I’d like to marry my boyfriend and once we marry we will live in the home that I currently own. My friend is divorced, and she told me that I could lose the house if my husband and I were to divorce. How can that be?
Matrimonial property rights are set out in Part 1 of the Ontario Family Law Act. Its a little complex, but I’ll try to explain it in a way most people can understand.
In simple terms, the legislation makes the spouses determine their net worth on the date of the marriage, and also their net worth on the valuation date (date they separated). Usually assets grow during marriage, so commonly the marriage date asset value is subtracted from the valuation date asset value. That will leave each spouse with a net family property value. The spouse with the greater net family property value pays the spouse with the lower one half of the difference. This is called equalization.
So that applies to most assets, but under the Family Law Act the spouses’ Matrimonial Home is treated differently. The practical effect of the legislation is that if one spouse brings the home into the marriage, and the spouses are living in it on the valuation date, then the house gets equalized regardless of the fact it was brought into the marriage by only one spouse. In other words, what your friend told you is not entirely without merit. Your better option would be to sell the house before marriage.