Podcast: The Legal Definition of a Matrimonial Home
In this transcribed interview with Dale Goldhawk of Zoomer Radio AM740 in Toronto, family and divorce lawyer Lorne Fine of Fine & Associates Professional Corporation discusses the legal definition of a matrimonial home. Read the interview below, or listen to the podcast at the bottom of the page.
Goldhawk Fights Back Podcast: Recorded March 25, 2014
Host: All right, here we are. We’re on the radio now, Lorne, so you can start talking officially, okay? Are you all plugged in?
Lorne: All plugged in.
Host: Lorne Fine is here and he, of course, is our resident family and divorce lawyer here to answer all your questions about all of these issues. Today, Lorne, we’re going to start off by examining the definition of what is known as the matrimonial home. We’ve often talked about that in past shows in terms of what it is and you’ve got, what are you trying to show me there?
Lorne: Do you want, I thought we were going to go through the list first from our last session. We had a list about the top ten reasons why people get divorced. We didn’t finish.
Host: Oh, right. What number were we on?
Lorne: We were close to finishing. We were on number seven. Number eight, sorry.
Host: Well what’s the next one then that we didn’t—
Lorne: Do you want to go through that?
Host: Yeah, sure. Let’s do that first and then we’ll talk about the proper definition of a matrimonial home, what that means.
Lorne: So let’s just recap.
Host: These again are reasons.
Lorne: Reasons, this is based on my opinion, not scientific at all, but from my experience the top ten reasons why marriages fail. Number one was financial problems. Number two was sexual issues. Number three was communication problems. Four was abuse problems. Five was addiction. Six was dealing with other families and friends of the family. Number seven was parenting problems.
Number eight, where we are now, is completely from my opinion again, personality problems. Incompatibility. When people get married, they change over time. The person that you marry may not be the same person ten years down the road or five years down the road. People change. When that happens, sometimes it results in difficulties in the relationship. Whether they can’t agree about sexual issues, or emotions, or there’s hostility between the parties.
Host: They just become different people.
Lorne: Different people. They grow apart. Number nine, expectation problems, expectation issues, becoming unhappy. People, I think some people, have an unrealistic expectation of what marriage is. Marriage is not always romance and what you see in the movies. Sometimes it fades over time. The romance may fade, reality sets in, there’s bills to pay, there’s work to be done. It’s not always roses and chocolates and stuff.
Host: It’s a partnership, isn’t it? It’s a merger. It’s running a business, the family, in so many different ways, but running it together.
Lorne: Right. Exactly. It’s a partnership and that’s exactly it. So some people get bored and that’s what happens.
Host: Those would be the kinds of divorces, the last two situations you’re talking about, where the divorce might be more amiable than for other reasons. I mean you kind of drift apart.
Lorne: Yeah it can be.
Host: You might go your separate ways.
Lorne: Yeah, it can be. I think that, though, if you go to your different ways and your expectations change, it may also result in infidelity. That’s when people start straying. So these are connected, right? People may get bored and have an affair and then it results in a separation. But you’re right, sometimes it’s just a matter of moving apart and just realizing that and moving on.
Host: But of course you can’t take the emotion out of this kind of situation anyway. If you come to a divorce, there are going to be in varying degrees a lot of emotion involved. That’s what makes your job tough from time to time.
Lorne: There always is. Very few where people treat it like a business and say okay we’re separating. Let’s do this with no emotions and just move forward. But that’s why you have a lawyer. You have a lawyer whose objective and not emotionally involved who can give you objective advice and that’s why we’ve said this many times, people should consult a lawyer if they’re separating because the lawyer can give you objective advice.
And God forbid if I ever went through a separation, I wouldn’t act on my own behalf. I would get a lawyer because I would be too emotionally involved. I wouldn’t be able to think straight.
Host: And that’s the part maybe that people don’t readily think of. It isn’t just you get a lawyer to necessarily represent your interests and all that sort of thing that lawyers do, but it’s to be that kind of unemotional, detached person who keeping your own interests in mind, the interests of your client, can sort of be the steady hand and the steady voice.
Lorne: Absolutely, absolutely.
Host: Okay, now we’re at number ten.
