Who Owns What Can Be Confusing During Divorce

Most people will have a certain amount of property which must be dealt with during divorce proceedings. Whether the amount of property is large or small, the legal rules governing the division of property can be daunting. There is a basic difference between property division law which applies to couples who have been married, as opposed to couples who have not been married, but have only lived together as common-law spouses. The Family Law Act applies to married couples, whereas common-law couples, regardless of the length of the time that they have lived together, are unable to use this law in order to govern their property rights, but rather they must resort to one of the two legal principles which may apply in these situations to them, known as 'constructive trusts'€ or '€œresulting trusts'€, and in this way attempt to make a claim to the property of their common-law spouse.

The Family Law Act mandates, that when a marriage is dissolved, the value of the property which the husband and the wife acquired during their marriage is shared. There is a specific procedure that must be followed in this situation to arrive at the final property division. The value of the net property in each spouse's name is added up as of the date of separation, so the date of separation becomes very important to ascertain. This can be complicated, because there are many types of property which may be included in the calculation, and some property is not subject to being shared, such as property which the parties owned at the time they entered into the marriage, certain monetary recoveries from personal injury settlements, certain types of inheritances, and property which the parties agreed not to share pursuant to a Marriage Contract. When performing this calculation, and in determining which party owns what property, the husband or the wife are usually seen as the owners of property, if they either purchased the property or if it is in his or her name. Therefore it becomes very important to ascertain who bought which property, and as you can imagine, this often leads to disputes.

When a couple who have been living together as common-law spouses are separating, different rules apply with respect to property division. Although there are no legislative provisions which mandate and regulate such a division, there are established legal principles which govern. Where the spouses have been cohabiting for more than a short period of time, it is possible to make a claim on behalf of either spouse, in order to establish a right to share in the property of the other spouse. If the wife, for example, contributed something to benefit her common-law husband, such as bringing up the children, which allowed him to go to work, and there is no legal reason why he should benefit at her expense, then she may be able to make out a claim for some of his property, through the legal concept of a "constructive trust", which would in this case determine that she may be entitled to share in his property. The common-law wife in this case, in order to obtain some share in the property, must have reasonably believed, at the time that she provided services to the common-law husband, that she would receive a share in his property in return, as opposed to believing that she would just receive a certain monetary amount.

In the situation, where the common-law spouses had agreed impliedly or otherwise, that one of them, for business or other reasons, would hold the property in his or her name, but at the same time in trust for the other, a "resulting trust" is created. It is presumed in this case that although the property is in the name of only one party, the other party also has equal ownership in that property, because the party whose name appears as the owner is holding that property in trust for the other party. This trust presumption can be rebutted, if the party in whose name the particular piece of property is being held, can prove that the property was a gift to that party from the other party, when it was put in that party's name, and that it was not intended that the property be held in trust for the other party.

As you can see, these issues are very complicated and require a detailed knowledge of the underlying legal principles.
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BLOG / Articles By George J. Kubes

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