Divorce Questions - Splitting Assets

[Adrenaline]

I'm not married, but if I choose to get married in the future I have a few questions about splitting assets in the event of a divorce.

Say I own a condo, and the mortgage is completely paid off, so I own 100% of it and then I get married. In the pre-nup I specify that I have 100% ownership of the condo in the event of a divorce. If she lives with me in my condo for a few years while we're married and then we get divorced, will I still retain 100% ownership of the condo as specifed in the pre-nup? Or will the judge disregard the pre-nup completely and rule that my condo is the marital home so it must be split in half?

Further to that question, say I have 100% ownership of a condo before the marriage, and together we decide to sell the condo and move into a new place. Say the condo is worth 500k, and we buy a place for 600k so that the 500k of my sold condo goes towards the new place, and then my wife and I each contirbute an additional 50k to pay for it in full. In the pre-nup I specify that in the event of a divorce I will retain 100% ownership of the condo since I paid for it in full before the marriage, what will happen to the new place if we divorce? Would I get 550k and she gets 50k? How would the judge rule in that case?

 

[shane.katz]

I'm not married, but if I choose to get married in the future I have a few questions about splitting assets in the event of a divorce.

Say I own a condo, and the mortgage is completely paid off, so I own 100% of it and then I get married. In the pre-nup I specify that I have 100% ownership of the condo in the event of a divorce. If she lives with me in my condo for a few years while we're married and then we get divorced, will I still retain 100% ownership of the condo as specifed in the pre-nup? Or will the judge disregard the pre-nup completely and rule that my condo is the marital home so it must be split in half?

Further to that question, say I have 100% ownership of a condo before the marriage, and together we decide to sell the condo and move into a new place. Say the condo is worth 500k, and we buy a place for 600k so that the 500k of my sold condo goes towards the new place, and then my wife and I each contirbute an additional 50k to pay for it in full. In the pre-nup I specify that in the event of a divorce I will retain 100% ownership of the condo since I paid for it in full before the marriage, what will happen to the new place if we divorce? Would I get 550k and she gets 50k? How would the judge rule in that case?

The general rule is anything you bring into teh marriage you take out ofthe marriage. However there are abot 600 rules around. In the end the person who is wealthier and earns more will lose out in the divorce.

Once you sell the condo and buy a new place while marries- MAGIC happens. It becomes the matrimonial home which is always (usually) split 50-50.



Forget about prenupes. A good lawyer will go throgh it like a buzz saw. Your best bet is hiding assets and don't get married period or marry wealthier than you. Believe it or not I have a few low life friends who got support payments from their wives. It's a messed up process and divorce lawyers are VERY VERY expensive. So a battle over a 600K house can easily cost you 300K if you get nasty. So it's best to play nice and decide what is what.

if you do get divorced you want the best lawyer money can afford. Your first one hour with hm and all the laws and division of assets will have your head spinning likethe exorcist. There is no such thing as a yes or no answer in divorce law.

 

[thompo69]

The general rule is anything you bring into teh marriage you take out ofthe marriage. However there are abot 600 rules around. In the end the person who is wealthier and earns more will lose out in the divorce.

Once you sell the condo and buy a new place while marries- MAGIC happens. It becomes the matrimonial home which is always (usually) split 50-50.

I am no expert on divorce law, but I believe when the matrimonial home is purchased, be it before or after you actually get married, is irrelevant. The home you live in together, whether one partner owned it 100% prior to the marriage, is the matrimonial homeand is almost always split 50/50.

The exception is for common law marriages, in which case there is no matrimonial home.

 

[Adrenaline]

So in a common-law relationship, if I own 100% of the condo and we split, the judge won't split my condo in half?

Marriage is scary, if what you both are saying is true, there's no way I'd ever marry a woman who doesn't own her own place.

 

[Adrenaline]

Ownership is irrelevant in the division of family property.

What is divided equally is the INCREASE in value of family property between the date of marriage and the date of separation.

If you own 100% of the family property, then you must make an equalization payment (or payment in kind by way of divisable assets, if possible), IF there was an increase in value of your condo between the date of marriage and separation. Eg. Say the increase in the value of the $500K condo is $100K, then you must give your spouse $50K.

As for your pre-nup agreement, I believe you can exclude the matrimonial home but don't quote me (I'm not a lawyer but have taken PD courses that included matrimonial law).

In your example, you're pre-nuptial agreement must specify substituted property in order to exclude the new or 2nd matrimonial home, in which case, you get $550K.

Again, these are questions you should ask a lawyer that practices family law.

That seems much more fair and much more reasonable. If we live in my 500k condo that I have 100% ownership of, and then we split a few years later whereby the condo is worth 600k, I'd be comfortable splitting the 100k increase in half, I believe that's fair, but to split it 300k/300k would be ridiculous, unfair, and completely unreasonable.

 

[Moraff]

I thought common law marriages are subject to the Family Law Act?

Isn't there a two (2) year rule or similar proviso?

Think it's only one year, not 2. As far as CRA goes it's one year unless there's a kid involved, then it's as soon as you move in together.

I know of one guy who charged his GF rent during her co-habitation (not a nice guy but a ruthless businessman who's a prick as far as I'm concerned), so that it wasn't deemed common law.

Good dodge, but if she could prove that they were cohabitating (ie only a 1 bed-room apartment) the judge would probably rule common-law.

One of my acquaintances during university would get into a fight with his girlfriend and throw her out of his apartment every 6 months or so just to avoid any chance of common-law. Yes he was a jerk. But she kept going back for more.....

 

[mandrill]

I'm not married, but if I choose to get married in the future I have a few questions about splitting assets in the event of a divorce.