Lorne: Last one. Last one is just time problems. You know, it’s sometimes very difficult to maintain a balance between family, friends, work, all these parts of an individual’s life have to be balanced. Sometimes people don’t have that balance. Maybe you’ll work too much and you’re not spending time with your family. Maybe you’re out with your friends too much and you’re not spending time with your family. So maybe you’re not working and you’re just spending time with your family.
Everything has to be balanced, and sometimes when that’s out of whack, I have many situations where one spouse isn’t working hard enough and the other spouse says why am I supporting you? Why aren’t you working hard enough? And things fall apart. Or situations where someone is spending all their time at work and not at home. Right?
Host: Can’t be good, no.
Lorne: Can’t be good. It’s like any relationship that you have, whether it’s with friends or family. With a marriage, you have to work at it, right? It should come easy, but you have to dedicate yourself.
Host: By the time they get to you, they’re working out their divorce. They’re not working at staying together. Although you have said from time to time you’ll get people who will decide to try it again. Because isn’t that what lawyers are supposed to do. You’re supposed to say are you sure about this?
Lorne: You’re obligated.
Host: You’re obligated to do that.
Lorne: You’re obligated. Yeah, when you’re signing a divorce application, you’re obligated to say have you thought about marriage counseling? Are you sure you want to do this? Maybe we should mediate this instead of going to court and so on? Most of the time people look at me like I’m nuts when I suggest that to them because by the time they’re sitting across from me, it’s a process. It may take years before they get to me. But you’re still obligated.
Host: They’ve had years to grow to not liking each other even a little bit, right?
Lorne: Right. It’s a long, it’s a process.
Host: Now what keeps people, I mean flip it over for a minute. What makes a good marriage? You never know do you what couple are necessarily going to make a long haul great relationship out of it and those who won’t? You go into it. I think it’s a bit of a chance at the beginning. You don’t really know, right?
Lorne: Always. When I got married, my clients thought I was nuts. How could you get married after all of the stuff that you see?
Host: Haven’t you learned anything from all your cases?
Lorne: My clients said what are you doing? But you know, you take a chance. That’s what life is about. And thank God, I have a good wife. But I think we’ve said this before.
Host: And she would say that she has a good husband?
Lorne: She would say she has an excellent husband.
Host: I see. I see.
Lorne: The key to happiness is yes honey. Yes, honey. Whatever you want. No problem. That’s the key.
Host: Now you don’t mean that. You can’t do that, either. That’s humoring your spouse.
Lorne: No, sometimes, I think sometimes, from my personal opinion, sometimes people get too involved and they have to win. Sometimes you have to compromise. You always have to compromise. Sometimes you have to give in and a happy wife is a happy life, right?
Host: But there’s still that allure there, isn’t there? People still if they discover they’re in love with somebody else in a vast majority of times, they want to at least think about getting married, about making it a partnership, right?
Lorne: Yeah. Well you can also live together as common law spouses and it’s still a partnership. But for some people, it’s important to have that marriage license and it’s important to have that certificate to say that you’re legally together. But you can also live common law.
Host: But if you live common law, is there a role for you as a divorce lawyer? Sort of, I mean.
Lorne: Well there’s still going to be, we’ve discussed this previously. There’s still going to be support issues. There’s still going to be property issues. But a little bit different. Different than being married. The Family Law Act specifies how property is going to be divided if you separate, but not so for common law spouses. So the act is geared towards married couples, not so much common law couples as far as property is concerned.
Host: You would still have clients who have been living common law and there are issues of ownership, children to look after, that kind of thing.
Lorne: Absolutely. So yeah, common law is probably more difficult as far as separating property is concerned than as opposed to married couples.
Host: Does common law favor the man or the woman?
Host: Particularly, not really?
Lorne: No. It’s all about contributions to the marriage or to the relationship and what your contributions were.
Host: Well then does living common law favor the person with the big income as opposed to the person with the small income?
Lorne: It favors, I would think, the person who made the contributions as opposed to the person who did not make the contributions to the relationship. Whether it’s property.
Host: Well I guess that’s what I was saying.
Lorne: Well if one person makes more money than the other person, then there’s support issues. Then let’s say the male partner is making money, he would have an obligation to pay spousal support to the female partner even though they’re not married. But when it comes to dividing property, you’re looking at contributions. Who bought what and what their contributions were to the property.
