Property Claims Back

When couples decide to separate or divorce, property division becomes a big part of the agreement. Property division is governed by divorce laws and can be quite complicated. There are different laws for married couples and common law partners. The first step in determining property claims is for each spouse to calculate the value of their net family property and the equalization payment.  

Net Family Property: Net family property (NFP) is how much money a married partner is worth at the end of the relationship after determining what they brought into the marriage.

To calculate a married partner's NFP:

• Add together all assets minus all debts that a couple had on the day they separated from their partner.
• Subtract all assets minus all debts they had on the date of marriage. Some assets or debts are treated differently in this calculation. For example, some gifts and inheritances are not included.

Equalization Payment: An equalization payment is the money one married partner pays to the other to divide the increase in the value of the couple's property that happened during the marriage. Usually this means that all assets and debts are valued on the day the couple married and on the day they separated, to find the increase in the value during their marriage. The equalization payment is paid after the partners separate. The partner with the larger net family property subtracts the other partner's smaller net family property to find the difference between both net family properties. This difference is then divided in half to get the equalization payment that the first partner pays to the other partner.

Common Law Partners
Under the Family Law Act, a Common Law spouse can only seek spousal support.

If two people have been living together for some time, then sorting out who bought what or who brought what into the home can be complicated; but the general rule of thumb is:

• Items purchased during the relationship belong to the person who paid for them
• Items purchased jointly will usually be divided

A common law spouse cannot ask for equalization payment and neither can they assert a right in the matrimonial home. While a common-law partner is not automatically entitled to equal property division or to share the family home, you can make a claim for a constructive trust to remedy unjust enrichment. In order to show unjust enrichment, you will have to show that:

• You and your partner were engaged in a joint family venture; and
• Your partner is retaining a disproportionate share of the profits of that venture

 If the common law spouse intends to assert a right in the property, it is imperative that the property is owned jointly and both the parties are contributing to the property. If you are in a Common law relationship and wish to separate from your partner, come in and speak to the lawyers and Mehta and Bansal so that we can guide you about the trust law principles and your rights.

Married Spouses
In Ontario, the matrimonial home is treated differently than all other assets under the equalization process. Its value is never deducted from a spouse’s net family property (NFP) as a date of marriage asset, even if that spouse did own the property at the time of marriage. But the home’s value is always included in the valuation date assets of the spouse who owns the home (or divided between the two spouses, if title is held jointly). This has the effect of making the home-owning spouse’s NFP substantially higher than it would be if the home were deducted as a date of marriage asset. Matrimonial home cannot be sold unless both spouses consent to the sale, regardless of the name on the title of the home.  If the matrimonial home is in both names either party can ask the court to order the sale of the home.  There can be more than one matrimonial home and can also include properties like cottages. It is essential to contact a lawyer who has experience and expertise to help couples navigate through the complexities of division of assets. Contact Mehta and Bansal to assist you through the process and ensure that you are getting the best advice possible to help you through the property claims.