Division of Property

In Ontario, the division of property is governed by the Family Law Act, which outlines the rules and principles for the equalization of net family property upon the breakdown of a marriage or common-law relationship. Here’s an overview of how property division works in Ontario:

Equalization of Net Family Property

Valuation Date

The valuation date is a crucial point in determining the equalization payment. It is typically the date of separation, but it can also be another agreed-upon date or the date of divorce.

Calculation of Net Family Property (NFP)

Both spouses are required to calculate their Net Family Property, which involves subtracting their debts from the value of their assets as of the valuation date.

Equalization Payment

The spouse with the higher NFP is obligated to make an equalization payment to the other spouse to ensure that both end up with an equal share of the accumulated wealth during the marriage or cohabitation.

Exemptions from Equalization

Certain assets may be exempt from the equalization calculation, such as gifts or inheritances received during the marriage (with specific conditions), as well as assets owned on the valuation date.

Property Considered in Equalization

Assets

Assets include real property (homes, land), personal property (vehicles, furniture), bank accounts, investments, and any other items of value.

Pensions and Retirement Savings

Pensions and other retirement savings are also considered as part of the equalization process. The valuation may be complex, and specialized advice may be needed.

Debts

Debts, including mortgages, loans, and credit card balances, are subtracted from the value of assets to determine the Net Family Property.

Special Considerations

The matrimonial home holds a special status in Ontario family law. While it is considered in the equalization process, the spouse who remains in the matrimonial home may have certain rights, including the right to possession and an eventual equalization payment.

Excluded Property

Gifts and Inheritances

Gifts and inheritances received by a spouse are generally excluded from the equalization calculation, provided they are not mixed with other marital property.

Property Owned Before Marriage

Property owned by a spouse before the marriage or acquired after separation may be excluded from the equalization calculation.

Legal Advice :

Seeking legal advice is crucial for individuals navigating property division in Ontario. Family law lawyers can provide guidance on the specific rules, exemptions, and considerations that apply to individual cases.

Mediation and negotiation are common methods for resolving property division issues. If an agreement cannot be reached, court intervention may be necessary.

This information provides a general overview, and family law matters can be complex. Individuals involved in property division issues in Ontario should seek professional legal advice to address their unique situations.