Host: Who put into the partnership as it were.
Lorne: Yes. As opposed to a married couple where that’s not important. Who bought the matrimonial home, right? We’re going to talk about the matrimonial home. Doesn’t make a difference if the husband purchased it or the wife purchased it. It’s treated as special property.
Host: Which of course brings us to that definition of what exactly is the matrimonial home.
Host: It doesn’t apply in common law, first off.
Lorne: Right. There’s confusion out there about what a matrimonial home is. It’s special. It’s treated as special property under the Family Law Act. So what is a matrimonial home? The definition of a matrimonial home is firstly, one party has to have an interest in the property. Two, it has to be ordinarily occupied as a family residence on the date of separation. So they have to live in the house on the date of separation.
Host: So it can’t just be a property one of the spouses owns somewhere. It has to be, in fact, the home.
Lorne: Right. But you could also have two matrimonial homes. You can have a cottage, a regular house, you can have—
Host: Can you have three?
Lorne: It would be hard. You know, let’s say as far as the cottage is concerned. Let’s say you go to the cottage every weekend. You’re using it as a regular residence. Then it’s the matrimonial home. Because it’s defined as that property, there’s all kinds of special characteristics. One characteristic is that, let’s take a step back. So when you’re dividing property, under the Family Law Act, you’re dividing the increase of your net worth from the date of marriage to the date of separation, your increase, and you’re splitting the difference between one spouse and the other spouse. They’re both net family property owners.
Host: To equalize it.
Lorne: To equalize it. Exactly.
Host: That’s, in fact, the basic principle behind the marriage, isn’t it?
Lorne: That’s the basic principle, right. And you’re trying to equalize your net family property so the idea is that everyone walks away with the same amount of money basically. That’s the idea behind it.
Host: That’s the idea. It doesn’t always work out that way.
Lorne: Well, you try to make it work out that way.
Host: Of course.
Lorne: So you’re dividing the increase in your net worth. So let’s say you have an RSP that’s worth $1,000 on the date of marriage and it’s worth $10,000 on the date of separation. It’s increased by $9,000 and that’s what you’re sharing. You’re sharing the increase of $9,000.
Host: So that would be shared equally between the two partners.
Lorne: That’s part of your net family property. Now for a matrimonial home, what’s different is you get no date of marriage deduction. So if you bring in a house and it’s the same house on the date of separation, so you live in the same house on the date of marriage as the date of separation, you don’t get a date of marriage deduction. So that’s important because let’s say, and let’s take the RSP example again. So you have an RSP of $100,000 and it’s increased to $300,000 on the date of separation. So it’s gone up by $200,000. But let’s say you had a house and the equity was $100,000 and it went up to $300,000. You’re sharing the $300,000, not the $200,000.
Host: So if you have a house, you bring a house to the marriage, you’re essentially at that point, when you get married, you’re giving half the house to your spouse.
Host: Basically. I mean that’s really what it is, right?
Lorne: Yeah, and that’s why—
Host: Should that be reflected in the vows I wonder, somewhere?
Lorne: Well people don’t realize it. And some people do.
Host: I hereby give you half my house since I brought the house into the marriage, right?
Lorne: Well some people, it’s very hard to think about bad things when you’re getting married. You’re being optimistic and you’re trying to think about the future together. It’s going to be wonderful and so on. No one’s thinking about the downside that you split. Some people do and that’s when I get a call for a marriage contract.
Host: Of course.
Lorne: And those are people who are smart and they’re thinking ahead and they’re saying look, I’m bringing in a house into this relationship. I want to protect this house and I want to make sure that if I separate, I can take all that money out. Or if I’m going to split, I’m only going to divide the increase in the value. You can be very creative. You can do whatever you want to do in a marriage contract.
Host: You can do that easily if you have that prenup. You can contract the spouse out of that original entitlement under the Family Law.
Lorne: Absolutely. You can contract out of the Family Law Act dealing with any property issues. So you can say if I split, this house is mine. It’s not yours. If I split, you’ll get 10% of the house.
Host: I don’t think you’d want to bring that up during the toasts at the—
Lorne: Well it’s very important as well that if you’re going to have a marriage contract, that you do it well before the marriage.
Host: Well before. Night before.
