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Property Division

If you are contemplating a separation or are currently going through one, naturally you have concerns about your financial stability going forward. At Pace Law, our lawyers will guide you every step of the way through the property division process, and our lawyers will do our best to make it as worry and hassle free as possible.

Unjust Enrichment

This principle is best described as the non-titled spouse giving the titled spouse a benefit that is unfair for the titled spouse to keep. The normal remedy in cases of unjust enrichment is a monetary award as opposed to giving the non-titled spouse an interest in the property in question. A non-titled spouse can be given a proprietary interest as a remedy when a monetary remedy is not appropriate.

MARRIED Vs. UNMARRIED

When married spouses separate and seek to divide their property the process is called “Equalization of Net Family Property”. The property division sections are found in the Family Law Act in Ontario. The first step in the equalization process is to determine each spouse’s Net Family Property.In order to do so, spouses calculate the total value of their respective assets owned on the date of separation and subtract the total value of their respective debt on the date of separation.There are also exclusions and deductions that can be used to reduce a spouse’s Net Family Property.  An example of an exclusion is any inheritance or gift received by one spouse from a third party during the marriage, provided it can be traced up to the date of separation.  Therefore, if the inheritance has been spent and does not exist on the date of separation then it is not excluded.  An example of a deduction is the value of any property owned by a spouse on the date of marriage.  It is important to note that a spouse’s debts on the date of marriage will affect the amount of the date of marriage deduction claimed by the spouse.In most marriage breakdowns, the element of trust between spouses is gone.  Therefore, the spouse claiming an exclusion or deduction must prove it.  The best way to prove it is with documentation such as deeds, bank and investment statements, loan statements etc.The matrimonial home is given special treatment in the Equalization process.  The matrimonial home cannot be excluded or deducted, even it is was a gift and even if it was owned by either spouse on the date of marriage, provided it is still the matrimonial home on the date of separation.When calculating net family property, the value of all types of property/assets and debts is included.  Examples of property/assets include, but are not limited to, land, buildings, bank accounts, businesses, stocks, stock options, RRSPs, pensions, and accounts receivable.  Examples of debts include, but are not limited to, mortgages, lines of credit, loans, and credit cards.Equalization of net family property results in one spouse (the one with the greater net family property) owing the other spouse a debt (equalization payment). It’s important to note that an equalization payment may amount to more or less than half of the other spouse’s total assets.It is also important to note that there is a time limitation on claiming an Equalization of net family property.  A claim must be made within 6 years of the date of separation, within 2 years of a divorce, or within 6 months of the first spouse’s death, whichever occurs first.  If a claim for Equalization is not made within these timelines, you or your spouse can be barred from ever claiming Equalization in future.

Unlike married spouses, unmarried spouses do not have the automatic right to equalization of net family property under the Family Law Act.  The property division sections of the Family Law Act in Ontario are limited to married spouses.  Not all is lost though. Unmarried spouses can rely on the use of common law principles.For example, when you have an unmarried couple that have lived together for some time and one spouse owns property in their name only, the other spouse may be entitled to a share of that property.  The non-titled spouse can make a claim against the titled spouse for Unjust Enrichment and/or a Resulting Trust.

Resulting Trusts

When the non-titled spouse contributes to the acquisition of a property, but their contribution is not reflected in title to the property, the titled spouse may be deemed to hold some portion of the property in trust for the untitled spouse. This type of trust also looks at the intention of the parties and whether there was a common intention that the property be joint, despite how title is registered.

Like most claims in family law, the onus of proving unjust enrichment and/or a resulting trust is on the spouse making the claim.

The real world application of the principles governing equalization of net family property and the common law claims of unjust enrichment and resulting trust can be complex, and are subject to many variables which can have a significant impact on your case. When it comes to property division, it is worth consulting a lawyer.