THE RISKS OF NOT DIVORCING WHEN A SEPARATION HAPPENS

Several clients passing by my office have been separated for a long time but never obtained a divorce. Without judging the reasons which could motivate someone to stay simply separated without having a divorce judgment, even when there is a new relationship, here are a few good reasons to divorce without too much delay when the separation is final, courtesy of a notary who has seen several complications caused by the absence of a divorce judgment :

Because you might not be able the buy your dream property with your new lover

You are separated since a couple of years. You are now living with a new person. You have finally found your dream condo or house, which you want to purchase together with this new person in your life. But: your have never divorced from your ex , whom you have married when you were both domiciled in a foreign country where the default matrimonial regime is a community as to property. You did not sign either a marriage contract (“prenup”). Your ex still lives in that country or maybe he lives in the province of Québec but you have absolutely no contact with him anymore. You might even ignore where your ex lives.

Bad news : you will not be able to buy this dream condo or house with your new lover. The house / condo will probably be registered only under the name of your new lover. Why? Because your ex would automatically own a part of the condo / house if your name is registered on title. If you have to take a mortgage in order to finance the purchase of the condo / house (as the vast majority), your ex will have to sign the deed of hypothec with Bank. His signature will also be required for any subsequent transaction on the house / condo : renewal of the mortgage, sale, etc.

Because you don’t want your ex to automatically own half of your assets

So, you are still married with your ex under a regime of community as to property under the old rules of the Code civil du Bas Canada or under the laws of a foreign country. Several countries still have legal rules having for consequence that the spouse, simply because they are married together, share the ownership of their assets. Sometimes, it will be a universal community as to property, in which case all the assets of the spouses are shared, without any exception. For example, without any contrary choice by the spouses, people married in Rwanda are under a regime of universal community as to property. Sometimes, i twill be a reduced community as to property, in which case some assets will not be shared (the assets acquired from the estate of a parent or those given by a parent for example). Reduced community as to property can be found in some countries from East Europe such as Romania and Bulgaria.

Consequences? Your ex automatically becomes the owner of 50% of the assets you own, unless exceptions apply. If you finally decide to divorce, you should not forget to ask for your ex to cede you all of his rights in the assets you acquired after the separation. You should also ask in the process of the divorce that any partition be made at the date of separation (not at the date of the divorce). And if you pass without having obtained your divorced, half of your assets might go to your ex even if you have left everything to someone else in your will.

Because you don’t want to share with your ex the value of your assets acquired after the separation

You still are married with your ex but you are not married under such a community as to property. You may be married under the laws of the Province of Québec (partnership of acquests) or you have executed a marriage contract (prenup) establishing that your ex and yourself are separated as to property (each one keep his/her own assets).

You are lucky! The value of only some of your assets will be shared with your ex.

In both cases (partnership of acquests and separation as to property), the family patrimony will is applicable. Which means that the value of the family residences, vehicles and RRSPs will be shared with your ex. Your ex is entitled to half the value of such assets you may own if you pass or if you finally decide to ask for a divorce, subject to certain deductions. As the time pass by, the value of those assets will increase and the amount payable to your ex may be important. Once again, it may be important to ask for the partition in the divorce proceedings to be calculated as of the date of the separation instead of the date of the divorce. Let’s just hope that there will not be a conflict with regards to the separation date! See for example http://citoyens.soquij.qc.ca/php/decision.php?ID=49EC1C5D3ADEBFD4C91823B53311A8BC&page=1 (in french) where Madame obtained the partition of the value of the country house acquired by her ex-husband bought it after the separation.

In the case of the partnership of acquests, a partition of the value of all the assets acquired during the marriage with the proceeds of your work shall also be done.  The money in your bank account might be shared !

In all those cases, your ex will have the possibility to renounce to the partition if you pass or when you’ll divorce. Will he ?

Because you don’t want your ex to inherit from you

You pass without misfortunately obtained your divorce. There are strong possibilities that your ex will inherit from your assets or a part of them, even if your last wishes were to a contrary effect!

If you have made a last will and testament by which you were leaving all your assets to your ex and had never modified it before your death, your ex will get your assets as mentioned in the last will and testament. The separation in itself does not cancel the last will and testament.  The divorce judgment does. Once the divorce is final, all the legacies and bequests made in favour of your ex in your last will and testament are automatically cancelled, as well as his appointment as liquidator (executor) of your estate.

If you did not signed a last will and testament, your ex will inherit from only a part of your assets. He’ll get a third of your assets if he inherits with your children, or two thirds if he inherits with your parents and siblings. Obviously, your new lover (common law partner) will get nothing.

Once again, your ex will be presented with the possibility to renounce to your estate. Will he?

Because you don’t want your new lover to settle your estate with your ex

You have the misfortune to pass without having divorced and you have minor children, either from your marriage or from your new relationship. Moreover, you were the co-owner of your house with your new relationship.

You did not take the precaution of making your last will and testament. Accordinlgy, your ex will get a third of your share of the house and your minor children will get the two thirds of your share of the house. Your new spouse will then be forced to settle your estate together with your ex. They will have to appoint together a liquidator (executor) of your estate or, if they can’t agree, ask the court to appoint one. Your new spouse will probably have to buy from your ex his share of the house, which house you had however bought with your new spouse with the possible intention to raise your children there, or at least with the intention to let him stay there to raise your children if something would happen to you.

You were cautious and made a last will and testament by which you left everything to your new spouse and to your minor children. You also appointed your new spouse as the liquidator of your estate. However, he will still have to settle the family patrimony and the partnership of acquests with your ex. Your new spouse may be forced to pay important amounts to your ex before inheriting himself and before your children could inherit from you. Moreover, if one of your minor children is born from your marriage with your ex, it’s him who will represent him in your estate.

Because you don’t want to have to pay the debts of your ex after his/her decease

You have been separated for several years from your ex when he pass without having made a last will and testament or without having changed his last will and testament by which he left you all his assets. To make things worse, your ex had financial or health difficulties or a gambling problem which put him in a very difficult position. He has more debts than assets. Maybe he cashed all his RRSPs in order to satisfy his basic needs.

On your end, you have no intention to assume the debts of your ex. You wish to renounce to his estate and get rid of those problems. You may indeed renounce to the estate of your ex and remit the file to Revenu Québec, direction of the unclaim property. One of the first verificationns Revenu Québec will make after receiving the file will be to make sure the partition of the family patrimony and of the partnership of acquests (or other matrimonial regime) is done. Revenu Québec will force you to disclose all of the assets you own which are part of the family patrimony and the matrimonial regime (family residences, vehicles, RRSPs, etc.). You should make sure BEFORE renouncing to the estate of your ex that you do not owe him / his estate any amount for the partition of the family patrimony and matrimonial regime. If so, then you might prefer to settle the estate of your ex yourself and pay his debts after all.

Conclusion

The fact of not divorcing presents several disadvantages on a legal and a financial point of view, which may complicate your life or the life of those you leave behind.

If you decide after all not to divorce after your separation, your notary can help your to minimize the consequences of your choice by drafting your last will and testament or by preparing a marriage contract to establish a separation as to property between your ex and yourself. It is question of a minimization of the disadvantages, not a total cancellation of them.

Final reminder : a divorce judgment is final or valid only after the expiration of a 30 days delay. Don’t wait to be too old. Imagine if your ex passes only a few days after the divorce judgment… Yes, this happens in real life !

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