Beneficial Ownership and Family Property

The Court of Appeal in Schimelfenig v. Schimelfenig, outlines the difference between “legal ownership” and “beneficial ownership."

In Schimelfenig, the issue was whether the home was owned by the husband – which would then be subject to division with his wife, or if it was owned by his parents, as they had transferred title of the home to themselves and their son in joint tenancy.

The Trial Judge neglected to highlight the difference between legal ownership and beneficial ownership. He ruled that the husband did not own the home (and therefore the home was not subject to division of property between him and his wife) because there was an abundance of evidence that his parents did not intend to give the home to their son as a gift. The transfer of ownership was clearly intended for estate planning purposes.

On appeal, the Court disagreed with the Trial judge in terms of his reasoning, however, agreed that the husband was not entitled to a portion of the home.

Unlike the Trial Judge, the Court of Appeal held that the husband was the legal owner of the property as his name was on title. However, as the evidence clearly conveyed, because the husband did not have any beneficial interest in the property whatsoever, he could not claim any portion of the land. Therefore, the property was not to be subjected to division between the husband and his wife, as it did not fall under the realm of “family property.”

All in all, the case clearly portrays how beneficial ownership interests can affect a family property claim.

To learn more about Beneficial Ownership and Family Property as well as the services provided by Krol & Krol, call 905.707.3370 today.