They say home is where the heart is, but what happens when spouses decide to separate and go their separate ways? The “matrimonial home” is a very special creature, and legal issues in relation to it can have a very large impact on a spouse’s financial situation in the context of a separation. A house is only considered a “matrimonial home” if the spouses living in it are married, and not in a common law relationship.
In Ontario, both married spouses have a right to equal possession of a matrimonial home. In other words, you and your spouse are both entitled to live in the home unless an agreement or court order says something else. It doesn’t matter if either you or your spouse is actually the legal owner. The spouse who doesn’t own the home still has a right to live in the home, even if you have separated. Also, if one spouse, or both of you jointly own the matrimonial home, neither of you can sell it without the consent of the other.
If you are married and you separate, the net value of your and your spouse’s assets (all assets minus all debts) will be calculated at the date of your marriage, as well as at the date of your separation. This is done to determine each of your net increases of wealth during your marriage and the appropriate division of assets when you separate.
There is an exception in this calculation for the matrimonial home. Even if you owned the matrimonial home on the date of your marriage, and brought that asset into the marriage, you do not get to include the value of the home as something you owned on the date of marriage. Instead, the full value of the home at the time of separation is included in the calculation of your and your spouse’s net assets on the date of separation. Simply put, you do not get a financial credit on marriage breakdown for having brought the matrimonial home into the marriage.
Another thing to consider is that any money that was gifted to a spouse from a third party, for example, through an inheritance, is excluded from the calculation of the spouse’s net assets on the date of separation. If that money is put into the matrimonial home, for example to pay down the mortgage or renovate, the exclusion will be lost and it will be included in the calculation.
If you are thinking about getting married and already own a home, you should consider getting some advice from a lawyer to find out if you should take steps to protect the value of your home in the event of a separation or divorce.
