Constructive Trusts Protect Assets In Common Law Marriage
Whether couples choose to get married through traditional, official channels or not, they will accumulate assets during the course of their relationship. They may acquire the home they share, other real estate, personal property, household goods, and much more. If the relationship breaks down, however, the distinction between married spouses and cohabiting partners becomes significant. The Ontario Family Law Act provides for the equalization of net family properties between married couples, in which items are classified and valued. The richer spouse pays half the difference to the lower earning party.
This statute does not apply to a cohabitation situation, familiarly known as common law “marriage” but without the formal, legal requirements of marriage. There is no equalization of assets, which could result in one party suffering considerable financial harm as a result. Fortunately, you still have legal options to protect your interests, and an Mississauga family lawyer will assist. Some background information is also useful.
Criteria for Common Law Marriage: Though it is not a marriage in the legal sense, a relationship constitutes a common law partnership if:
- The parties have been continually living together for at least 3 years.
- The parties have a child together via birth or adoption, and they have been living together for at least 1 year.
- The relationship is conjugal, in the sense that there is a sexual relationship and emotional bond, as well as shared finances and communities.
Since the Family Law Act does not apply if the common law partnership ends, items purchased during the relationship belong to the person who paid for them. Anything they buy together is split.
Requirements for a Constructive Trust: In many conjugal relationships, one partner may contribute significantly to an asset the couple shares – though possibly not in name. The most common example is their home: Even though one person is the official owner and appears on the deed, the other partner pays the mortgage, taxes, utilities, and other amounts toward the home. Because they are not married, that individual would receive nothing.
To avoid such an unfair result, Ontario family laws establish a constructive trust in favor of the non-owning party. The person gains an ownership interest by showing:
- They enriched their partner, as the legal owner of the property, through contributions of effort or money.
- By enriching that person, the partner was deprived of the contribution that could have been applied elsewhere.
- There are no other grounds for the party to provide the enrichment, such as through a gift or agreement.
- There is a direct link between the partner’s contribution and the value transferred to the property.
Our Mississauga, ON Family Lawyers Will Guide You with Common Law Relationships
As you can see, parties still have rights to property even when they are not legally married. To learn more about constructive trusts and cohabitation agreements, please contact Zagazeta Garcia Lawyers LLP. Individuals in Mississauga, Brampton, and the Peel Region can call 905-232-0398 or visit our website to speak to a member of our team. We can schedule a free consultation to discuss details.