Property Overview
What is Property?
Married spouses in Ontario, and all spouses in BC, must share their property with each other when they separate. “Property” means nearly everything that either spouse owns, including houses, cars, RRSPs, other investments, pension plan entitlements, money owed to a spouse by a third party, and lots of other things. Often people use the word “assets” instead of “property”. They mean the same thing.
In Ontario, only married spouses have an automatic right to receive part of their spouse’s property when they separate.
If you are married, (in very general terms) the Ontario Family Law Act says that you must share equally with your spouse all the property you acquired during your marriage, with a few exceptions. The same goes for your spouse: half of what’s his (or hers), is yours.
As I said, there are some exceptions to this:
First, you don’t have to share the value of property you owned before you were married (unless your spouse also owned it before you got married).
That doesn’t mean if you owned something before you married your spouse, you get to keep all of it if you separate, though. You only get to keep the value your property had when you got married. For example, if you had an RRSP worth $30,000 when you married your spouse, and it was worth $80,000 when you separated 5 years later, you would get to keep the first $30,000 (because you already owned that). You would have to share the extra $50,000 that you earned or contributed during the marriage.
You also get to keep the equity in property you had before you got married–even if you lived together for many years before you actually got married. (So you get to exclude the value of property that you owned while you were “just living together” before you got married.)
Second, you don’t have to share inheritances, gifts, personal injury awards, or life insurance proceeds with your spouse. These things are called “excluded property”. Other things may qualify as excluded property too–you should talk to a lawyer if you have any questions.
Unfortunately (or fortunately, depending on which spouse you are), there is a huge exception to these exceptions: in Ontario, the matrimonial home is never excluded property and you have to share with your spouse its entire value if you separate, even if you already owned substantial equity in it at the date of your marriage.
That means if you own a $1,000,000 home with no mortgage on it, then get married and separate, you must share equally the entire $1,000,000 value of your matrimonial home with your spouse. (There may be ways around this though. Talk to a lawyer if you have questions.)
If you’re not married but are living with someone in a common law relationship in Ontario, there is no legislation that says your spouse has to share any of his or her property with you if you separate.
That’s not the end of the story though.
If you’re not married but are living in a common law relationship in Ontario, and if you make contributions to your spouse’s property during your relationship, you may be able ask a judge to give you some portion of that property if you separate. This kind of claim is called a “trust” claim, because it requires you to convince a judge that your spouse holds his or her property “in trust” for you.
To succeed in making a trust claim, you have to prove that your spouse was unjustly enriched by something you contributed. Typically you need to show you contributed labour or something else of value that made something your spouse owns worth more by the time the relationship ended.
If you’re not married, but have been in a common law relationship in Ontario, and have substantially contributed to your spouse’s property (or if you think your spouse might have such a claim against you), you should talk to a family law lawyer about your rights and options.
In BC, both married and unmarried spouses must divide their property when they separate. Just like in Ontario, you start by assuming that you will split all your and your spouse’s property 50/50.
The things that qualify as excluded property in Ontario also qualify as excluded property under the Family Law Act in BC.
Also, just like in Ontario, you get to keep the value of property you owned before your relationship started. If you own a house worth $1,900,000 with a $700,000 mortgage, you get to keep that equity ($1,900,000 – $700,000 = $1,200,000 equity) if you separate.
There are two significant differences about property division in BC compared to Ontario though:
First, in BC there is no special exception for the “matrimonial home”. This is an enormous difference because, for most couples, their home is their major asset. In BC, your matrimonial home is just an asset like all your other property and you don’t have to share the equity you already owned in it before your relationship started, just because you got married (or entered into a common law relationship).
Second, in BC you only get to exclude the value of property that you owned before the relationship started, not everything you owned right up to the day you got married. So if you live with your spouse for 10 years, then get married, then separate, you will need to share everything you acquired even during the 10 year pre-marriage period.
In BC, trust claims are generally not necessary in family law anymore because the BC Legislature had the good sense to pass the new Family Law Act, granting automatic property division rights to common law spouses in BC. There may be some rare situations though where you might still have a trust claim against your spouse, even in BC. Again, talk to a family law lawyer if you have questions.
If the information on this site doesn't answer your question, you can book a free, no obligation consultation in Toronto about your divorce and family law rights in Ontario and BC.