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End of Relationship: Financial Implications

Couples who enter into a relationship do so in the hope that it will be for life. A variety of factors could lead to a change in their feelings towards each other and ultimately, the end of the relationship/marriage.

One of the most sticky issues is the division of property and assets and sharing of liability and debt. The higher the amount of assets, the more complex is the equitable division. If the couple were also business partners, there could be many more complications.

Property Division in Divorce/Separation

“Property” includes money, assets, pensions, interest in property and disability benefits. The matrimonial home where the couple lived together prior to separation will also be subject to division.

The Family Law Act under which divorce is granted in Canada calls for the equal treatment of spouses. Marriage is seen as a debtor/creditor relationship or a form of equal partnership, where each spouse contributes to and is responsible for aspects like child-care, household maintenance, income-generation etc.

Live-in/common-law relationships do not fall under the purview of divorce. Hence, in such relationships, there is no automatic right. The couple has to undertake division of property between themselves by mutual agreement.

Married/Unmarried Couples: Rights and Responsibilities

There is no automatic right to equal division for unmarried couples, but if a partner has contributed significantly to increase in wealth, they can make a claim. The married spouse with higher-valued property has to ensure Equalization by paying half the difference of both property values to the other.

The person whose name is on the title-deed owns the matrimonial home in the case of unmarried couples and the other has no automatic right to it. In the case of married couples, regardless of who owns the property-title, division is equal and both have rights to live there.

Debts/liabilities are the individual responsibility of each when unmarried/married couples separate, unless they’re joint debts.

Canada Pension Plan benefits that each earned are divided equally for the time that they were living together/married.

Both unmarried/married parents must support dependent children under 18 or those above 18 enrolled in a full-time education program or who cannot support themselves due to disability.

Spouses are obliged to support each other after separation, regardless of being married/unmarried based on need and ability.

Under Ontario laws, when married couples separate, they are entitled to “Equalization” of net family property. If the couple chooses to settle matters between themselves, the court need not undertake this task.

When couples cannot agree on these issues, courts make decisions based on:

  • length of relationship
  • complete disclosure of individual property
  • recognition of property owned before marriage/live-in, debts, inheritances and gifts
  • earning/potential earnings of each
  • age and health
  • spousal support for other’s career
  • time and effort put into child-care
  • whether spousal responsibilities affected income-generation
  • property in spouse’s name was purchased/value-added due to other spouse’s efforts
  • one spouse accumulated debts due to bad habits, recklessness etc

Money is a most unpleasant and troublesome factor when relationship ends. An experienced family lawyer, divorce lawyer or separation lawyer can provide the right information, advice and assistance to ensure that the process is swift, smooth and equitable.

End of Relationship: Financial Implications

Couples who enter into a relationship do so in the hope that it will be for life. A variety of factors could lead to a change in their feelings towards each other and ultimately, the end of the relationship/marriage.

One of the most sticky issues is the division of property and assets and sharing of liability and debt. The higher the amount of assets, the more complex is the equitable division. If the couple were also business partners, there could be many more complications.

Property Division in Divorce/Separation

“Property” includes money, assets, pensions, interest in property and disability benefits. The matrimonial home where the couple lived together prior to separation will also be subject to division.

The Family Law Act under which divorce is granted in Canada calls for the equal treatment of spouses. Marriage is seen as a debtor/creditor relationship or a form of equal partnership, where each spouse contributes to and is responsible for aspects like child-care, household maintenance, income-generation etc.

Live-in/common-law relationships do not fall under the purview of divorce. Hence, in such relationships, there is no automatic right. The couple has to undertake division of property between themselves by mutual agreement.

Married/Unmarried Couples: Rights and Responsibilities

There is no automatic right to equal division for unmarried couples, but if a partner has contributed significantly to increase in wealth, they can make a claim. The married spouse with higher-valued property has to ensure Equalization by paying half the difference of both property values to the other.

The person whose name is on the title-deed owns the matrimonial home in the case of unmarried couples and the other has no automatic right to it. In the case of married couples, regardless of who owns the property-title, division is equal and both have rights to live there.

Debts/liabilities are the individual responsibility of each when unmarried/married couples separate, unless they’re joint debts.

Canada Pension Plan benefits that each earned are divided equally for the time that they were living together/married.

Both unmarried/married parents must support dependent children under 18 or those above 18 enrolled in a full-time education program or who cannot support themselves due to disability.

Spouses are obliged to support each other after separation, regardless of being married/unmarried based on need and ability.

Under Ontario laws, when married couples separate, they are entitled to “Equalization” of net family property. If the couple chooses to settle matters between themselves, the court need not undertake this task.

When couples cannot agree on these issues, courts make decisions based on:

  • length of relationship
  • complete disclosure of individual property
  • recognition of property owned before marriage/live-in, debts, inheritances and gifts
  • earning/potential earnings of each
  • age and health
  • spousal support for other’s career
  • time and effort put into child-care
  • whether spousal responsibilities affected income-generation
  • property in spouse’s name was purchased/value-added due to other spouse’s efforts
  • one spouse accumulated debts due to bad habits, recklessness etc

Money is a most unpleasant and troublesome factor when relationship ends. An experienced family lawyer, divorce lawyer or separation lawyer can provide the right information, advice and assistance to ensure that the process is swift, smooth and equitable.

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