When two people get married, they are naturally convinced that it will be for life, and don't necessarily think about the financial ramifications of saying the famous "I do."
Unfortunately, some marriages do end in divorce.
When our clients come to us during a separation or a divorce, some are surprised to learn that they must split their property with their spouse. Others wonder if their spouse is entitled to part of their shares in a company, their income properties, their pension fund or the investments they accrued during the marriage.
We therefore believe it is important for everyone to understand the financial implications of marriage and what it may entail in the event of a divorce.
The general principles that apply are outlined below.
The Family Patrimony
When two people divorce, the value of property included in the family patrimony is partitioned, regardless of whose name it is registered in, and generally, regardless of who has paid for it.
What is the family patrimony?
The family patrimony is made up of the following:
- the family's residences, including secondary residences used by the family, and the movable property with which they are furnished;
- the motor vehicles used for family travel;
- the pension plans and benefits accrued under the Act respecting the Québec Pension Plan or equivalent programs.1
However, some exceptions apply. The property in the family patrimony owned at the time of marriage could be eligible for a deduction in the partitionable value of that patrimony. In addition, property received by one of the spouses, either by succession or gift, before or during the marriage, is excluded from the family patrimony in the event of a divorce.
The family patrimony applies to all spouses domiciled in Quebec at the time of their separation, regardless of the matrimonial regime that applies to them, and spouses cannot renounce the creation of such patrimony in advance.
The Matrimonial Regime
The matrimonial regime establishes, among other things, how other property not included in the family patrimony is to be split in the event of a divorce.
Let's take a look at the different types of matrimonial regimes available to spouses in Quebec, which one applies to you and how you can choose a regime other than the default.
A. Types of Matrimonial Regimes
(i) The Matrimonial Regime of Partnership of Acquests
This regime provides for the partition of the acquests acquired during the marriage in the event of a divorce.
What are acquests?
Acquests are made up of the proceeds of your work during marriage, the property purchased with those proceeds, and the fruits and income generated during marriage by all your property, whether private or acquests.2
The following property is considered private and cannot be partitioned in the event of a divorce:
- property you already owned before marriage;
- property you received by succession or gift during the marriage, and the fruits and income derived from it if the testator or donor has so provided;
- property you acquired to replace private property and any insurance indemnity relating thereto;
- the rights or benefits devolved to you under a contract or plan of retirement, other annuity or insurance of persons;
- your clothing, personal papers, wedding ring, decorations and diplomas;
- the instruments required for your occupation, saving compensation where applicable.3
All property is deemed to be acquests. It will be up to the spouse who wants certain property to be classified as private to prove it in the event of a divorce.
(ii) The Matrimonial Regime of Separation as to Property
Spouses married under the matrimonial regime of separation as to property retain property registered in their own name if they divorce, except for property forming part of the family patrimony.
(iii) A Sui Generis Matrimonial Regime
Spouses may also choose a sui generis matrimonial regime, that is, a regime tailored to their particular needs and wishes regarding the partition of their property in the event of a divorce.
Thus, if they divorce, the spouses can choose to split only certain property.
B. Which Matrimonial Regime Applies to You?
By default, the matrimonial regime that applies in Quebec since July 1, 1970, is the partnership of acquests [see (i)].
This means that if you are both domiciled in Quebec and you marry without signing a marriage contract before a notary, the matrimonial regime that will apply to you is the matrimonial regime of partnership of acquests and your property will be partitioned with your spouse if you divorce, except for property that can be classified as private property, as described above.
C. How Can You Choose a Matrimonial Regime Other than the Default?
Spouses may choose a matrimonial regime other than the partnership of acquests by signing a marriage contract before a notary.
It is important to note that regardless of the matrimonial regime chosen, it is not possible, by marriage contract or otherwise, to renounce in advance the partition of the value of the property that will form part of the family patrimony at separation.
People sometimes have questions about the rules pertaining to family patrimony and the matrimonial regime. They tell us, for instance, that they did not know they had to split property not included in the family patrimony if they divorced.
We believe it is important for everyone to be informed of the basic rules pertaining to marriage.
Now that you have read this text, you will be aware that:
- the family patrimony applies to all spouses domiciled in Quebec and the property that forms part of i twill be partitioned in the event of a divorce, regardless of the applicable matrimonial regime;
- property that is not included in the family patrimony is treated according to the matrimonial regime that applies to the spouses.
It should be noted that marriage also gives rise to other rights, such as the right to spousal support or the right to a compensatory allowance, where warranted. These issues will be addressed in our next publications.
We hope that this publication has helped you understand what marriage entails with respect to the partition of your property in the event of a breakup.
1 Section 418 of the Civil Code of Québec
2 Section 449 of the Civil Code of Québec
3 Section 450 of the Civil Code of Québec
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.