Division of Property
Division of Property can be accomplished by a negotiated agreement or by a court order.
Keep in mind that division of property is different for married spouses than for common-law spouses.
Property division for married spouses
In Ontario, for married spouses, the approach to property division is very much a mathematical formula. In theory, each party should walk away with an equal share of the growth in assets that accumulated between the date of marriage and the date of separation (equalization).
Determining the amount of equalization:
- Add up the net worth of each spouse.
- Subtract the lower amount from the higher to determine the difference in total net worth value.
- Divide this difference by two.
- This is the amount paid to the spouse with the lower net worth value to provide the equalization.
Whether the clients are negotiating a separation agreement or are involved in a family court proceeding, there are specific financial documents required to determine each party’s net worth. Howard Nightingale Professional Corporation helps our clients prepare their financial documents to accurately determine the issues of division of property and equalization.
Division of Property – Matrimonial Home
The matrimonial home is in a special category of its own for division of property which only applies to married couples. The value of the matrimonial home might or might not be divided between client and spouse, depending on several factors that existed during the marriage. You might have to share the value of the matrimonial home with your spouse even if you owned the matrimonial property before you were married and still hold sole title to the property.
Depending on your circumstances, the signing of a marriage agreement is one possible way of excluding the matrimonial home from the division of property. Please contact Howard Nightingale to discuss your concerns regarding the matrimonial home.
Property Claims for Non-married Spouses
Unless a common law couple (including unmarried same-sex partners) have signed a cohabitation agreement specifying how the parties will manage or divide their assets, there is no current legislation in Ontario that applies to the division of property for unmarried spouses, but this doesn’t preclude the possibility of such a division. For example, if the person leaving a common law relationship can clearly prove to the court that he or she contributed to the other party’s property or assets, the court might award a share of the asset(s) owned by the other party.
It is also important to understand that the client’s contribution to the other party’s assets may not necessarily be a financial contribution. For example, if you contributed to the maintenance or improvement of a residential property, you may have a claim for an interest in that property, based on the principals of fairness and the unjust enrichment of one party at the expense of the other.
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