The family patrimony framework under the Civil Code of Quebec was designed to protect financially vulnerable spouses following the dissolution or breakdown of a marriage. The family patrimony governs which joint assets from a marriage should be divided. The provisions seek to ensure as best as possible financial equality between the parties with respect to family assets.
The rules of family patrimony are public order and as stipulated by article 423 C.C.Q., spouses may not, by way their of marriage contract or otherwise, renounce their rights in the family patrimony during the marriage. This provision sheds light on the legislator’s objective of “protecting the family patrimony rules, including the composition and value of the family patrimony itself, from any legal vehicule that would enable spouses to derogate therefrom”. In simpler terms, you cannot hide behind a corporate entity or any other legal entity such as a trust to get around the rules of family patrimony. This topic is addressed in a landmark decision from the Supreme Court, Yared v. Karam.
In Yared v. Karam, the question at hand was to determine if a family residence owned through a trust is included in the family patrimony under article 415 C.c.Q.. In this case, one of the spouses is a trustee with extensive powers. If that is the case, Mr. Karam would have been required to transfer half of the property’s value to his wife’s estate. The Court determined that whether or not the trust was created in good faith or in attempt to derogate from the rules of family patrimony is not central in answering the above question. The reason for this logic is because in Quebec law, there is a longstanding principle that you cannot do indirectly what cannot be done directly. The “rights which confer use” of a family residence detailed at article 415 C.c.Q require a liberal interpretation to uphold the legislator’s intentions. Otherwise, a spouse would be able to bypass the rules of family patrimony by using legal vehicles such as trusts to do indirectly what they cannot do directly. In Yared v. Karam, the majority thus determined that a family residence held in trust, where one spouse is a trustee with extensive powers, must be included in the family patrimony and thus subject to partition. The judge determined that Mr. Karam’s extensive powers established enough control over the residence to encompass “rights conferring use of the residence”.
Although this all might sound like complicated legal jargon, the takeaway from this landmark judgment is simple: it is crucial to understand that the main goal of the family patrimony provisions is to protect the more vulnerable spouses at all costs. In Quebec, ensuring equality following the dissolution of a marriage is of utmost importance to the Courts. Whether you decide to establish a trust in good faith or not, you will not be able to hold your home in this trust to shield yourself from the rules of the family patrimony. The rules are public order, there is no way around it!
 Yared v. Karam, Application for Leave to Appeal, 2018 QCCA 320, para 28.