Division of property

​In Ontario according to Part I of the Family Law Act, marriage creates a partnership involving equal sharing of property. Upon separation, the value of the property accumulated over the marriage gets split between spouses. This includes everything from pensions, savings, cottages and RRSP's. Debts  and property accumulated before the marriage (excluding the matrimonial home) are deducted from the total. It's important to understand that only the value of the property gets shared. There is flexibility when it comes to dividing property, as long as the result is an even split in terms of value.  
There is a 3-step process in determining your rights under the Family Property section of the Family Law Act: 
  1. The court must establish the net family property of each spouse. This means that the court must:(a) determine what "property" each spouse owned on valuation day, and (b) value that property after making deductions and allowing exemptions as provided in s. 4.
  2. The court must determine whether one spouse's net family property is less than that of the other. If so, s. 5(1) provides for equalization, which is effected by ordering a payment of one-half of the difference between them. However, before making that order, the court must proceed to the third step.
  3. The court must decide whether, because of the considerations contained in s. 5(6), it would be unconscionable to equalize the net family properties. If so, the court may make an award that is more or less than half the difference between the net family properties. If not, the net family properties are equalized as set out in step 2.
To summarize, both spouses will determine their Net Family Property and the spouse whose NFP is the lesser of the two is entitled to one-half of the difference between them. This is what is known as an equalization payment. The court can divide the money unequally if, for example, one spouse recklessly incurred debt, or recklessly spent money during the marriage.

If ownership in the matrimonial home is in one of the spouses' name only, and this property existed before the marriage, its value must still be included in the owner's Net Family Property.  This is because of the special significance that the Family Law Act gives to matrimonial homes.  Click here for more information about matrimonial homes.  

Every situation, including yours, is unique, and you should get legal advice before agreeing to any division of property arrangement.  Email me for more details: [email protected].