1. Say I own a condo, and the mortgage is completely paid off, so I own 100% of it and then I get married. In the pre-nup I specify that I have 100% ownership of the condo in the event of a divorce. If she lives with me in my condo for a few years while we're married and then we get divorced, will I still retain 100% ownership of the condo as specifed in the pre-nup? Or will the judge disregard the pre-nup completely and rule that my condo is the marital home so it must be split in half?

2. Further to that question, say I have 100% ownership of a condo before the marriage, and together we decide to sell the condo and move into a new place. Say the condo is worth 500k, and we buy a place for 600k so that the 500k of my sold condo goes towards the new place, and then my wife and I each contribute an additional 50k to pay for it in full. In the pre-nup I specify that in the event of a divorce I will retain 100% ownership of the condo since I paid for it in full before the marriage, what will happen to the new place if we divorce? Would I get 550k and she gets 50k? How would the judge rule in that case?

1. If you live in the same condo you brought into the marriage and the prenup says you own it 100%, you continue to own it 100%. In fact, you would continue to own it 100% without the prenup.

That is because the Family Law Act does not transfer ownership, it provides that net family property is equalized with a cash payment. So you would continue to own the condo, but you would pay her $250,000 with or without the prenup.

2. Well, same result as #1 for the same reason.

 

[Adrenaline]

1. If you live in the same condo you brought into the marriage and the prenup says you own it 100%, you continue to own it 100%. In fact, you would continue to own it 100% without the prenup.

That is because the Family Law Act does not transfer ownership, it provides that net family property is equalized with a cash payment. So you would continue to own the condo, but you would pay her $250,000 with or without the prenup.

2. Well, same result as #1 for the same reason.

That's horrible, isn't there a way to specify in the pre-nup that I would get 100% ownership of the condo and would not have to pay half of the value of the condo out in cash in the event of a divorce?

I'm getting conflicting answers here, which is to be expected without consulting a family lawyer. But I don't feel like paying $250 to ask this question to a lawyer since I'm not getting married anytime soon.

 

[OddSox]

I'm sure he got it in writing. She probably had her own room in his mansion. Nothing wrong with sleeping with your tenant I suppose

A good lawyer and a sympathetic judge would tear that dodge apart. In fact, it's a good chance that Revenue Canada would tear it apart first, because he was probably using it to dodge taxes at the same time...

 

[fmahovalich]

I would go

to a lawyer...many have a 1/2 hr free consulation before you hand over a retainer. Get your questiuons and variations in order..walk in and fire away

 

[OddSox]

If you're going to be serious about this, you need a lawyer.

One of the things a prenup can do is establish the value of what you're bringing into the relationship, and establish the future value of that asset.

For example, your house might be worth X number of dollars now - but that evaluation can be relative. A proper prenum will establish the current value (through an appraisal) and also establish a future rate of division for that particular asset - maybe 50-50 or 60-40 or whatever. It will do the same thing for every other asset you have - which in rich people's cases might amount to much more than the value of the family home (eg if your name is Paul McCartney how are you going to determine what part of your income is 'pre-nuptual' compared to post-nuptual).

In other words, if you have enough money on the line (not just a house or two), hire a lawyer or two..

 

[superstar_88]

I'm in the same situation. I own a condo 100% and have investment assets. She is in her early 20's and has no assets. She wants us to get married and have a child. What if I use a line of credit to put a down payment on a house and take out a big mortgage and rent out the condo. If we divorce will I be able to retain the condo 100%? The matrimonial home being the house is it split net of mortgage and line of credit debt? Say house is $600,0000 and I put 100,000 of my own money and 100,000 of a line of credit and mortgage 400,000. What will she get if we divorce say after a year with and wihtout a chld? Marriage is scary indeed but one cannot be single forever.

 

[lurkerjoe]

That's really the best advice.

Best advice is to not get married.

But if you must, then don't rush into it, make sure she brings assets that are similar to yours and never, ever under any circumstances, allow her to be a stay at home mom, delay her career beyond 1 year per child or otherwise dependent on you.

Latter = spousal support.

 

[mandrill]

I was actually being a clever-ass little prick, because the OP did not have any real understanding about how family law works. "Ownership" per se is rarely involved. It is all based on a system of cash equalization payments after separation.

You can contract out of the Family Law Act and have a pre nup which says "no equalization" under any circumstances. That would cover both circumstances stated by the OP, except the issues of constructive trust and resulting trust in #2.

Think you should really go see a lawyer now?

 

[mandrill]

So you can contract out the 'sanctity' of the matrimonial home?

Thank you for your sound counsel Oagre.

Yes, he should really see a lawyer.

You can contract out of equalization and any ownership issues. You cannot contract out of possessory rights. So the owner can ensure ownership remains with him, but cannot eliminate all possibility that a judge would give her possession of the house for a period of time - maybe years - with him paying her bills.

Getting more confused?

 

[Adrenaline]

Thanks for the advice, I'll see a lawyer when I'm ready to get married.

I think one way to get around it (assuming I marry a woman with no condo or house) is to sell my condo, and then buy a new condo or house whereby we split the cost and make equal payments, that's really the only way I'm assuming to not get screwed in the event of a divorce.

 

[Anynym]

Be sure you're aware of what the rules are in law which are being applied in order to ensure equitable treatment.

A quick google of "Ontario Family Law Matrimonial Home" brings up these links (among others):
http://www.ontariofamilylaw.com/outline.html
http://www.attorneygeneral.jus.gov.on.ca/english/family/

There appear to be a number of rules which a Judge would apply, as well as some recommendations for ensuring an equitable treatment under the law.