Division of Property for Unmarried Couples

Constructive Trust

When common law couples separate, the legislation in Parts I and II of the Family Law Act don’t apply to them. These parts of the legislation only apply to spouses, which means that the people actually have to be legally married.

Nevertheless, it has been acknowledged that in cases where there has been a relationship of some length, a common law spouse may have some right to a share of the property not otherwise in their name. In order to do this, the partner seeking a share of the property has to make a trust claim with a view of obtaining a joint family venture remedy.

While a claim can be made for a part of the value held by the other partner, the courts will not equalize property between the two, and divide the value of the property equally between the partners. Contributions may entitle a person to a part, but not every contribution entitles the person making the claim to 50% of the value. In some cases, rather than being a percent of the value that is awarded, the court will decide on a specific sum that should be paid to the person.

A resulting trust is created when it is found that the parties had a common intention (express or implied) that one party would hold property in trust for the other. There is a presumption of resulting trust in family law, in that if one spouse purchases property in the name of the other, it is intended that the title holder is keeping the property in trust for the spouse that paid the money.

In order to rebut this presumption, the party wishing that the property not be held in trust must show that the property was a gift to them. If this is found to be so, it rebuts both resulting trust claims and constructive trust claims as set out above. In some situations, spouses “gift” property to one another to avoid creditors. While the law is not completely firm on this point, the general attitude is that if this can be shown, one cannot designate something as a gift when it is profitable, and later try and claim that this was not a gift because it is now better for it not to be a gift.

Generally, trust claims can be complicated and detailed claims to make. You are strongly advised to consult a lawyer if you believe you might have a claim under resulting or constructive trust.

Please feel free to contact us at info@jnmlaw.com or call 647-660-9832