Family Assets: Special Rules for the Matrimonial Home
The matrimonial home, as defined in the Family Law Act, is “every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence.” While this provision only occupies one paragraph of the legislation, there are two consequences that result from the wording of this passage.
Firstly, the provision does not limit the matrimonial home to a single residence. More than one home can be eligible as a matrimonial home if it can be shown that it was normally inhabited as a family residence. For most families, this will take the form of a cottage or vacation home that is used on a regular basis. It should be noted, however, that the Family Law Act is provincial legislation, and that the qualification of another home being recognized as a matrimonial home must be found within the border of Ontario.
Secondly, and that which has been established through caselaw, the matrimonial home may take the form of a rental property for family law purposes, and therefore does not need to be owned. Even if one spouse is not on the lease, both spouses retain the right to occupy the matrimonial home. As well, if only one spouse is legally on title of the matrimonial home, both spouses retain the right to occupy the matrimonial home and the spouse not on title has a further right to equalization of the matrimonial home.
In some cases, one spouse may be bringing into the marriage a home solely owned by that spouse, which in turn becomes the matrimonial home. Save for a marriage contract protecting your interests, both spouses are entitled to one-half interest of the matrimonial home, even if the home is in one spouse’s name. While common-law couples may recoup their respective downpayment on a jointly-owned family home, based on a rebuttable presumption of resulting trust as established in MacIntyre v. Winter, 2021 ONCA, where the party benefiting from the gratuitous transfer may rebut this presumption by proving that the transfer was indeed a gift, the rebuttable presumption of a gift applies to married couples by virtue of the Family Law Act, whereby as a result of the marriage it is intended that the transfer is a gift, which may be rebutted but extremely hard to succeed given the legal nature of marriage. This has a significant impact when it comes to equalization.
Equalization comes into play upon the breakdown of the marriage. The date of separation becomes the valuation date. On the date of marriage, an economic merger takes place in which any property acquired by either spouse during the marriage, save for certain exceptions, as well as any increase in value of any property owned by either spouse following the date of marriage, becomes the net family property of the spouses. The separation date becomes the valuation date, in which any increase in value of the property beyond such date will not be subject to equalization unless the property itself is jointly owned. It is important to determine the value of your assets at the date marriage because this value may be deducted. This deduction, however, does not apply to the matrimonial home.
For family purposes, the matrimonial home is sacrosanct and does not fall under the regular rules of property division. If one spouse brings a family residence into the marriage that is the matrimonial home on the date of separation, that spouse cannot deduct the value of the home on the date of marriage and each spouse will be entitled to half of the value of the matrimonial home, and not just the increase in the value of the home since the date of marriage.
At Boardwalk Law, we understand that marriage is a legal commitment, with many ramifications that individuals may not be aware of. Protecting your assets through a marriage contract is just one of the ways that the lawyers are Boardwalk Law are able to assist clients in safeguarding not only their property but also their piece of mind. Contact Brandon Machado, Associate Lawyer at Boardwalk Law to learn more: [email protected] / 905.798.5509
