Married and Common Law - Property Issues
May 2011-When you get married, the law treats your marriage as an equal-economic partnership. If your marriage ends, the value of the property you acquired while you were married, and the increase in the value of property you brought into your marriage, will be divided in half: one-half for you and one-half for your partner. There are exceptions to this rule.
The law also provides that you and your husband or wife have an equal right to stay in the family home. If you separate, you will have to decide who will continue to live there. In addition, Ontario's family laws provide that you may be entitled to financial support for yourself and your children when your marriage ends.
Couples who feel that the law does not suit the kind of relationship they have can make other arrangements in a marriage contract or a "pre-nup" as it is commonly called.
Marriage contracts are very important legal documents. You should think carefully about your decision. Speak to a lawyer and exchange financial information before signing a marriage contract.
In a marriage contract you can say what you expect from each other during your marriage. You can list property that you are bringing into the marriage, say how much it is worth, and who owns it. You can say exactly how you will divide your property if your marriage ends. You do not have to divide your property equally. You can describe how support payments will be made if your marriage ends. You can also make plans for the education and religious upbringing of your children, even if they are not yet born.
There are some things you cannot put in your marriage contract. You cannot make promises about custody and access arrangements for your children if your marriage breaks down. You cannot change the law that says each spouse has an equal right to live in their home. If you are already married, it is not too late to prepare a marriage contract. You can sign a marriage contract after you are married. Remember that it must be in writing and signed by you and your spouse in front of a witness who must also sign the contract.
If you write your contract yourselves, each of you should have your own lawyer look it over before you sign it. Having a lawyer look at the agreement will save headaches down the road if the agreement is ever challenged in court.
One important consideration is that property that you bring into the marriage, even though it is yours outright, still has to be considered on separation. For example, if you brought a china set that you inherited from your grandmother into the marriage, and then separate, you can keep the china. But if the china has increased in value when your marriage ends, you and your spouse will share the increase in value. If you have a marriage contract, it could say that the china is your property and that any increase in the value of the china during your marriage will not be shared with your spouse if your marriage ends. This could apply to all property brought into the marriage.
Common law couples do not have the same rights as married couples to share the property they bought when they were living together. Usually, furniture, household belongings and other property belong to the person who bought them. Common law couples also do not have the right to divide between them the increase in value of the property they brought with them to the relationship.
If you have contributed to property your spouse owns, you may have a right to part of it. Unless your spouse agrees to pay you back through negotiation, mediation, collaborative law or arbitration, you may have to go to court to get back your contribution. You should consult with a lawyer in such a situation.
Instead of a marriage contract, common law couples can prepare a cohabitation agreement which can spell out what you both want your financial and family arrangements to be. It can say who owns the things you buy while you are living together. It can say how much support will be paid if the relationship ends and how your property will be divided. It can say who has to move out of the home if the relationship ends.
Like a marriage contract, the cohabitation agreement cannot say who will have custody of, or access to, your children if your relationship ends. You cannot decide this before the relationship is over.
Both of you must sign a cohabitation agreement in front of a witness for it to be legal. The witness must also sign the agreement. Once you have signed a cohabitation agreement, you must follow what it says. If one of you decides you don't like the agreement, you can negotiate a change to the agreement. Any change must also be in writing and signed in front of a witness. If you cannot agree, and you have now separated, you have to go to court and ask a judge to decide the issues between you.
You should each speak to a different lawyer and exchange financial information before signing a cohabitation agreement.