When it comes to divorce, division of property can be the source of significant disagreement. A family law lawyer can help ensure that your matrimonial property is divided fairly and you get what you are entitled to.
How is Property Divided after a Divorce in Ontario?
In the eyes of Ontario family law, a marriage is an equal economic partnership. According to Family Law Act, when a couple divorces, all property that was acquired over the course of the marriage is considered equally owned by both parties. Generally, each party is entitled to one half of the value of the accumulated property, minus liabilities such as debt. In other words, wealth is defined as the difference between the couple’s net worth at the time of divorce and their net worth at the time of marriage. This is called “net family property”.
In the legal sense, the following are some examples of what is determined as “property”: homes, vehicles, and household and personal items, as well as all financial assets such as bank accounts, investments, pensions, stock options, and businesses.
It’s important to note, that although many family law issues treat marriage and common law relationships the same, the laws involving property rights are treated differently. The division of property only applies to legally married couples getting divorced. Thus, common law relationships are excluded from the legal division of property and abide by their property laws..
Division of property can be negotiated within your separation agreement. You can divide your property through negotiation, collaborative law or mediation, rather than a court order.
Is there Any Property that is Excluded?
Yes. “Excluded property” is defined in the Family Law Act as:
- Property inherited during your marriage
- Insurance payments paid to you as a result of a death
- A cash settlement as a result of a personal injury
- Gifts received from someone other than your partner
As all of these examples are of what may be excluded the division of property.
How Do Equalization Payments Work?
In divorce, each party keeps their own property. The value of any property and wealth acquired during a marriage must be divided 50/50. In some cases, an “equalization payment” can be ordered by the court to equalize each party’s share of the net family property. An equalization payment is usually paid in money, although it can also be paid by other means if agreed to in your separation agreement.
Generally, equalization payment claims can be made up to six years after a separation or two years after a divorce is granted.
Does This Include the Matrimonial Home?
The matrimonial home is treated differently from all other property when calculating the net family property. As the matrimonial home is often the most valuable property a couple owns, it can play a huge role in just how large the equalization payment will be and how the separation agreement will be negotiated.
Get the Experience You Need
The division of property is one of the most complicated and confusing parts of any divorce. With Ms. Shinehoft’s experience and training in collaborative law, you may be able to negotiate an agreement for property division in a separation agreement prior to the divorce. In all areas of divorce law, from child custody issues, to marriage contracts, to spousal support, Elinor Shinehoft is the family law lawyer you can count on. Call Shinehoft Law for an experienced divorce lawyer in Toronto today.