Property
How does Property Division work?
In Ontario, property division in family law is governed by the Family Law Act (FLA), which provides a framework for the division of net family property between married spouses upon separation.
The equalization of net family properties does not apply to couples whom have cohabited but not married, however, there may be other property claims that may be advanced.
Under the FLA, the value of property acquired during the marriage is equalized, with some exceptions. This includes the value of all assets and liabilities, such as the family home, bank accounts, investments, pensions, and debts.
However, there are some exceptions to this rule. For example, property that was owned by one spouse before the marriage or acquired through inheritance during the marriage and can be traced to an asset that exists on date of separation or gift from a third party during the marriage that exists on date of separation are generally deducted or excluded from the equalization of net family property calculation.
Where to start
The first step in the process of equalization net family properties is to determine the date of separation, which is the date when the spouses began living separately and apart with no reasonable prospect of reconciliation. This date is used to value the assets and debts that are subject to equalization as well as the date of marriage. It is the increase in value of the assets and liabilities during this time that are ultimately equalized.
Once the value of the net family property is determined, the spouse with the higher net family property is required to pay an equalization payment to the other spouse to ensure that both spouses receive an equal share of value of their net family properties. The equalization payment is calculated by subtracting the lower net family property from the higher net family property and dividing the difference by two.
Did you know?
In some cases, the equal division of net family property may not be appropriate, such as when one party has recklessly depleted assets during the marriage or the parties have been married for less than five years.In these cases, the court may order an unequal division of property.
It is important to note that the property division process can be complex, and it is recommended that individuals seek the advice of a family law lawyer to ensure that their rights are protected and that they receive a fair share of the property. If you have questions about the division of property upon separation, our lawyers at Scharff Nyland Chambers are happy to discuss with you.
