Property Division for Common Law Couples versus Married Couples
Married couples are subject to what is called an equalization of net family property. This means that each party will have to prepare a financial statement that discloses all of their assets and debts on the date of marriage as well as the date of separation. The party with the greater increase in wealth will divide that differential in half and pay it to their spouse, thereby equalizing the net family property. Essentially, both spouses walk away from the marriage with an equal share in any increase in family property value. There are some exceptions to this, including inheritances that remained segregated and certain rules around the matrimonial home among others. The Ontario Family Law Act is the legislation that governs this equalization process.
Unlike married couples, common-law couples (couples who live together but are not married) are not entitled to equalization of their family property. This means that ownership dictates the division of assets and debts on the breakdown of the relationship, unlike married couples. Each party is only entitled to whatever they brought into the relationship or acquired during it.
There are some claims to be made in the common law couple scenario if you feel that you have contributed extensively to the value of a certain asset that belongs to your partner – a home in which you lived, a pension or investments, for example – and that it is therefore unjust for your partner to retain the full value of the asset. There are certain claims one may make wherein the relief or remedy is often rooted in a trust claim to said property.
There are limitation periods to all financial claims to be made in the breakdown of a relationship, whether it be a marriage or common law relationship. If these limitation periods expire before a claim is made, you may be without recourse.
If you have any questions or need assistance with financial claims to be made as a result of a breakdown in a relationship, we are happy to assist you.
