Divorce Law: 10 FAQS about property and debts for married couples in Ontario

It’s important to know how Ontario divorce laws apply to dividing marital debts and property. To help you with this, here are some of the most frequently asked questions:  

1. We’re married. Do we have to divide our property if we separate or divorce?

Yes. In Ontario, division of property acquired during a marriage must be split equally when a marriage ends for any reason.

This can include your:

• home
• car
• business
• furniture
• pension

However, there is property that is excluded from division:

• Property inherited by one spouse prior to the marriage
• Inheritance gained from a third party during marriage
• Gifts
• Property protected by prenuptial agreements

2. We’re married. Do we have to divide our debts if we separate or divorce?

That depends. The Family Law Act assigns you only the debts in your name in a separation or divorce. That means each person is individually liable only for the debts in his or her name alone. If you and your spouse share a debt, both parties will be jointly responsible for the debt after the dissolution of the marriage.

Debts may include:

• Money owed on credit cards
• The amount left to pay on your house (mortgage)
• A car loan

3. We’re married. What happens to my partner’s property if they die, and they have a  VALID will?

If your married partner had a valid will, you could choose to get either:

• What your partner left you in that will, or
• An equalization payment, the money one married partner pays to the other to divide the increase in the value of the couple’s property that happened during the marriage

4. We’re married. What happens to my partner’s property if they die, and their will is INVALID?

If your married partner’s will isn’t valid or if they didn’t make a will, you can choose to get either:

• Your share based on legal rules, called “intestacy rules”, that say who inherits property when there is no will
• An equalization payment: this payment is money one married partner pays to the other to divide the increase in the value of the couple’s property that happened during the marriage

5. We’re married. What if we agree on how to deal with our property and debts after we separate or divorce?

Then you can put what you’ve agreed to in a separation agreement. This is a written contract that you and your partner make.

Your separation agreement can deal with your assets and debts alone, or can include other things like spousal support, custody and access, and child support, decision-making responsibility, and parenting time.

6. We’re married. What if we CAN’T agree on what happens to our property and debts after we separate or divorce?

Then you have two options. You can ask a family law professional to help you resolve your issues. Or you can go to court and ask a judge to decide.

7. We’re married. What happens to our pensions if we separate or divorce?

Pension contributions are referred to as “credits.” When married couples separate or divorce, the credits the spouses have accumulated over the course of their marriage are divided equally between them in a process referred to as “credit splitting.”

If the spouses’ pension earnings during the marriage were equivalent, there will be no credits to split. But the greater the income disparity over the course of the marriage, and the longer the marriage, the greater the difference will be between their pension contributions during the marriage. The spouse with the greater contribution will then split his or her credits with the other spouse. If the pension is not in pay, the receiving spouse can wait until it is, or demand the cash equivalent.

For a private pension, you can apply to have the pension provider calculate the family law value. And your spouse must consent. Credit splitting is calculated separately than CPP.

8. We’re married. What happens to Canada Pension Plan (CPP) benefits if we separate or divorce?

CPP contributions you and your spouse made during the time you lived together can be equally divided after a divorce or separation – “credit splitting”. Credits can be split even if one spouse or common-law partner did not make contributions to the CPP.

9. We’re married. What happens to CPP benefits if one of us dies?

The CPP survivor’s pension is a monthly payment paid to the legal spouse or common-law partner of the deceased contributor.

To qualify for the survivor’s pension, you must:

• Be legally married to a deceased CPP contributor
• Be the common-law partner of a deceased CPP contributor

If you are still legally married, the surviving spouse could get a share of the benefits, but if the deceased spouse was living with someone else, his or her common-law partner would get the benefits.

10. We’re married. Who gets to stay in our home if we separate or divorce?

Both parties have an equal right to remain in the home, regardless of whose name is on the title. An equal right to the possession of the home and its contents means that a court can make temporary orders for exclusive possession of the matrimonial home under the Family Law Act

Call us to learn more.

At Howard Nightingale Professional Corporation, we have the expertise to manage all of your separation or divorce issues in a comprehensive manner. And we provide the personal attention and dedicated focus of a small law firm. Please reach out to us to schedule an initial consultation at our Toronto office at 416-663-4423 or toll free at 1-877- 224-8225.

We’ll provide you with the support you need.