Does a Prenup Protect the Matrimonial Home in Ontario?

If you bought your home before you married, it is natural to expect it to stay yours. Ontario law treats a matrimonial home differently from other property, and that surprises many owners. A prenup, formally called a marriage contract, can help, but it has limits.

This article explains why the home is special, how it is handled without a contract, and which parts a marriage contract can and cannot change.

What makes a home a matrimonial home

A property is a matrimonial home if you and your spouse ordinarily occupy it, or occupied it at separation, as your family residence. Both spouses have an equal right to possession of a matrimonial home, whoever owns it.

There is an exception when only one spouse has an interest in the home. In that case, the other spouse's right of possession is personal as against the owner, and it ends when they stop being spouses unless a separation agreement or court order says otherwise.

A spouse also may not dispose of or encumber an interest in a matrimonial home, for example by selling or mortgaging it, unless a listed condition is met, such as the other spouse's consent or a court order. A court may also order that one spouse be given exclusive possession of the matrimonial home.

How the home is treated when there is no contract

Ontario's default rule is that net family property is the value of what a spouse owns on the valuation date, except excluded property, after deducting debts and the value of property, other than a matrimonial home, owned on the date of marriage. The words other than a matrimonial home are the key. On divorce, nullity, or separation with no reasonable prospect of resuming cohabitation, the spouse with the lesser net family property is entitled to one-half of the difference.

Some property is excluded even without a contract, including gifts or inheritances from a third person received after marriage, other than a matrimonial home. For a matrimonial home that was owned before marriage, gifted or inherited, no date-of-marriage deduction or gift and inheritance exclusion applies, and Ontario's guidance says its full value must be shared unless the spouses agree otherwise.

The person claiming a deduction or exclusion has the onus of proving it.

What a marriage contract can do

Two people who are married or intend to marry may make a marriage contract, and a couple who are already married can make one too. It may deal with ownership or division of property, support, and other matters in the settlement of the couple's affairs.

For the home's value, the key rule is that property the spouses have agreed by a domestic contract is not to be included is excluded from net family property. That is how spouses can agree, for example, that a home owned before the marriage stays outside the equalization calculation. The wording of the clause matters, so it is worth having a lawyer review it.

If you only live together without marrying, Ontario's property-division rules do not require you to split property acquired while living together, and a cohabitation agreement can set your rights. If you later marry, a cohabitation agreement is deemed to be a marriage contract.

What a marriage contract cannot do

Any term that tries to limit a spouse's rights under Part II, the matrimonial home part of the Act, is unenforceable. That includes the equal right to possession of the home. So a clause saying your spouse has no right to live in the home during the marriage will not work, even if the home is yours alone.

• It cannot limit a spouse's Part II matrimonial home rights.
• It cannot decide decision-making responsibility or parenting time for children.
• It does not remove the court's power to set the contract aside on the section 56(4) grounds.

A contract is also unenforceable unless it is in writing, signed by the parties and witnessed.

What to do next

If you own a home and are thinking about marriage, or are already married, raise the home early with a lawyer. Ontario's government advises each partner to speak to a different lawyer and to exchange financial information before signing.

• Records showing when you bought the home and what you paid
• Proof of what you owned and owed on the date of marriage
• Mortgage and title documents
• Any existing marriage contract or cohabitation agreement
• A list of your questions about possession, sale and equalization

Frequently asked questions