People are often totally unaware that their hard earned assets will become joint assets after they have lived with someone for a period of time.
When separating from your spouse it’s important to be aware of your property rights so that you don’t miss out. Under the Family Law Act (“FLA”), which came into effect on March 18, 2013, it deals with what will be shared and what will not.
the new property division rules, both spouses are entitled to an equal share of
family property and are equally responsible for family debt, regardless of use
or contribution. So, there is the possibility of carrying your spouse's debt jointly
(depending on your perspective you will say "ouch" or "phew").
This means that if only one spouse racks up a student loan debt during the relationship, both parties will still share the burden of it on the breakdown of the relationship. Or, if only one spouse works during the relationship, both spouses will be entitled to the savings resulting from her wages. In some cases, if the equal division is significantly unfair, the Court may order unequal division.
The good news for those who go into a relationship already owning property is that their pre-owned property is not family property and it will be excluded from the division of assets. However, any increase (that takes place during the relationship) in the value of excluded property is family property. For example, if Megan owns a condo that goes up in value by $20,000 during the period that Mark is her spouse, he will be entitled to half of $20,000, but not to half of the full value of the condo.
Gifts and inheritances to one spouse will not be considered a joint asset. Settlements/awards or insurance payouts from an injury or loss will not have to be shared, unless if the award is to compensate both spouses or is for loss of income.
Property that is derived from any excluded property or which is purchased with the proceeds of an excluded property will also be excluded.
For example, if Mark used his inheritance to purchase a cottage, the cottage would be excluded from family property division. Spouses can even “trace” their excluded property proceeds into family property. If Megan sold her condo and used $50,000 of the proceeds to buy a house with Mark, the $50,000 would be excluded from family property during division even though she invested it in a family property.
At Hemminger Law Group we can help you with your separation and ensure that you get a fair property division agreement.
This article was written by one of our awesome lawyers, Alison Eustace.
Contact Alison Eustace for a consultation.
Return from joint assets