Property Division in Relationships: Comparing Married and Common Law Spouses

Introduction

The division of property following a separation can be complex and emotionally charged. The process and principles governing this division largely depend on whether the couple is married or in a common-law relationship. This article will shed light on how property division works for both scenarios, based on the Family Law Act, R.S.O. 1990, c. F.3.

Property Division for Married Spouses

For married couples, the Family Law Act outlines a property division scheme based on the Net Family Property (NFP) of each spouse. This includes all the property owned by a spouse on the valuation date, excluding any property identified as excluded and deducting liabilities and debts. Crucially, the matrimonial home is not considered excluded property, nor is it deducted from the NFP if it was owned at the date of marriage. This means that the value of any matrimonial home on the date of separation forms part of the NFP. The actual property is not divided but rather the dollar value of the property.

Property Division for Common Law Spouses

For common-law couples, the division of property is usually based on ownership. Individuals in common-law relationships do not have any claim or interest in the other's property unless it is jointly owned. However, if one party has contributed to the other's property, they could seek compensation for their contributions or an interest in the property based on equitable principles. Cohabiting couples can also assert a property interest in the other's property by basing a claim on constructive trust or resulting trust principles.

Constructive and Resulting Trusts

Constructive and resulting trusts are two types of equitable trusts that a claimant spouse could use to assert their beneficial ownership of a property. Constructive trusts are based on unjust enrichment principles and require a causal link between the unjust enrichment and the property. Resulting trusts, on the other hand, are based on the claimant making direct contributions to the acquisition of the property or transferring the property gratuitously to the titled owner.

Conclusion

Navigating property division following a separation can be daunting, but understanding the basic principles and laws that govern this process can help. While the exact procedures and outcomes may vary depending on the specifics of each case, this guide provides a general overview of how property division works for married and common-law couples. Always remember that it's crucial to consult with a legal professional to understand your rights and obligations in such situations.

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