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Hello again, my name is Anna Troitschanski and today I want to discuss a very important and frequent topic that comes up in family law, that of the post separation value of the matrimonial home.
Upon a breakdown of a marriage, all assets are generally valued as of the date of separation. However, negotiating and finalizing an agreement may take a long time. During this time, property, most often the matrimonial home, may significantly increase in value, especially considering what has been happening with our real estate market recently. If the matrimonial home is registered solely in one spouse’s name, that asset would be valued as of the date of separation and the non-titled spouse would not benefit from any post separation increase with respect to this property.
Should the non-titled spouse be bound by the separation date value or should they be able to benefit from any increase that follows?
A recent Court of Appeal decision clarifies this issue, namely Korman v. Korman. In this case the husband transferred his interest in the matrimonial home to the wife to secure the property from potential creditors. The Court, on appeal, granted the husband a beneficial interest in the property by way of a resulting trust and enabled him to benefit in the post separation increase of the matrimonial home.
Section 14 of the Family Law Act provides that there is a presumption of resulting trust in determining questions of ownership between spouses where there is a gratuitous transfer. Unless there is clear evidence of a gift, the presumption is not rebutted and one party holds one half interest in the property as a resulting trust in favour of the other party. In other words, where A transfers property to B at no cost, a resulting trust is presumed and the property reverts to A unless B can prove, through evidence that a gift was intended.
It appears that each case turns on its facts and depends on the circumstances at play. It is important to provide your lawyer with all the necessary information so that they may assess the strength of your claim. For example, why is the matrimonial home registered in one spouse’s name only? Is it because one spouse is in a risky business and attempting to protect the property from potential creditors? Additionally, what contributions did the non-titled spouse make to the property? Did they contribute to the purchase of the home, did they co-sign on the mortgage, and have they made contributions towards this property during marriage and separation.
If you would like more information about this particular issue or have any other questions pertaining to your matrimonial matter, please contact us in order to book a consultation with one of our lawyers at (905) 581-7222 or you can visit our website. Thank you for watching.