Gavin Howe
In Ontario, Canada, common-law spouses do not have the same property rights as married spouses under the Family Law Act (FLA). The FLA governs the division of family property for married spouses, and common-law spouses are not subject to the same entitlements. While there is no requirement to divide property on separation, common-law spouses may choose to enter into a domestic contract, such as a cohabitation or separation agreement, that sets out their respective rights to property. On the other hand, married couples in Ontario can create a marriage contract to protect their rights in the event of a divorce, including rights related to property. In the context of a matrimonial regime, spouses in Canada have three choices: partnership of acquests, separation of property, and community of property. The community of property regime was the default in Canada until 1970, and it is still in use today, although it does not seem to attract many people due to the semblance of equal rights between spouses and the complexity of the procedures.
| Characteristics | Values |
|---|---|
| Does Ontario have community property law? | Yes, Ontario has community property law, which is governed by Part I of the Family Law Act (FLA). |
| What is community property law? | Community property law, also known as the matrimonial regime, governs the division of property between spouses in the event of a marriage breakdown or divorce. |
| Who does community property law apply to? | Community property law applies to married spouses and common-law spouses. |
| What are the differences in property rights between married and common-law spouses? | Married spouses are subject to the FLA, which provides them with specific entitlements upon marriage dissolution. Common-law spouses do not have the same entitlements as married spouses and are only entitled to the assets they brought into the relationship. |
| Can common-law spouses enter into property agreements? | Yes, common-law spouses can enter into cohabitation or separation agreements that outline their respective rights to property in the event of a relationship breakdown. |
| What properties are included in community property law? | Community property law includes real property (homes, land, cottages), personal property (jewelry, furniture, art), vehicles, investments, pensions, and intangible property such as intellectual property. |
| Are there any exclusions to community property law? | Yes, inheritances, gifts, and properties owned prior to the marriage may be excluded from community property law, as long as they are not traced to the matrimonial home. |
| What happens to joint property if one spouse dies? | If one spouse dies, the surviving spouse usually becomes the sole owner of any jointly owned property, and they may also inherit life insurance money and registered investments if listed as a beneficiary. |
| What is the role of a lawyer in community property law? | Lawyers can assist in drafting and reviewing separation or cohabitation agreements, providing legal advice, and representing clients in court if there is a dispute over property division. |
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What You'll Learn
Common-law couples and property division
In Ontario, Canada, common-law couples are not legally required to split property acquired during their relationship. Each partner in a common-law relationship is entitled only to whatever they brought into the relationship or acquired during it. This means that furniture, household items, and other property belong to the person who bought them.
However, if one common-law partner owns the home, they can sell or mortgage it without the other partner's permission. Additionally, if one partner contributed financially or otherwise to the other partner's property, they may be able to claim a share of that property. For example, if one partner did unpaid work at home to allow the other to do paid work, or worked without pay in a family business, a court may find that the other partner was "unjustly enriched" at their expense.
Common-law couples can also choose to enter into a domestic contract, such as a cohabitation agreement or separation agreement, that sets out their respective rights to property. These agreements can be negotiated and drafted with or without the assistance of lawyers, although it is recommended that each partner has their own lawyer look over the agreement before signing.
It is important to note that, in the case of separation, common-law couples do not have the right to split an increase in the value of the property they brought with them into the relationship. Additionally, unless there is an agreement that states otherwise, each partner is usually responsible for their own debts.
In the event of the death of one common-law partner, the surviving partner does not automatically inherit any of the deceased partner's property unless it was left to them in a valid will. If there is no will, the intestate succession rules give the deceased partner's children and other relatives the right to inherit property, not the surviving partner.
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Marriage contracts and cohabitation agreements
In Ontario, Canada, couples can enter into a marriage contract or a cohabitation agreement, which are treated separately under the Family Law Act, under sections 52 and 53, respectively. However, if the couple in a cohabitation agreement marries each other, the agreement shall be deemed a marriage contract. These contracts/agreements can set out terms for when the relationship ends, such as financial arrangements, sharing of property or business interests, division of pension, allocating responsibility for debt, quantum and duration of spousal support, and possession or sale of the common residence or matrimonial home.
Marriage contracts are legal documents signed by couples before they get married to protect their rights if they split up in the future, including rights related to property. Couples in a common-law relationship can sign a cohabitation agreement, which is a similar document. Both parties must sign the contract/agreement in front of a witness for it to be legal. The witness must also sign the document. Once signed, the couple must follow what it says. Changes to the contract/agreement can be negotiated, but they must be made in writing and signed in front of a witness.
Cohabitation agreements and marriage contracts can be used to limit one's exposure to Ontario's Net Family Property regime, in which spouses share assets acquired during the marriage. Under this regime, spouses can also have equal rights over the matrimonial home. Domestic contracts can be used to limit exposure to these claims, as well as claims for spousal support.
