What happens in a divorce when the family home is registered in only one spouse’s name? Do both spouses get an equal share if they contributed equally to the purchase and maintenance of the home? In the recent Court of Appeal decision in Korman v Korman, 2015 ONCA 578, this very issue was considered.
In Korman, the husband and wife were married in 1988 and separated in 2009. They had two children. At the time of the separation, the couple lived in a house they had purchased in 2002 using funds from the sale of their first home, and funds gifted to them from their parents – $150,000 from the husband’s parents, $50,000 from the wife’s parents, and the couple’s joint savings. At the time of purchase, they had no mortgage. The title to the home was place entirely in the wife’s name.
At the trial, the wife stated that she and her husband had jointly decided to place title to the home in her name only to protect it from potential claims against the husband arising out of his employment as an investment advisor. The wife argued that since she was the sole registered owner of the home, she was entitled to the post-separation increase in its value. She accepted that the husband is entitled to The husband argued that he was entitled to an equal share in the value on the date of separation and in any post-separation increase in the property’s value because he had put the title in his wife’s name to protect it from potential creditors.
The trial judge found that the husband was entitled to share in the value of the home at the date of separation. However, “while he may have made further contributions to the running costs of the property after the date of separation, those contributions… would fall into the category of support payment belonging to the [wife]” [para 10]. However, the trial judge found that the husband was not entitled to a share in the post-separation increase in the value of the home.
The Court of Appeal disagreed and found that the trial judge’s decision was unstainable. The issue before the Court of Appeal was whether the husband intended to gift his interest in the house to the wife when they purchased the house in 2002. The Court of Appeal found that the wife failed to meet her burden at trial to prove that the husband was not the beneficial owner of half of the home. The wife never said that the husband gifted his interest in the home to her. She did testify, however, that although the home was put in her name to protect it from claims by creditors, the husband still had a full interest in the home. The Court of Appeal found the husband to be the beneficial owner of one half of the home whenever the value crystallizes.
The above summary does not cover all aspects of this lengthy decision and is not intended to be construed as comprehensive legal advice. To speak with an experienced family lawyer, please contact Jason P. Howie online or at 519.973.1500.
To read the full decision click here.