Don’t Fool Yourself: Use a Lawyer #1

How Property is Split in Ontario after Separation

By John T. Syrtash, Associate, Garfin Zeidenberg LLP, a Toronto family law lawyer for the past 38  years.

Question: My sister will marry next month. Her husband and my sister will live in the property, which is jointly owned by my sister and me, and I will move out. I paid over half of the value of the house upon purchase. I now pay property taxes and utilities. My sister is paying the mortgage for the rest of the value. My question is: will that entitle her husband to have any interest in the property should they separate?

Answer: In the event of a separation of your sister and her new husband, your sister’s share in this home would be considered a ‘matrimonial home’ under the Ontario’s Family Law Act. What this means is that one-half of its entire equity, including one half of its premarital value, would be included when calculating her net worth or ‘net family property’ as of separation. They compare her net worth to her husband’s in the event of separation, or if one of them dies, and the richer of the two must pay the poorer an equalization payment. To give a simple example, if the only asset owned by your sister is her half-interest in a home worth $400,000 and her half-interest on the date of separation was $200,000, and her husband has no assets then she would have to pay him $100,00 in the absence of a marriage contract (or prenuptial agreement). However, your one-half ownership of the home remains unaffected.

Question: If my sister and her husband want to prepare a prenuptial agreement, do they have to do it by lawyers, or can witnesses alone can do that?

Answer: You always need two witnesses. They can do so without lawyers, but then again, you can also do surgery on yourself without doctors, and I don’t advise that either. Use competent legal counsel. These agreements require knowledge of the law and require the skill to draft an enforceable contract. Don’t fool yourself.  

Question: If there’s no prenuptial agreement, do investment and RRSPs, etc. before marriage has to be shared if the couple separates? 

Answer: Except for a home where both parties still live on the date of separation, the values of premarital assets do not form part of a spouse’s net family property. They do not share premarital assets. However, any increase in the values or premarital assets after marriage are included.   

Neither GARFIN ZEIDENBERG LLP nor John Syrtash is liable for any consequences arising from anyone’s reliance on this material, presented as general information and not as a legal opinion.

John T. Syrtash,
Yonge-Norton Centre
5255 Yonge Street, Suite 800
Toronto, Ontario, Canada M2N 6P4
Cell: (416) 886-0359
Fax: (416) 512-9992

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