It is beneficial to obtain a lawyer when entering into a cohabitation agreement or marriage contract. A lawyer can help you understand your rights around dividing property. A separation agreement should be looked over by a lawyer before it is signed. It cannot be easily changed later.
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Division of matrimonial homes
In Ontario, Canada, the Family Law Act (FLA) governs the division of property, including the matrimonial home, upon the breakdown of a marriage. The FLA defines a "matrimonial home" as a property that both spouses ordinarily occupy as their family residence at the time of separation. It is important to note that a couple can have more than one matrimonial home, such as a cottage or apartment, as long as it is regularly used by the family.
The matrimonial home is given special treatment under the FLA, and it is treated differently from other assets during the equalization process. Its value is always included in the valuation of assets of the spouse who owns the home or divided between the two spouses if the title is held jointly. This is the case even if only one spouse is the legal owner of the property, and it may legally be considered the matrimonial home as long as it is the family's primary residence at the time of separation.
In the case of divorce, the sale of the matrimonial home is not automatic. One spouse may choose to keep the home by negotiating a purchase of the other spouse's share or offsetting it against other assets. Alternatively, one spouse may transfer their interest in the home to the other as part of the divorce settlement.
It is recommended to consult a lawyer to understand the specific rules and rights regarding the division of matrimonial homes in Ontario, as there may be complexities, especially in cases of high-net-worth families or when properties are located outside of Canada.
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Property division upon marriage dissolution
In Ontario, Canada, marriage is viewed as an economic partnership, and upon marriage dissolution, spouses are entitled to an equal share of the proceeds of the marriage. This means that property acquired during the marriage must be divided equally. This includes the matrimonial home, which is defined as a property that was ordinarily occupied by the person and their spouse as their family residence at the time of separation.
It is important to note that there are exceptions to this. Property that was owned before the marriage is generally not subject to division, however, any increase in value of said property during the marriage is usually divided equally. Additionally, property that was inherited or gifted from someone other than the spouse during the marriage is also excluded from division, as is money received from an insurance company or as a result of a personal injury.
Spouses can also choose to enter into a marriage contract or cohabitation agreement, which can set out terms for the division of property in the event of a marriage dissolution. These agreements can be negotiated and drafted with the assistance of lawyers, and it is recommended that both parties are represented by separate legal counsel.
If there is no agreement in place, and the spouses are unable to agree on the terms of the property division, they may need to go to court and ask a judge to make a decision. In this case, a full financial report of all property, debts, and income must be prepared and sworn to be accurate.
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Family Law Act and common-law spouses
In Ontario, Canada, family law distinguishes between married spouses and common-law partners, as each relationship has its own unique legal rights and obligations, especially upon separation. The Family Law Act (the Act) is a statute passed by the Legislature of Ontario in 1986, regulating the rights of spouses and dependants in regard to property, support, inheritance, prenuptial agreements, separation agreements, and other matters of family law.
The Act applies to common-law partners, although some rights and obligations differ from those of married couples. There is no formalized process to recognize a common-law union; it is simply based on the facts of the relationship. Married spouses have a presumptive right to share in and divide the property growth of the other, with a few narrow exceptions. Common-law couples have no presumptive right of property sharing upon relationship breakdown.
In Ontario, a common-law relationship is typically recognized after cohabiting for at least three years or if the couple has a child together and maintains a relationship of some permanence (generally, one year). Married and common-law couples have relatively similar rights when it comes to making a claim for spousal support. The right to spousal support is governed by the Divorce Act (for married couples) and the Family Law Act (for married and common-law couples).
The Family Law Act defines a "matrimonial home" as: "Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home." It is important to note that a couple can have more than one matrimonial home. Under the law in Ontario, a couple's property is not divided upon separation, but rather, the value of that property, and more specifically, the growth in value of property that spouses share is divided.
Common-law couples do not have the right to split an increase in the value of the property they brought with them to the relationship. If you contributed to property your spouse owns, you may have a right to part of it. Unless your spouse agrees to pay you back, you may have to go to court to get back your contribution. Although there is no requirement to divide property on separation, common-law spouses may choose to enter into a domestic contract such as a cohabitation agreement or separation agreement that sets out their respective rights to property.
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Frequently asked questions
Community property law is a matrimonial regime where each spouse keeps their own property, but they share equally in the community property and the property reserved for the other spouse.
Yes, Ontario, Canada has community property law.
A marriage contract is a legal document signed by couples before they get married to protect their rights if they split up in the future, including rights related to property. Community property law, on the other hand, is a default matrimonial regime where the property of the spouses is divided into private property, common property, and the wife's reserved property.
