Property Rights

• Author: JoAnn Kurtz
• Pages: 121-143

121

Introduction ........................... 122

Overview of Property Rights Under the

FamilyLaw Act ..................... 122

Equalization of Net Family Properties ..... 123

The Matrimonial Home ................. 136

Equitable Property Rights ............... 138

Rights of Unmarried Couples ............ 139

Tax Consequences of Property

Transfers ........................... 139

Chapter Summary ...................... 141

Key Terms ............................. 141

Review Questions ...................... 141

Discussion Questions ................... 142

Exercises .............................. 142

9

Property Rights

Learning Outcomes

After completing this chapter, you should be able to:

• Calculate the net family property of a spouse.

• Calculate the equalization payment owed by one

spouse to another.

• Define “matrimonial home.”

• Describe the rights given to a spouse under

part II of the Family Law Act with respect to the

matrimonialhome.

• Explain the equitable principles that apply to

propertyowned by spouses.

• Describe briefly the property rights of unmarried

couples.

• Explain briefly the tax consequences of property

transfers between spouses.

© [2022] Emond Montgomery Publications. All Rights Reserved.

122 PART II THE SUBSTANTIVE LAW OF MARRIAGEAND FAMILY BREAKDOWN

Introduction

When spouses separate, they have the right to seek a division of their property. If the

parties are married, the property division takes place in accordance with a formula set

out in the Family Law Act. If the parties are not married, their property is divided on the

basis of common law principles of property ownership and equitable principles oftrust.

In this chapter, we will be looking at the law of property rights, including:

• an overview of property rights under the Family Law Act,

• the equalization of net family properties on marriage breakdown,

• equitable property rights,

• the matrimonial home,

• the rights of unmarried couples, and

• the tax consequences of property transfers.

Overview of Property Rights Under the

FamilyLaw Act

Family property is dealt with in part I of the Family Law Act.1 Section 5(7) states that

the purpose of the property provisions of the Act is

to recognize that child care, household management and financial provision are

the joint responsibilities of the spouses and that inherent in the marital relationship

there is equal contribution, whether financial or otherwise, by the spouses to the

assumption of these responsibilities.

The property provisions of the Family Law Act allow spouses to share equally

in the value of most property acquired during the marriage and in the increase in

value during the marriage of previously owned property. With the exception of the

matrimonial home (discussed below), the spouses do not share the value of property

that they bring into the marriage; they share only in the increase in value during the

marriage of that property. Here’s an example.

George and Elaine were married. During the marriage, George bought a painting

for $10,000. George and Elaine later separate, at which time the painting is worth

$100,000. The entire $100,000 value of the painting is divided between George and

Elaine because the painting was acquired during the marriage. IfGeorge had bought

the painting before the marriage, the result would be different. George would have

to share with Elaine only the amount by which the painting had increased in value

during the marriage. So, if he paid $10,000 for the painting and it was worth $50,000

at the time of the marriage and $100,000 at the time of separation, Elaine would be

entitled to share only in the increase in value of the painting during the marriage, or

$50,000, which would then be divided between George and Elaine.

1 RSO 1990, c F.3.

© [2022] Emond Montgomery Publications. All Rights Reserved.