Most adults know that sometimes assets are divided when a couple splits up. For married or unmarried couples, this may be done by agreement; or, for married couples only, by statute. This begs the question, what happens when you own a house with your ex?
For couples who live together but aren’t married, a cohabitation agreement can specify how assets and debts are to be divided (if at all) if the relationship breaks down. An agreement can also provide clarity and certainty about each party’s respective interest (if any) in a particular asset – such as when it is in one person’s name, but both contribute to it.
This is extremely important for valuable assets such as your house. Unmarried couples have no statutory obligations to divide up property. Without an agreement to the contrary, each person simply leaves with what they own.
Some married couples may have had the foresight to make a marriage or prenuptial agreement that governs what happens to your jointly owned house in case of divorce. Even if a divorcing couple doesn’t already have one, it’s not too late to seriously try to negotiate an agreement. For married couples without an agreement, there are special rules that govern the division of the family home.
A couple’s “matrimonial home” often is their most valuable asset and each spouse is entitled to half of the net equity in it. Unless a court orders otherwise, both spouses have an equal right to possess it.
When dealing with the division of your family home, it is best to look at it in the context of all separation issues and negotiate a wholesome deal between both parties. A divorcing couple can take four different approaches to the family home:
If parties cannot agree what to do with the matrimonial home, the issue can be brought before the court. In this situation, the home is often ordered sold.
Given that a multitude of scenarios can apply, divorcing spouses often find legal advice helpful. A negotiated agreement made beforehand — or even after the marriage breaks down — is generally a much faster, less expensive, and less emotionally draining way of dividing your home than contested litigation.
If you have any questions, you can feel free to contact Shulman & Partners LLP at (416) 661-2777. We will be more than happy to help you.