Lorne: You can’t say the night before, I’m not marrying you unless you sign this.
Host: But it’s interesting, you can find yourself disentitled on some of the things that are in the Family Law Act if that prenup is in effect.
Lorne: If it’s valid. That’s why it’s important to do it properly, to have a lawyer, to do it well in advance, independent legal advice. Everybody has lawyers, financial disclosure, everybody tells each other. It would be effective.
Host: All that lovely music brings us back to Lorne Fine here on Goldhawk Fights Back for You where we are inviting your questions about issues that may arise in terms of family law in Ontario and divorce law. It’s really the same thing, I guess, isn’t it? It’s all contained in that one piece of legislation? Or do you call upon different pieces?
Lorne: Well there’s the Family Law Act that deals with property issues and custody access issues and so on. The Divorce Act that deals with getting a divorce and it also deals with custody access issues or it deals, sorry, with support issues.
Host: There are those two pieces of legislation.
Lorne: Mainly those legislations. There’s the Children’s Law Reform Act. There’s different legislation, but those are the main pieces of legislation.
Host: Okay. All right, here are the numbers if you have a question for Lorne Fine: 401-636-00740 or 866-740-4740. Ed’s on the line from Toronto. Ed, what’s your question?
Ed: It’s a question and a comment. I think I mentioned to you before it should be harder to get married a long time ago when you once went onto this subject—
Host: Yeah, maybe you did.
Ed: That way with education, like many of the things that Lorne has mentioned, would be cleared up ahead of time, eh?
Lorne: I think people have said that more than once.
Ed: I agree with him at the final comments between you two that maybe they need to have a contract before they get married so it’s spelled out clearly what’s involved in it, the home/house divided, just so if someone’s brought a home into the marriage they know that that’s excluded so there’s no false expectations then. That’s the false expectations he was talking about and all that.
You may find that by doing things like a contract rather than a lot of people thinking that will sour the relationship in the long run, actually that will strengthen it. It’d be interesting to know, common law marriages, if they survive without any strings attached better when those property issues don’t show up. It’s what you contributed and things like that into a marriage and that sort of thing are excluded, eh? I wonder if they ever did a survey how that would come out. Because people might work harder at staying together and not being so flippant, if you want.
Host: I don’t know what you’re driving at. You mean stayed together if they lived common law?
Ed: If they knew exactly, with everything spelled out, like in a contract.
Host: Oh, I see what you mean.
Ed: Like Lorne was saying at the end, which is kind of a good idea if you do that in advance. I agree with him. Then you don’t have the false expectations. You know you only get out of something what you put into it whether it be your feelings, your work, or whatever.
Host: Yeah, that’s for sure.
Ed: That’s why you need education ahead of time. And a contract sounds like a very good idea.
Host: Ed, okay, let Lorne get a word in. Ed? Let Lorne get a word in. Go ahead.
Lorne: I actually teach a course at the Institute of Law Clerks at Ontario for family and divorce law. A lot of people that take the course, there’s law clerks and there’s also individuals that have gone through a separation. It’s unanimous that they all say I wish I would’ve had this course before I got married. I wish I would’ve known about these issues.
Lorne: Oh, yeah. So maybe a good idea is to have a mandatory course before people get married for a few hours just so people know their rights and obligations.
Ed: Exactly. I agree with you 100%.
Host: Yeah, that makes sense. Ed, thanks very much for your call. That does make, but there’s no provision for that in the law or anything.
Host: I mean you can meet somebody at 4 o’clock and marry them at 5:00.
Lorne: You sure can. That’s love.
Host: This is not necessarily a recommended path to follow, and Ed brings up the old saying that if it were harder to get married maybe fewer people would try it. Right now it’s much harder, of course—
Lorne: To get divorced.
Host: To get dissolved. To have the marriage dissolved.
Lorne: Information is key and it’s unfortunate that people don’t have the information and a lot of people go in blind into a marriage.
Host: Are you getting the impression, you may not have these figures right at hand, but are you getting the impression that fewer people on a per capita basis are actually getting married these days? Maybe they’re living common law or whatever?
Lorne: I don’t have, right, I don’t have the statistics, but common law is more and more common. You see it. It really is. Less people are getting married. It just seems that way. It’s certainly as compared to ten or 15 years ago, you’re seeing much more common law couples separating than married couples.
