Constructive and Resulting Trusts in Family Law
The process of dividing assets can be complex and emotionally charged.
In Ontario, the Family Law Act (FLA) guides this process, with property division based on ownership.
However, there are certain cases where this ownership principle might not suffice, leading to the application of constructive and resulting trust principles.
What are Constructive and Resulting Trusts?
Constructive and resulting trusts are legal concepts that courts use to rectify situations where property ownership might lead to an unjust enrichment of one party. This typically happens when both parties have contributed to the accumulation of wealth, but the property is solely in one spouse's name.
The Case of Kerr v. Baranow
In the case of Kerr v. Baranow, the Supreme Court of Canada introduced the concept of a "joint family venture" as a way of justifying a remedy for unjust enrichment. A joint family venture arises where both parties' contributions have resulted in an accumulation of wealth. The court set out factors to consider in assessing evidence of a joint family venture, including mutual effort, degree of economic integration, actual intent, and priority of the family during the relationship.
How are Remedies Determined?
If unjust enrichment is established, the first remedy to consider is always a monetary award. In some cases, a proprietary award by way of constructive trust may be awarded where a monetary award is inappropriate or insufficient, and the claimant can demonstrate a causal connection between their contributions and the acquisition, preservation, maintenance, or improvement of the property.
Closing Thoughts
Understanding constructive and resulting trusts is crucial in navigating the often complex process of property division upon marriage breakdown. While the FLA provides a robust framework for property division, these principles add an additional layer of complexity. Consulting with a family lawyer can provide valuable guidance tailored to your specific circumstances, helping to ensure all relevant factors are taken into account.
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