Recently, the Ontario Superior Court of Justice made a ruling which should be of significant interest to common-law couples. In particular, the ruling should be of interest to couples who wish to retain their own assets, in the event of separation. With common-law spouses, property is generally split with regards to ownership. This is a contrast to married couples, in which the prevailing notion is that everything will be split evenly.
In other words, unless a common-law couple wants to split assets evenly, they should make it a point to ensure their own assets are maintained as such.
One way to make certain that property remains in the proper hands involves what is known as a cohabitation agreement. The case of Chechui v. Nieman involved both a house and investment (the investment was worth approximately $1 million). The couple in question were engaged, but eventually parted ways. The ex-common-law-wife, who was also the applicant, insisted upon fifty-percent ownership of both. On the flipside of things, the ex-common-law-husband believed that the interest held by his wife was in both their home and the account in trust for himself.
The mother of the respondent made it a point to provide $1.7-million towards buying the home while the applicant gained a mortgage to cover the rest of the purchase price. Upon the passing of his mother a little while later, the husband paid down the remainder of the mortgage, while also opening up a joint account.
Once the evidence had been carefully considered, Judge Kenneth Hood went in favor of the wife. However, this was only in regards to the house. In regards to the investment account, Judge Hood chose to side with the husband.
Specific evidence that would serve to emphasize the origins of these assets went a long way towards helping Judge Hood make his decision. It was clear to the judge that the investment was not established as a gift, but as something that could be transferred to her in the event of his death. While it was clear that the husband had claim to the investment, it was also just as clear that the wife had claim to the home. It seems unlikely that this decision would be any different, if the couple in question had actually married prior to the split. Nonetheless, a story such as this puts considerable focus on the dangers of losing property and/or investments, if things are not clearly defined between a couple right from the start.
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