If you are contemplating separation or divorce, it is important that you seek the advice of a licensed legal practitioner to ensure that you have a sound plan of action to protect the title and value of your individual assets to the extent legally possible.
The ‘Matrimonial Home’ or the Family Residence is, in many cases, the most significant personal asset a married couple may possess. The value of a client’s home is compounded by the presently healthy state of the real estate market here in the Greater Toronto Area.
When a married couple separates, normally each person keeps their own property but they must divide any increase in the value of their property that took place during their time of marriage. This payment is commonly referred to as an “equalization payment”. Please note that presently you must make an equalization claim within six years after you separate and within two years after you get divorced.
When there is a breakdown in marriage and a division of family property – the Matrimonial home is awarded special treatment and is treated different to all other assets in the equalization process by virtue of the Family Law Act.
A matrimonial home’s value is never deducted from a spouse’s total net family property as of the date of marriage; the net result is that a home owning spouse’s net family property is significantly ‘different’ (higher, in this case) than it would be had it been considered a ‘date of marriage asset’.
Section 18(1) of the Family Law Act defines a matrimonial home as “every property in which either spouse has an interest and which is currently, or was at the time of separation, ordinarily occupied by the person and his or her spouse as their family residence.” Notably, this section outlines the possibility of there being multiple matrimonial homes in any given scenario.
Knowledge and correct application of Family Law Act is critical when contemplating and ultimately experiencing a separation and divorce. Seeking the advice of a licensed legal practitioner will allow you to gain the advantage of understanding your legal options and formulate a plan of action as early in the process as possible.
Sanjay R. Patel is an associate at OB Law Chambers and a Barrister, Solicitor and Notary Public practicing in the areas of Family Law, Immigration Law and Criminal Law. The foregoing is intended for information purposes only and you should consult a lawyer if you need legal representation or a formal legal opinion.