Matrimonial Property

Matrimonial property is any property or assets that either spouse owns or obtains before or during the marriage. It doesn’t matter whose name the property is in. The law presumes that all matrimonial property should be shared equally (50/50) between the spouses if they separate or divorce.

Matrimonial property includes items you and your spouse own like:

• your matrimonial (family) home 
• other property you use as a family, such as a cottage
• furniture
• cars or other vehicles
• pensions from current or past employment
• RRSPs (Registered Retirement Savings Plans), RRIFs (Registered Retirement Income Funds)
• Canada Pension Plan (CPP) credits
• cash and savings, including Tax Free Savings Accounts (TFSAs)
• income tax refunds
• stocks, bonds, Guaranteed Investment Certificates (GICs), mutual funds
• an employment severance package.

You should talk with a lawyer about how your property, whether owned individually or together, may be divided if you separate.

Yes. Employment pensions and Canada Pension Plan (CPP) contributions are matrimonial property and are divided after separation.

These are common types of pensions:

• a defined benefit pension: traditional government employee pension where the employee receives a definite amount set by the terms of the pension plan
• a defined contribution pension: where the employee and employer contribute a set amount to the pension, but the final pension payable is determined at retirement
• Locked In Retirement Accounts (LIRAs) and RRSPs: which are often used to invest pension funds earned during past employment.

The value of a pension may not be what is on a statement. For example, defined benefit pensions have a future value. You may need to hire an actuary to figure out the value for the period of your relationship.

The general rule is that only the portion of the pension earned while living together before and during the marriage is divided.

Other than the Matrimonial Property Act, pension laws also apply. In Nova Scotia and for most federally regulated employers 50% of the pension value is the maximum transferrable amount. The law that governs the pension also applies to dividing the pension. Some pension administrators have particular wording they need in an agreement or court order to divide the pension. It is important to speak directly with the pension administrator to make sure that the wording of your agreement or court order will be accepted.

You should not give up rights to a share in your spouse's pension without getting legal advice.

The Nova Scotia Family Law website has helpful information about pensions.

CPP law requires spouses to share the credits earned for the period of their relationship, including time lived together as a common law couple and while married.

You cannot agree in writing or in a court order to give up a division of CPP credits. The right to a division of CPP credits is also confirmed in every divorce order that is issued in Nova Scotia.

You or your spouse must apply to CPP for a credit split. If you are entitled but do not want to get a share of your spouse’s CPP credits, then you do not need to apply for them.

Contact Canada Pension (Service Canada) at 1 800 277 9914 (TTY: 1-800-255-4786) or go to the Canada Pension Plan's credit splitting web page.

These are not usually considered matrimonial property:

• property you agreed to exclude in a pre-nuptial agreement, marriage contract or separation agreement
• a gift or inheritance you or your spouse received from another person. It may be matrimonial property if used for the benefit of the family, such as an inherited cottage used for family vacations.
• an insurance payout or court-awarded damages, such as payment for injuries from an accident
• personal possessions such as clothes
• property that you or your spouse acquired after you separated
• business assets (operated for making a profit). They may include the value of a company and assets such as tools or buildings used for commercial purposes. The business does not have to be incorporated.

The law about dividing business assets is complicated. It can be hard to determine if the business assets may be divided between spouses and how. You should get legal advice.

Matrimonial or family debt is acquired during the marriage for family purposes. The funds would be used for ordinary family items such as household expenses, the family home’s mortgage or debt from financing a family car. If some debts were acquired after you separated, they may still be considered matrimonial debts if used for necessary living expenses or to maintain the house, car or other assets.

The general rule is that matrimonial property is divided equally (50/50) between the spouses.

The spouses must usually have their jointly owned assets and property valued or appraised. The value is usually calculated at the date of separation. However, for some assets the date may be when either spouse applied to the court for property division.

Once you know the value of your matrimonial property, each spouse should value their matrimonial debts and deduct them to get the total (net) property value amount.

The spouse with the higher net amount then makes an equalization payment to the other spouse. They usually do that either with a transfer of money or property. This ensures that both spouses end up with the same net amount of money or property.

For example, imagine a married couple separated with the following assets and debts:

There is more than one way the assets and debts could be divided to achieve an equal split. After talking it over, the spouses decide on the following plan:

The spouses will split the debt evenly. They will sell the matrimonial home. Spouse A will keep the cottage, and in exchange, Spouse B will take an additional $25,000 from the proceeds of the sale of the matrimonial home. That $25,000 represents an equalization payment from Spouse A to Spouse B. 

