When a marriage or common law spouses split up, there are a lot of big issues to settle: who will live where, arrangements to be made about children, how the financials will work, etc.
One of the biggest issues usually facing couples who are going their separate ways is how property is divided.
It’s the individual provinces and territories that deal with property divisions between spouses and each province and territory has their own laws regarding equalization of family or marital property. While these laws can be similar to each other, they are usually not the same and a person looking for information about equalization of property should look to the family law act of their province or territory or consult a lawyer.
Marriage v. common law property division
For some provinces/territories it makes a difference whether a couple is married on common law when it comes to property division.
While in most provinces and territories common law partners have the right to financial support after the break-up, when it comes to the division of property it’s not so simple.
While some provinces allow for equalization for property for couples that are legally considered common law, most do not. For example, when Nunavut common law spouses have lived together for at least two years, they qualify for equalization of property, just like married couples.
In Quebec, common law spouses are not recognized as married couples under the law, even if they have lived together for a long time. Accordingly, there is no right for equalization of property.
Property division for married couples
As marriage is seen as an equal partnership under the law, when it comes to divorce, the fairest way to deal with property of people who used to be equal partners is through equalization of family property.
Generally, the division works this way:
The value of any property that you acquired during your marriage and that you still have when you separate must be divided equally between spouses. Property that was brought into your marriage is yours to keep but any increases in the value of this property during the duration of marriage must be shared.
Keep in mind that family law judges also have discretion in how they divide property. That means even if a couple was married, they are not necessarily going to get a 50/50 equalization.
As has already been discussed, some provinces/territories recognize common law coupled as married – as long as they have fulfilled all the provincial/territorial requirements to be seen as a valid common law couple and therefore they will be able to apply equalization of property. Currently most provinces do not recognize common law couples when it comes to the equalization of property.
Property division for common law couples
Where there is no equalization of property for common law couples, the law usually looks at the situation as property that was bought during the relationship belongs to the person who paid for it.
The way common law couples can ensure they’ll have equalization of property rights is if they contract for it. For example, some couples enter co-habitation agreements before they enter into a common law relationship that spells out financial and property rights.
If a common law couple has split up in a province or territory that doesn’t allow for equalization of property for common law couples and there was no contract or agreement made for property, then the person who feels they were short-changed can make a claim for unjust enrichment.
If you are going through a separation or divorce and are dealing with property issues, you should contact a family lawyer.
Property division in a divorce in Canada
Property Division for Married and Unmarried Couples Alberta