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Pre-Marriage Home Owners Beware

A couple shaking hands after out of court divorce settlement agreement reached through alternative dispute resolution

Pursuant to the Family Law Act, the value of assets brought into the marriage is generally deducted from the division of property between spouses on separation.  So for instance, If you come into the marriage with $100,000, you are entitled to come out of the marriage with the same $100,000 without it being subject to division. This is called a date of marriage deduction.

The one very IMPORTANT exception is the matrimonial home. If you own a home prior to marriage, get married, live in the home with your spouse, and separate while living in the same home, your spouse gets to share in the entire value of the home and have the value of the home “equalized” on separation. In  other words, if a spouse places $100,000  into the matrimonial home prior to marriage it must be shared on separation, while the same $100,000 does not have to be shared if placed into the matrimonial home 1 day after marriage.

Critics of this  provision claim that there is a drafting error in the Family Law Act that leads to this result. Whatever the case, pre-marriage home owners beware! The way to protect from this potentially inequitable situation  is by way of a properly drafted marriage contract that states, in part, that the value of the matrimonial home owned by one spouse on the date of marriage shall be deducted from the equalization payment.

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About the Author

Ken Nathens is the founding partner of Nathens Siegel and he was called to the Ontario Bar in 1994. Ken’s background is in all areas of Ontario family law and has written extensively on family law issues, including articles published in Divorce Magazine and interviewed by AdvocateDaily. He regularly contributes to the Lawyer’s Daily and has lectured on family law through Riverdale Mediation, and guest lectured to law students at the University of Windsor, Ottawa University and Osgoode Hall Law School.