So the spouses end up with the following:

Spouses can come to an agreement on how to divide their property. You can make this agreement before you enter into the marriage (pre-nuptial agreement), during the marriage (marriage contract) or after you separate (separation agreement). Before you sign any agreement, you should get advice from a lawyer. 

Each of your lawyers can help work out an acceptable agreement. Coming to a fair agreement with your spouse may be a lot less expensive than going to court to divide your property. 

Apply to court for a division of property under the Matrimonial Property Act. A judge will make an order stating how you are to divide your property. In most cases, the judge will order you and your spouse to share your matrimonial assets and debts 50/50. If you cannot reach an agreement, either of you can apply to court any time after you separate or as part of your divorce.

Courts are reluctant to make property changes to a pre-nuptial, marriage contract or separation agreement. The exceptions are:

• unless either spouse did not have advice from a lawyer before signing the agreement
• one spouse hid property and assets at the time of signing
• if one spouse was pressured into signing the agreement.

Courts may also change an agreement if it ends up being severely unfair to one spouse. If you want to try to change an agreement you should get advice from a lawyer.

The judge will only divide property unequally in limited situations including if one spouse:

• brought most of the property to the relationship and the marriage or Registered Domestic Partnership was short 
• wasted the matrimonial property, for example by gambling away the couple's savings
• gave up a career to look after the children so that the other spouse could build his or her business or career
• contributed to the education or professional career of the other spouse.

If you feel an equal division of matrimonial property would not be fair, you should talk to a lawyer.

Both spouses have equal rights to live in the family (matrimonial) home even if only one spouse is on the deed. One spouse is not allowed to sell or mortgage the home without the other spouse's consent. 

When couples separate or divorce usually one leaves the home. If they cannot agree on who will leave, either may apply to the court for an exclusive possession order where a judge decides who will leave the home. 

If there are children, the judge will consider which spouse is the primary caregiver for the children and whether it is in the children’s best interests to stay in the home with that person.

You do not give up rights to share in the matrimonial property by leaving the matrimonial home. A spouse who is ordered to leave by the court does not lose their ownership interest in the home, just the right to live in the home. 

Usually, business assets (things like tools or buildings used for a commercial business) are not considered matrimonial assets. This means that unless they are in the name of both spouses, they are not assumed to be shared 50/50.

However, you may be entitled to a share of the business assets that are in your spouse’s name if you worked for, helped build or maintain the business. This is considered if you were not paid or only paid a small amount for the work you did.

You could be entitled to share in some of the business assets if a 50/50 division of the matrimonial assets and debts does not give you a fair share of what you and your spouse own at the time of separation. If you think you have a claim against your spouse's business, you should talk with a lawyer

Usually, you are not responsible for your spouse's non-matrimonial debts unless you co-signed or guaranteed them. For example, you would not usually be responsible for debts your spouse acquired before the marriage or to run their business.

Both spouses are equally responsible for a debt that is in both names. You may also share responsibility for debts in your spouse’s name only if the money was used to buy something that benefited you and your family, such as vacations and home heating fuel.

Debt division can be very complicated, so it is best to talk to a lawyer about your options.

You should notify the bank in writing that you and your spouse are separated, and you do not consent to be responsible for any further money your spouse borrows.

If your spouse is authorized as a secondary card holder on any of your credit cards and you are concerned they will abuse it, you should cancel the secondary credit card.

Also, consider talking to your bank about joint accounts. You may consider reducing any overdraft that your spouse has access to and requesting that a joint account be changed to require two signatures to access funds.

You should consider removing your spouse as your beneficiary on any assets where they are named, such as  RRSPs, RRIFs, pension death benefits and insurance policies. Also consider seeing a lawyer to make a new will, enduring power of attorney and personal directive.

• nsfamilylaw.ca
• Legal Information Society of Nova Scotia
• Nova Scotia Legal Aid to see if you qualify for their help. Listed in the telephone book under ‘Legal Aid’ or online at nslegalaid.ca 
• ways to find a lawyer in private practice (lawyer you would pay)
• make an appointment with the Summary (brief) Advice Lawyer (under "What is the Summary Advice Counsel service?") for those who do not have a lawyer and are dealing with a family law issue.