Host: And is there a negative side to that in your mind having seen both? Having seen people who are dissolving a common law partnership and dissolving a marriage? Is there a downside if fewer and fewer people are actually officially getting married?
Lorne: Well I think that when it comes to separating, the law has to change as far as giving some rules dealing with dividing property for common law couples because it’s really up in the air. It’s very hard to tell a common law spouse this is what you’re entitled to or this is how things are going to work out. So there has to be some type of change in the legislation dealing with division of property for common law couples. So if you’re a married spouse, it’s much easier for a lawyer to tell you well this is how I think property is going to work out.
Host: Because it’s spelled out. You know.
Lorne: There’s rules.
Host: Yeah, there are rules.
Lorne: It’s just valuation questions and doing the calculations. But for common law it’s very difficult. You can have situations where a common law couple have lived together for many years and then they split up and one spouse may not be entitled to very much property.
Host: Now I can see in a common law relationship where a spouse might find himself or herself highly disadvantaged after the split, right?
Lorne: Right, right.
Host: More so than with a marriage where at least there are some rules that are laid down that you’re going to try to have enforced.
Lorne: Right. There’s a few Supreme Court of Canada decisions dealing with a break-up of common law couples dealing with property issues. The facts are basically they’re a farm couple, they’re living on a farm, they’re common law, they’ve been together for many, many years. All of a sudden this farmer’s worth millions and millions of dollars and the husband, or the male common law partner, says see you later. And leaves the common law spouse, the wife, without anything. So it went all the way to the Supreme Court and the Supreme Court had to work out all these rules dealing with division of property for common law couples. It’s very difficult.
Host: 12:50. Goldhawk Fights Back for You on Zoomer Radio. Let’s go to the phones and here is Erica from Ajax. Erica, your thoughts on love and marriage?
Erica: Good afternoon.
Erica: Well, kudos to all of us who’ve been married at least 25 years or more.
Host: Okay, fair enough.
Erica: My husband and I, before we got married, we dated for 10 years. And my in-laws with three of their other couple friends took us out for dinner and there was each of the couples had been married minimum 40 years. So we asked every one of those couples, what was the secret to a long marriage? The one that’s always stuck out in our mind is remember each other’s passions and let everything else slide. Respect is also in there too.
My husband being the hobby guy and the toys and planes and trains guy. I was the country queen of crafting. So he let me do my passion. I let him do his passion. He’s a numbers guy and I’m in healthcare. So we’re totally apart from each other, but those are the things. That was the one thing that stuck out with both of us is the passion that each of us has for something in our own personal lives. They went with us into the marriage.
Host: And recognizing that each of you, even though you may be married, each of you has your own life to live.
Lorne: And respect.
Erica: I don’t know what the secrets are, but it’s not an easy haul and you have to have communication. That was the second thing that Lorne Fine said. You’ve got to have communication because I think that will enable you to carry on through all those other areas that could possibly lead to divorce.
Host: I have one to ask you about, what about sense of humor?
Erica: Oh my husband has if not the worst, the best sense of humor and my daughter has picked up on it. The two of them together, the bits with each other, and it’s just nuts sometimes. Like you wouldn’t think.
Host: What about your sense of humor? You’ve got to have one too.
Erica: Well I put up with the sense of humor. Mine’s not as dry as theirs. He’s a Monty Python type sense of humor if you get my drift.
Host: I get your drift, thanks. Erica, thanks very much. I think sense of humor in a lot of relationships, whether it’s marriage, common law, or just a friendship, sense of humor is a pretty good thing to have.
Lorne: It’s key. Sense of humor, respect is very important. She respects her spouse and her spouse respects her.
Host: Because life is basically when you get right down to it even with its challenges and its difficulty, life is kind of funny, isn’t it?
Lorne: It should be funny. You have to find the humor in everything, right? And you have to appreciate your life. You have to appreciate those around you and it’s always good to laugh.
Host: Okay, here’s Vi on the line from St. Katherine’s. Vi, your question please for Lorne Fine.
Vi: Well I have two or several. My question is, going through divorce court and there’s a firm involved, should the gentleman get nothing, nothing and I think he had to pay money as well, $100,000 or something, now I could be wrong here, but does that sound right to you?
