Division of property for married couples is governed by the Family Law Act in Ontario. The property they individually acquired is theirs to keep.
Any property acquired by a spouse during the marriage and retained until separation needs to be equally divided between the spouses.
Spouses will also need to share the rise in the value of the property held by a spouse on the date of marriage. Equalization payment refers to the payment made by one spouse to another to balance out the sharing of property value amongst each other. It is also known as equalization of net family property.
Property includes any asset owned by a spouse such as:
- Any home or another real estate
- Car and any other vehicles
- All personal items including jewelry, books, coin collections, clothing and much more
- All household possessions and furnishings like furniture, appliances, and electronic equipment
- All financial assets including chequing and saving accounts, RRSPs, investments, insurance policies, pensions, and other financial assets
Few exceptions exist which are known as excluded property. Any gifts or inheritances received during the marriage from anyone other than the spouse comes under exclusions. It is prudent to note that these gifts should not have been applied towards the matrimonial home.
An equalization payment can be claimed up to 2 years after a divorce has taken place. This time limit is up to 6 years after the date of separation.
Couples in common-law relationships are not eligible for the automatic property sharing provisions. Equalization payments are not applicable to them. Trust claims are allowed for common-law spouses. These involve any payment from a spouse to the other to balance out direct or indirect contributions to the property they own.
The rules about property division in the Family Law Act do not apply unless you are legally married.
In a common-law relationship, any asset including property bought by any partner during the relationship and an increase in its value belongs to the partner alone. The automatic sharing of property and other assets clause does not apply here.
Any asset purchased during the duration of the relationship is jointly owned by both the spouses. On separation, its value will be equally divided. It is advisable to retain receipts, proof of purchase for all assets to enable easy division of assets later on.
A claim can be shared if any partner contributed to the other partner’s work or property. The court names this contribution as unjust enrichment and allows a claim if it is proved with sufficient cause.
A prenuptial agreement made before marriage between the two spouses will be enforced at separation and division of property will be done as per the terms outlined in the agreement.
A common law couple can prepare a Cohabitation Agreement and a married couple can prepare a marriage contract. These agreements outline the terms and conditions for dealing with debts, property and finances during the relationship and how to deal with them in event of separation.
The agreement will be legal and valid once the two spouses and witnesses sign it. Complete financial statement should be done prior to its drafting.
The court may not enforce the agreement or change it once it is evident that one spouse:
- Abstained from revealing their complete finances
- Did not understand the agreement, or
- Signed the agreement under pressure
How We Can Help
At Nanda & Associate Lawyers, our capable divorce lawyers help in making effective representation for the division of property. They understand your specific circumstances and provide tailored and customized solutions for each of them. Many legal complexities exist in formulating equalization payment claims; an experienced divorce lawyer can help you to navigate better in those complex situations.
Our Mississauga Divorce Lawyers are available for a consultation. Come and experience our quality legal counsel and personalized care we give to each client.