the net worth of John and Natalie is $100,000 (that is, $200,000 (John’s net worth) – $100,000 (Natalie’s net worth) = $100,000).
Then you divide $100,00 by 2 for a final result of $50,000 so that John must pay $50,000 to Natalie to equalize their net worth. John’s net worth now becomes $150,000 when you subtract the $50,000 payment and Natalie’s net worth becomes $150,000 when you add the payment of $50,000 to her so that both spouses now have the same net worth.
You can see how the issue of property rights and property division gets complicated very quickly. You definitely need to hire an experienced family lawyer to help you protect your property rights when you get separated or divorced.
Discuss these important issues in your separation or divorce with your family lawyer.
If you have any questions about your separation, divorce or family law case and you would like our help, there’s a few ways to contact our office.
You can leave a message on my Facebook law office page, visit my website at www.canadiandivorcelegaladvice.com, or call me directly at 905-434-8837.
We would be happy to speak to you.
Oh, by the way, did you know you can protect your family law rights and get essential information on settling your family law issues with your former spouse with the daily indispensable family law advice and tips at my FREE Facebook group?
Click here to find out more: Durham Region Separation and Divorce Legal Support Group
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