What is the matrimonial home?
The matrimonial home is the home where a couple lived at the time that they separated. Generally, the matrimonial home is the largest asset a family has, and often, most of their money is tied up in the matrimonial home. This can make physical separation difficult. In Ontario, the Family Law Act dictates how the matrimonial home must be treated during separation. The treatment of the matrimonial home under the Family Law Act recognizes the central role it plays in providing stability for families, particularly children, as well as its significant financial implications for separating spouses.
How is the matrimonial home treated differently?
If a couple is married, then it does not matter who owns the home on paper. Regardless of who owns the matrimonial home, the Family Law Act provides that both spouses have an equal right of possession to the matrimonial home, unless there is an agreement or court order that says otherwise. This means that when spouses separate, neither spouse can be forced to vacate the matrimonial home until an agreement is reached or a court order is obtained. This protection is generally not well known, and many people believe that if only one spouse holds legal title to the matrimonial home, they can change the locks. This is not true.
During separation, an equalization calculation is completed to determine the amount of money owed by one spouse to the other. The purpose of the equalization payment is to ensure that both parties leave the marriage on equal footing. An equalization calculation takes into consideration the value of assets and debts at the date of marriage, and the date of separation (also known as the valuation date). In this calculation, a spouse is given credit for assets owned at the date of marriage. However, this rule does not apply to a matrimonial home that was owned by one spouse at the date of marriage. Furthermore, ownership of the matrimonial home is not taken into consideration when determining the equalization payment.
The fact that the matrimonial home is not given a date of marriage deduction may have a significant impact on the value of the equalization payment owed.
Practical Implications of Separation for the Matrimonial Home
It is a general misconception that one spouse will get to “keep the house”, and the other is left struggling. The equalization process ensures that both parties leave the marriage on an equal footing. Sometimes this means that one spouse will purchase the other spouse’s interest in the matrimonial home, or it will be sold on the open market. Property division in Canada is a financial calculation that considers the value of assets and debts on the date of marriage and on the date of separation.
What should I do now?
Property division can give rise to complex considerations. It is important that you seek legal advice early in the separation process.
Alternatively, if you are not separating but are planning to get married and own a home, you can protect the value of your asset through a domestic contract.
Understanding your rights and obligations can help you make informed decisions and avoid costly disputes. Please call our office at (905) 523-6464 or submit an inquiry through our website to be connected with a lawyer.
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