If you and your spouse have decided to go separate ways, you will need to divide the value of any property you acquired while married. This can be a complex and challenging process that might require recourse to the courts.
A Toronto property division lawyer could explain your rights, outline the legal process, and help you negotiate a property division agreement. A skilled local family lawyer at our firm could be available around the clock to help you work through the difficult issues that come up when you divide property at the end of a marriage.
If you are a legally married couple, the Ontario Family Law Act §5 defines how you will divide your property with your spouse. Although the law sets forth a relatively simple formula, applying the formula can get messy. Engaging a thorough Toronto lawyer with experience in property division disputes is wise.
Ontario law holds that spouses must equally divide the “profits” of their marriage. The difference between a spouse’s net worth at the beginning of the marriage and their net worth on the separation date is the net family property (NFP). The person whose net worth increased the most owes an equalization payment to the other spouse. The equalization payment is one-half of the difference between their NFP and the other person’s NFP. When the equalization payment is made, each spouse will leave the marriage having increased their wealth by equal amounts.
For example, if Spouse A came into the marriage with a net worth of $50,000 and their net worth at the date of separation is $150,000, Spouse A’s NFP is $100,000.
If Spouse B’s net worth was $10,000 upon marriage and $100,000 when they separated, Spouse B’s NFP is $90,000. Spouse A’s net worth increased $10,000 more during the marriage than Spouse B’s did, so Spouse A must split the difference with Spouse B. Spouse A will make an equalization payment to Spouse B of $5,000.
Matrimonial homes get special treatment under Ontario property division rules. Any residence could be a matrimonial home if at least one spouse has an ownership interest in it and if it is currently occupied as a family home or was occupied as a family home at the time you separated. Under this definition, a vacation home or cottage could be a matrimonial home, and you could have multiple matrimonial homes. Special rules apply if the matrimonial home is a working farm or the site of a business. A seasoned Toronto asset division lawyer with knowledge of these issues could explain whether a specific property might be a matrimonial home under the statute.
If you bought the home together, the value at the date of separation is the number you each use to calculate your NFPs, not the increase in value. If one party owned the house that was used as the matrimonial home, its value at the time of separation is factored into that spouse’s NFP, which could greatly increase it and result in a higher equalization payment. The other spouse is entitled to half the value of the home at the time of separation, not half the equity or increase in value.
Even if one spouse owns the matrimonial home and the other has no ownership interest, the other spouse has an interest in the possession of the home. The owning spouse cannot mortgage or sell the home without the other spouse’s permission. If the spouse who is the children’s primary caretaker is not the owning spouse, a court might allow the non-owning spouse to remain in the home to minimize disruption for the children.
Although the concept that both spouses should equally share the financial benefits of their marriage upon separation sounds simple, putting the principle into practice can be complicated. A Toronto property division lawyer understands the issues that can arise and could provide valuable counsel.
Do not attempt to handle property division without the input of a seasoned legal professional. Reach out to our team with any questions or concerns about splitting property with your spouse.
Now you can have your Consultation with Paul Riley any time from the comfort of your own home. With video calls from Zoom, your Team at The Riley Divorce & Family Law Firm can meet with you virtually, and learn about your case. All you need is a smartphone, tablet, laptop, or desktop with a built-in camera and microphone.
Paul Riley Law Office