Property Issues
When marital breakdown occurs, many issues need to be resolved. Division of the couples’ property is one of them. These possessions or “property” include anything that us capable of being owned. This includes items such as the home the couple shared, its contents, real estate, pensions from employment, RRSPs, investments, bank accounts and cash.
It is important to note that common law couples do not have the same rights as married couples to share the property they bought when they were living together.
Usually, a couple who is separating may come to an agreement about how to divide the property and debts fairly. The terms of this arrangement may be included in their separation agreement. If the spouses cannot agree on some matters they can apply to the courts to have a judge decide on the issues.
Property is divided equally at the end of a marriage. If one spouse has made most of the financial contributions to the relationship, the court recognizes the non-financial contributions of the other spouse (such as child care and house work). Each spouse must calculate the value and the items which make up their portion of the net family property. This is the value of the property each spouse owned at the end of the marriage minus any debts and minus the value of the property each brought into the marriage. Certain other pieces of the property are not considered, like gifts that belong just to one spouse, or items that the two people have agreed will not be considered in the total.1 The net property of the spouses is compared, and one with a larger amount pays half of the value the difference to the other.
For this calculation, all that really matters is the dates on which the marriage begins and ends. The Family Law Act states that the time to determine the value of the property in question is referred to as the ‘Valuation Date’. If one spouse dies, then the date of death is the valuation date. Otherwise, the date of separation is used as the valuation date.
Common law couples do not have the same rights as married couples when it comes to the division of property obtained while co-habiting. Usually, furniture and other household items are considered the property of those who purchased them. Common law couples do not have the right to divide between them the increase in value of the property they each brought into the relationship. Furthermore, if one partner has contributed to property that the other party owns, he or she may have a right to part of it, but unless the property owner agrees to pay back the invested share, the contribution and subsequent entitlement will have to proven in court.
1This is a very basic version, and there are a few rules and exception to this formula.
