Marital property includes all assets that a married couple obtains during the marriage. Family assets refer to possessions belonging to one or both spouses, and they or their children use them while living together. They can use these assets for shelter, transportation, household, educational, recreational, or social purposes.
This blog explores the definition of marital property, the most common types of marital property, and exclusions. Read up to the end of this blog to find the answers to your questions about marital property in Canada.
The Most Common Types of Marital Property in Canada
Are you curious to know Canada’s most common types of marital property? The marital home or homes, household goods, money, personal investments, and cars are Canada’s most common types of marital property.
What Does Marital Property Not Include?
Some exceptions permit one spouse to continue to have the property they own in their possession, which is called excluded property. The most considerable property that does not include marital property is a property that spouses receive through gift or inheritance.
A third party must give the gift or inheritance exclusively to one spouse, except for the matrimonial home. The assets included in the relationship determine whether you have the right to own marital assets. It is advisable to consult a lawyer and explain all your marital assets so they can help determine what you have the right to own legally.
Does the Marital Property Include a Business?
The value of a business that spouses obtain during the marriage, which is still active at separation, must be divided between spouses.
If one of the spouses owned a business before marriage, you keep possession of the business solely. However, you must split any increase in the value of the business during the marriage equally with your partner.
If your business was a gift or an inheritance received during the marriage, you are not obliged to divide it with your partner, unless it is mixed with other marital assets.
What Rights Does Marital Property Give Spouses?
The contribution of both spouses to a marriage is equally important, and each spouse can have an equal share of the marital property without certain exceptional circumstances.
What Property Do Spouses Not Have to Divide?
Spouses do not need to divide property that is not marital. For instance, they do not have to split certain business property, inheritances, gifts, and property they obtain after separation. Only in exceptional cases, you have to divide this property.
Marital Home and Household Goods
The rights of both spouses regarding marital home and household goods include:
- An equivalent right to live in the marital home and benefit from the household goods until the Court announces otherwise
- If the ownership of the home is transferred, the Court may be able to help you regain the ownership of the home or obtain compensation for your share.
- An equivalent share of any money spouses obtain upon selling a marital home.
- If you do not have sufficient shelter, or if it is in the best interests of your child or children, you can request the Court for sole ownership of the marital home and household items.
- In certain circumstances, you can request the court to prevent your spouse from damaging the marital home or household goods.
- If your spouse transfers the ownership of household goods without your agreement, you can request the court for an order that your partner make a payment to you.
- In certain cases, you can ask the Court to prevent your spouse from transferring the possession of household goods without your agreement.
- When your partner dies, you have a right to your share of the marital home, and you can ask the Court to give you both your share and your partner’s share too.
Does Marital Property Encompass Pensions?
Are you entitled to pension if your spouse earns it? If you are married, you have the right to a share of any pension your spouse earns during your marriage, even if you have your pension. Your spouse also has the right to a share of your pension.
However, the division of pensions is not automatic. Your divorce order must declare that the pensions are to be split, and you must apply to each plan separately to request the division.
Is Inheritance Considered Marital Property in Canada?
Based on the Family Law Act, inheritance funds obtained from third parties are usually excluded from marital property, which means they are generally not subject to sharing in case of divorce. Isn’t that a reasonable decision?
Does the Marital Property Include Our Debts?
Spouses are entitled to a share of the marital property and have equal responsibility for a share of the marital debts. Those are debts that you or your spouse borrowed while living together. They may involve financial obligations like mortgages, car loans, credit card bills, and lines of credit.
When you request the Court for your share of the marital property, the Court will also consider the marital debts.
Does the Court Always Split Marital Property Equally?
Although the general rule is for equivalent division of property, the Court can order unequal division where the spouses have determined in writing in a domestic contract to divide unequally or in certain other special cases.
Conclusion
Marital property in Canada includes the assets that spouses obtain during marriage. The general principle is that both spouses have a right to an equal share of the assets they have obtained during marriage.
In addition, prenuptial and postnuptial agreements can play a key role in clarifying property rights and expectations, helping to prevent disputes. A clear understanding of marital property in Canada is crucial for fostering fair and equal results in the event of relationship dissolution.
If you have any questions or need guidance regarding marital property, feel free to book a consultation at zukermanlaw.ca. Our professional team will answer your questions accurately and honestly and provide insightful guidance.
FAQs
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1- How is marital property split in Canada?
The division of marital property may be different by province. In general, most provinces follow the principle of equalization of net family property.
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2- What is the difference between marital property and separate property?
Marital property encompasses assets someone obtains during the marriage, while separate property is assets one spouse owns before the marriage.
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3- What occurs to marital property in the event of divorce?
Marital property is usually split upon divorce based on the applicable provincial laws. This may include an equalization division.
