This is the first in a 3-part series on women’s financial rights and responsibilities when a relationship ends. Part 2 looks at determining the date of separation and Part 3 discusses spousal support.
Historically, men have tended to manage the family’s money and make the big financial decisions about things like buying a house or a car. And, at one time, women had few legal rights to share in the family money and property unless they could show directly that they had contributed to it.
While some laws have changed to ensure greater protection for some women and many women now have their own income from employment and are more involved in financial management within the family, considerable confusion remains about just what happens in terms of money and property when a relationship ends.
This confusion increases when the woman’s partner has controlled the money throughout the relationship and uses financial power as a way to try to continue to control and intimidate her after the relationship ends.
What kind of relationship are you in?
In terms of day to day life, there are not a lot of differences between being married and living common-law with your partner.
Many people think that their common-law relationship is the same as a marriage once they have lived with their partner for at least three years. This is not correct.
Despite increased acceptance of common-law relationships culturally, socially, religiously and legally, there is a significant difference between the property rights of people who are married to one another and people who live together.
While some legal rights are available to people in a common-law relationship once they have had or adopted a child and/or lived together for a minimum period of time, not all legal rights are the same.
In particular, the right to share the value of property (a house, cottage, car, investments, etc.) is very different for people in common-law relationships than for people who are married.
Even where legal rights are the same, different situations require different lengths of cohabitation for those rights to kick in.
It is important for you to know what kind of relationship you are in so you know what your rights and responsibilities are.
If you are married to your partner
When you break up the two of you must share equally the value of the property (other than the family home – see page 8), including workplace pensions, that you acquired during your marriage, whether or not you both contributed financially to that property. This means that whichever one of you has property with a higher value must pay half of the difference between the value of their property and the value of their spouse’s property to their spouse.
Example: If you have property worth $5,000 and your spouse has property worth $10,000, your spouse must pay you $2,500 (or give you $2,500 worth of property). This amount is calculated by adding the value of each of your properties together, then dividing that total in half.
$10,000(spouse) + $5,000(you) = $15,000
$15,000 ÷ 2 = $7,500
Each of you should have an equal amount of the value of your property: $7,500. Whichever person has more has to pay half the difference to the other. Because you have less than your spouse, your smaller amount is subtracted from the $7,500. The remainder is what your spouse must give you.
$7,500 – $5,000 = $2,500
Now your amounts are equal.
$10,000 – $2,500 = $7,500(spouse)
$5,000 + $2,500 = $7,500(you)
Time limits: You have up to 6 years after you separate to start a claim for division of property, but if you divorce before starting this claim, you must start it within 2 years of obtaining a divorce.
Debts: When you are married, you are each responsible for any debts that are in your name only. For instance, if you have a credit card in your name and your spouse has one in his name, you are each responsible for paying your own debts. However, if you have a joint credit card, even if your spouse is the only one who uses it, you may be responsible for half the debt that your spouse runs up on the card.
Canadian Pension Plan: CPP credits that you and your spouse earned during the years of marriage are divided equally between the two of you. You must wait until you have been separated for at least 12 months before applying for a division of CPP credits. You can start a claim any time after that – there is no cut-off date.
If you are or have been in a common-law relationship
The way property is divided is very different.
There is no automatic right to a division of property as there is for married people. Each partner in a common-law relationship takes out of the relationship whatever property they brought into it as well as anything they bought during the relationship. In some circumstances, if you can show that you have contributed significantly to the value of your partner’s property, you may be able to obtain a share of its value.
Time limits: There is no limitation period set out in law within which you must start a claim for division of property if you have been living in a common-law relationship. However, judges tend to impose timelines similar to those for married people: within 6 years of the date of separation.
Debts: In a common-law relationship, each of you is responsible for debts incurred in your name only (e.g. a credit card in just your name), and you are both responsible for jointly-incurred debts (e.g. a credit card in both of your names, even if only one of you has put most of the debt on the card).
Canadian Pension Plan: If you and your partner lived together for at least 12 consecutive months, CPP credits that you and your partner earned during the years you were living together are divided equally between you. You must wait 12 months after separating to apply and must apply within 48 months.
Whether you are married or in a common-law relationship, you and your partner can set your own terms for how you want to deal with property if your relationship ends by writing a domestic contract.
The matrimonial home
If you are married
The value of the home(s) you and your spouse live in will be dealt with differently than other family property.
The term “matrimonial home” refers to any property that you and your spouse (and your children, if you have any) lived in together as a family. There can be more than one matrimonial home: if you and your spouse own a primary residence as well as a cottage, both are considered to be the matrimonial home, for the purposes of property division.
When you and your spouse separate, you must share the total value of the matrimonial home equally between you, regardless of when it was bought, whose name is on the deed, whose money covered the down payment and who has been paying the mortgage.
Time limit: As with other property, you must start a claim for a division of the value of the matrimonial home within 6 years of the date of separation or 2 years of obtaining a divorce.
If you are or have been living in a common-law relationship
The family home remains the property of the person whose name is on the deed.
- If you and your partner own the house as “joint tenants”, then you and your partner both own the house equally.
- If you and your partner own it as “tenants in common”, then you own whatever portion of the house is set out on the deed.
- If only your name is on the deed, you own the whole house, and you do not have a legal obligation to share the value with your partner.
- If only your partner’s name is on the deed, the same applies.
If you are not sure how your house is owned, the best place to start is to have a look at the deed, which will show who owns the house and, if both of you do, whether that is as tenants in common or joint tenants.
Property division on reserve
If you live on a First Nation, provincial laws with respect to division of family property do not apply. Federal rules with respect to the division of matrimonial real property (MRP) have been in place since 2013, and some First Nations have developed their own laws related to MRP that meet their particular needs and respect their cultural traditions and history.
The first step, if you live on a First Nation, is to find out whether your community has its own set of rules or whether it is governed by the federal rules set out in the Family Homes on Reserves and Matrimonial Interests or Rights Act. Once you have this information, you and your lawyer can discuss the best approach for you.
Next in the series: How do I determine the date of separation?