Family Patrimony & Matrimonial Regimes in Quebec
What Are the Impacts to Marriage?
In Québec, if you are married or in a civil union then your civil status is governed by the Civil Code of Québec. Specifically, you should be familiar with the rules that apply to your matrimonial regime and the family patrimony. It is worth noting that if any or both spouses were living outside Québec when they were married, then a different matrimonial regime may apply and will not be discussed in this article.
Couples in a common-law relationship do not have a regime. Each common-law partner manages their own property and if the relationship ends, their property is not divided. Common-law spouses can legalize their rights by entering into a cohabitation agreement setting out the rules that will govern their union and its termination. A cohabitation agreement only protects you in the event of separation. It is vital for both spouses to have a notarized Will, for protection in the event of death.
The Matrimonial regimes explained
If you do not have a notarized marriage contract or if your marriage contract does not specify a matrimonial regime, then your default matrimonial regime would depend on when you were married. The regimes are community of property if married before July 1, 1970 (not covered in this article) and partnership of acquests if married on or after July 1, 1970.
Partnership of Acquests
Under this regime, the patrimony is divided between private property and acquests.
Private property refers to the assets owned by each spouse at the time of their marriage or civil union, and property received by each during the marriage or civil union by either gift or succession.
Acquests are assets that are not private property and do not form part of the family patrimony. Most assets acquired by the spouses during the marriage or civil union are classified as acquests. Moreover, any increase or decrease in the value of private property during the marriage that was owned prior to marriage becomes part of the acquests.
In the event of divorce or death, each spouse retains their private property and can ask for a share of the value of the other spouse’s acquest assets. The debtor spouse can compensate the other spouse by making a cash payment or by transferring property in payment of the debt so that in the end the value of the acquest assets are equal for both spouses.
Separation as to Property
For this regime to be applicable, spouses must formalize a notarized marriage or civil union contract. Under this regime, each spouse is free to administer their own assets and each is solely responsible for their own personal debts. Upon termination of this regime (usually by divorce or death) each spouse retains the property they own.
The Family Patrimony Explained
The family patrimony came into effect on July 1, 1989 when the Act to amend the Québec Civil Code was passed into law with the goal of promoting economic equality between married couples and since 2002, between couples in a civil union. The result is that no matter what matrimonial regime is applicable to a couple, the value of certain categories of property used by the family is subject to partition in the event of legal separation, divorce, or the dissolution of a civil union.
The family patrimony consists of assets accumulated during the civil union or marriage and used by the family:
The family residence(s)
The furniture in the house(s)
Private pension plan benefit(s) accrued during the civil union or marriage
Registered retirement savings plan account(s)
Accumulated earnings from the Québec Pension Plan
Assets excluded from the family patrimony:
Property acquired by gift or an inheritance before or during the marriage or civil union
Property other than that listed above as family patrimony assets
The value of the family patrimony assets before the marriage or civil union
It is important to understand that each spouse holds the right to the property that belongs to them and that is included in the family patrimony. The separation of the family patrimony in most scenarios involves that one spouse owing money to the other. Essentially it is the value of the family patrimony that will be divided in equal shares between the spouses. At the time of partition, the debtor spouse can reimburse the other by making a cash payment or by transferring property in payment of the debt.
Next step: How does marriage impact your financial plan?
You are encouraged to consult with a financial planner to determine how your marriage may impact your finances under the different types of regimes. Financial planners would be able to examine your unique set of circumstances and apply their knowledge so that your overall financial plan remains on track.