What Happens To The Family Home In A Divorce?
What Happens To The Family Home After Divorce?
Monday, October 23, 2017
Have you ever wondered what is going to happen to the family home after the divorce? there are a few ways that can happen. but first, we must understand the Ontario Law. which tries to assure that each of the spouses net worth increases by the same amount during the marriage. This means (subject to some exceptions) you get to keep what was yours before the marriage and you only share the increase in net worth between the date of the marriage and date of separation.
However, there is an exception to this rule and that has to do with the matrimonial home.
A matrimonial home is a property owned by one or both of two persons who are married to one another which, upon the application of one of the spouses to a court, is subject to division between them. A matrimonial home is important when a couple is in the process of divorce since this will dictate the outcome of the couples home. Bear in mind, that this only applies to legally married couples and not common law spouses.
In the division of a property, each party is entitled to one half of the value of the accrued property and not one half of the property itself. For a simple explanation, is if a house was appraised for $ 200,000 and has $70,000 in loans. That means that the equity of the home would be $130,000 in which once the home is sold, the loans have been paid off, the remaining funds can now be split between the parties. Which would be $65,000 each after the subtraction of the loans.
Another way this can play out is, spouse 1 stays in the home and spouse 2 has decided to move out the home. Spouse 2 now has to be paid their portion of the home’s equity. In this example, spouse 1 who has decided to stay in the home now has to pay spouse 2 $65,000 for spouse 2’s equity of the home. However, deals can be applied in which spouse 2 can bargain with spouse 1 for a smaller portion of equity for something in return. For example, only paying out spouse 2 a smaller sum of money for the exchange of maybe not having to pay child support for a period of time.
Another scenario in a divorce is if a spouse (say spouse 2) had a cottage before the marriage. This cottage is now a matrimonial home since spouse 2 has brought this property into the marriage. However, there is an exception to this if the cottage is not used by the couple and is used as a rental home rather than a second home.
Dealing with divorce is hard, but dealing with matrimonial properties in a divorce is harder. If you are currently going through the motions of a divorce and are in need assistance in finding a home or selling your home. Contact us at firstname.lastname@example.org or call us at 519-756-8811 and we can help you find the answers you are looking for!
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