In recent years, after a few short years of marriage, there has been an upward trend and an increase in separations and divorces. The COVID-19 pandemic has helped this trend and the rise in divorces among newlyweds.
Real estate department after a short term marriage
Often, and without proper legal advice, some parties are misled into believing that after a short-term marriage they will not be entitled to an apportionment of property. Especially in the event that your spouse brought property or marriage home into marriage.
Treatment of the marriage home
In Canada, the two most important dates for the division of property are the marriage date and the separation date. Any assets accumulated during this period will be subject to division. For example, if you got married with $ 150,000 in your bank accounts and your bank account increased to $ 200,000 at the time of your separation, your net worth accumulated by $ 50,000. This increase in wealth from the date of marriage to the date of separation is shared.
What is special about your home? The marital or marital home has unique characteristics depending on the jurisdiction. For example, in Ontario, the marriage home does not receive a marriage withdrawal date. What does that mean? Remember that in the example of a bank account, only the $ 50,000 increase was subject to a split and not all of the $ 200,000 that was in the bank account at the time of the split. Conversely, the marital home will only be divided based on the value at the time of separation. For example, if your home is worth $ 1,700,000 at the time of separation, the entire value will be shared regardless of how little or how much it has increased over the duration of the marriage.
The five year rule
Sometimes a spouse can bring property into the marriage without their spouse’s contribution and years before marriage. Depending on the jurisdiction, the courts have recognized the potential injustice that can occur if the marital home is divided at the time of separation. For better illustration, imagine the woman bought a home for $ 700,000 in 2019. She later married in January 2020, but found that the marriage was not working in October 2020. By the time the parties split in October, the house’s value had risen to $ 950,000.
Under Ontario law and applying the division rules to the house, the husband would be entitled to half the value of the house, which was $ 950,000, even though the marriage lasted only ten months and he did not contribute to the purchase of the house.
Depending on the jurisdiction, the courts have recognized the injustice of the stroke of luck that the spouse would receive. In our example above, the husband would receive approximately $ 475,000 payday on the property (that the wife brought with her) upon separation.
To remedy this, the courts in Ontario use the five-year rule of thumb. The courts of Ontario allow unequal division of property when the equal division of property is indeterminable. In several cases, they have also ruled that it is considered irresponsible to receive any gain on the proceeds of a home from a short-term marriage of less than five years.
Some courts have used a mathematical formula that prorated the amount a spouse would receive based on the number of months they have been married over the legal five year period. For example, if the parties were married for ten months it would mean 10/60 or 16% of the otherwise equal split. However, the math formula is not mandatory and does not need to be used in all cases. It is at the discretion of a trial judge to review any evidence before him, recognize that an even apportionment would not be reasonable in the circumstances, and then determine a more reasonable number for apportionment purposes.
Know your rights
If you recently broke up with your spouse after a short-term marriage, make sure that you don’t let your spouse or their lawyer intimidate you into not being entitled to anything. While your spouse may have exclusively acquired the property prior to marriage, you are still entitled to a division of the marital property. Especially when you made contributions to the home that directly increased the value of the home as a result of your hard work and contribution.
Your rights to share property will vary depending on your jurisdiction. It is important that you know what you are entitled to and how marital property is treated in your jurisdiction. Before signing an agreement or waiving any of your legal rights and claims to marital property, it is important that you consult and speak with an experienced family or divorce lawyer who is familiar with the case law and precedent in your jurisdiction.
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