Personal Finance

Asset Division without Prenup

  • Last Updated:
  • Feb 18th, 2020 3:29 pm
Tags:
[OP]
Newbie
Feb 14, 2020
3 posts
2 upvotes

Asset Division without Prenup

Hi,

I'm dating my girlfriend for 2 years and I'm considering to propose to her in the near future.

We both have decent incomes but due to our age gap and family background, my current net worth is significantly higher.

In case of a divorce (without a prenup in place), how would the following assets get divided in Ontario?

1. Stock portfolio: worth 100k before marriage
2. Condo: acquired before marriage, not matrimonial home
3. Service business: existing 50% ownership in Inc.- assuming no salary or profit distribution during marriage
4. Future inheritance of a house (in Europe)
a, if inherited before marriage
a, if inherited and sold during marriage
b, if inherited and sold after divorce

I will get legal consultation to prepare a prenup, but would greatly appreciate some initial advise on how the asset division would look without a prenup.

Thanks a lot for your efforts.

Best,
Mitch
7 replies
[OP]
Newbie
Feb 14, 2020
3 posts
2 upvotes
Hi guys,

does anyone have some insights on how Ontario law handles the asset division?

Thanks for taking the time to share your knowledge.

Best,
Mitch
Deal Addict
User avatar
Mar 9, 2012
3010 posts
1706 upvotes
Kitchener
MitchV wrote: Hi,

I'm dating my girlfriend for 2 years and I'm considering to propose to her in the near future.

We both have decent incomes but due to our age gap and family background, my current net worth is significantly higher.

In case of a divorce (without a prenup in place), how would the following assets get divided in Ontario?

1. Stock portfolio: worth 100k before marriage
2. Condo: acquired before marriage, not matrimonial home
3. Service business: existing 50% ownership in Inc.- assuming no salary or profit distribution during marriage
4. Future inheritance of a house (in Europe)
a, if inherited before marriage
a, if inherited and sold during marriage
b, if inherited and sold after divorce

I will get legal consultation to prepare a prenup, but would greatly appreciate some initial advise on how the asset division would look without a prenup.

Thanks a lot for your efforts.

Best,
Mitch
1. Yours - I believe gains will be split 50/50 though.
2. It's split -- if marriage is short (less than 5 years) the rule of thumb is 1/60th of entitled amount for every month you're married. At 5 years, generally 50/50. Home is matrimonial as soon as your married and she moves in -- but the law protects you if the marriage is short. You obviously deduct mortgage from home value.
3. Need more details. Is she part of the business? Usually asset gains (your portion) would be split.
4. a) excluded
b) excluded
c) excluded
How can we fly like eagles, when we're governed by Turkeys?
[OP]
Newbie
Feb 14, 2020
3 posts
2 upvotes
@jeff1970 Thanks a lot. I sincerely appreciate your input. I am from Europe and the laws seems to be slightly different than here in Ontario.

No, she's not part of the business. Sharing capital gains on my 50% ownership makes sense though.

I was hoping that for the investment condo, only capital gains would need to be split in case of a divorce if we don't make it our matrimonial home (but jointly buy a house somewhere else).

@booblehead She doesn't have any assets but has a decent income as a Registered Nurse. I believe her pension might count as an asset though!?
Deal Addict
User avatar
Mar 9, 2012
3010 posts
1706 upvotes
Kitchener
MitchV wrote: @jeff1970 Thanks a lot. I sincerely appreciate your input. I am from Europe and the laws seems to be slightly different than here in Ontario.

No, she's not part of the business. Sharing capital gains on my 50% ownership makes sense though.

I was hoping that for the investment condo, only capital gains would need to be split in case of a divorce if we don't make it our matrimonial home (but jointly buy a house somewhere else).

@booblehead She doesn't have any assets but has a decent income as a Registered Nurse. I believe her pension might count as an asset though!?
If the condo is an investment, then it would only be capital gains (so likely you'd buy her out).

If you buy a home together, that home is automatically matrimonial 50/50.
How can we fly like eagles, when we're governed by Turkeys?
Deal Guru
User avatar
Mar 23, 2008
10334 posts
6606 upvotes
Edmonton
Not sure why you're getting "pre-legal" advise when you're going to talk to a lawyer that will have the complete picture, but...

AFAIK, if a property is inherited during the marriage, you have two options. You can keep it entirely separate from your "marital properties", in which case it would remain your property alone if a divorce was to happen. Or you could allow it to be "co-mingled" with marital property, and it's value would be used during a divorce equalization process. I believe that if it's sold during the marriage, unless you turn around and re-invest it fully into another solely owned property, it automatically become marital property.

https://lisagelman.com/blog/divorce-mean-inheritance/
https://www.separation.ca/help-centre/d ... ces-gifts/

C

Top