Lorne: I’m not really sure what the question is.
Host: I don’t think we’re following you, Vi.
Vi: Okay. When you go through divorce court and the couple has a farm, there’s a farm involved.
Host: A firm or a farm?
Vi: Farm, F-A-R-M, farm.
Host: Farm, okay, right, okay.
Vi: Should she get everything, the farm plus a cash settlement, and I’ll go on then. And should a man have to work when he feels that all he’s working for is child support. He pays the income tax on the child support and then his own income tax and everything. He feels he’s working just for those reasons and in fact he’s been advised to go on welfare. This is a professional man.
Host: Okay, but those are really two different things. You’re first asking about what the wife getting the farm and everything and the husband winds up with zilch, nothing?
Lorne: Okay, well that’s wrong. That doesn’t seem right.
Host: Doesn’t sound right, does it?
Lorne: Doesn’t sound right. I’m sure there’s more to this than what you’re saying.
Host: You’re speaking of someone you know?
Vi: It’s someone I know, yes.
Lorne: So it sounds to me like you’re saying they own a farm and that the husband had to pay $100,000 to the wife. And as we said before, the goal of the Family Law Act is to equalize their net family property so they both walk away with the same amount of money at the end of the day. Obviously it’s not that one spouse gets everything and one spouse gets nothing. That’s not what the act does. So something seems wrong.
Vi: Okay. But they want, I think the lawyers in Toronto want a $30,000 down payment to, what do you call this? What am I thinking?
Host: A retainer?
Vi: No. Yes. But to take it—
Host: Hang on, Vi, we need a little more information here. We’re kind of off in the weeds. Has this taken place already?
Vi: It has taken place.
Host: The divorce has been finalized.
Vi: Yes. Everything wasn’t equalized out as far as I know.
Host: Let me just try to guide you a bit. The other question was he is still paying child support? Is that what you were saying?
Vi: Oh yes. That’s costing him, they pay the income tax on the child support as well.
Host: Yeah, well it’s income, yeah.
Lorne: Well let’s stop you there for a second. So child support is based on the payer’s line 150 income, or the gross income before taxes. So there’s a whole chart that sets out how much support you would pay based on your income and how many kids there are. So again, it’s a chart that’s calculated so that the amount paid is reasonable. There’s no reason for the payer to go on welfare. That makes no sense to me. Unless maybe he’s self-employed and a court imputed income to him and he says I can’t afford how much income you’ve imputed to me. Still, doesn’t make sense for him to go on welfare.
Vi: Okay. This is his accountant. And he worked overtime to try to pay off some of his bills and he said you know what, you’re just defeating your purpose because you can’t win in this case.
Host: Oh I see. So he’s getting advice to just give it up and go on welfare and then you don’t have to worry about paying support. I mean you’ve heard that story before.
Lorne: I’ve heard it many times.
Host: That kind of thing happens, right?
Lorne: Well the answer is, if you go on welfare, a judge is going to say no you can’t. If you leave your job and you quit and you’re saying the support is too much and I’m going on welfare, a judge is going to say you know what? You still have to pay support based on what you could be earning. A judge could impute income to you and you would still pay support based on that income. So going on welfare is not the solution.
Host: Vi, I am totally out of time, but thank you very much. That’s a very complicated one, but it sounds like something went off the rails there.
Lorne: Yeah, that sucks.
Host: That essentially is not how it’s supposed to work if those in fact are the exact.
Lorne: We’re not getting the whole story there. Something’s missing.
Host: No, because supposedly it would work out to each other’s mutual benefit a little more than that.
Lorne: Yeah, this is too lopsided. It seems something’s wrong.
Host: You don’t see that many cases where it’s a zero sum game. One side loses, the other side wins.
Lorne: Right, that’s not what happens.
Host: Yeah. Lorne, thanks very much for answering all our questions and taking—
Lorne: It’s been my pleasure. I can’t believe it’s been an hour already. I can’t believe it’s been so long. It’s very complicated. Listeners can go on my website, torontodivorcelaw.com and get information. Thanks very much.
Host: Okay. All right. Lorne, thanks very much for coming in. That’s Lorne Fine our resident family law expert and divorce lawyer.
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