In Ontario, a common concern during a separation is what happens to the family home. It is also complex to deal with other assets. Dividing property can be challenging, particularly when emotions run high and financial stakes are significant. Understanding your legal rights and obligations is crucial to navigating this process successfully.

The Family Property Division Framework in Ontario

Under Ontario’s Family Law Act, married couples are liable to the property equalization process. This involves calculating each spouse’s net worth at the time of separation. The goal is a fair division of assets.

For unmarried couples, the situation is different. There is no automatic right to property equalization. Instead, claims are made based on contributions to property. This can result in constructive or resulting trusts. Claims can also be made through agreements between the parties.

The Matrimonial Home

The family home, also known as the matrimonial home, holds special status under Ontario law.

Definition: The matrimonial home is any property. It was ordinarily used by the spouses as their family residence at the time of separation. There can be more than one matrimonial home, like a cottage or vacation property.

Special Protections: Both spouses have an equal right to live in the matrimonial home. This is true regardless of whose name is on the title. One spouse can’t sell or encumber the property without the other spouse’s consent or a court order.

Exclusion from Equalization: The value of the matrimonial home is fully included in the owner’s net worth. This rule applies even if the home was brought into the marriage. The entire value is liable to division, even if one spouse owned it before the marriage.

How Are Other Assets Divided?

The equalization process involves these steps:

Calculate Net Family Property (NFP): Each spouse’s assets at the date of separation are totaled, and debts are subtracted. Assets brought into the marriage are deducted, except for the matrimonial home.

Compare NFPs: The spouse with the higher NFP pays an equalization payment. This payment is made to the other spouse to equalize their net worth.

Common Types of Property to Be Divided

Financial Accounts: Bank accounts, investment portfolios, and registered retirement savings plans (RRSPs) are typically included.

Pensions: Pensions are considered property and are subject to division, often requiring a valuation.

Business Interests: If one or both spouses own a business, its value may be included in the equalization process.

Personal Property: Vehicles, furniture, jewelry, and other personal items may be included.

Debts: Debts, including mortgages, loans, and credit card balances, are also part of the property division.

Exclusions from Property Division

Some property is excluded from equalization, like:

Practical Tips for Dividing Property During Separation

Document Assets and Debts: Create a detailed list of all assets and debts at the date of separation.

Seek Valuations: Obtain professional valuations for significant assets such as real estate, pensions, and businesses.

Consider Mediation: Mediation can help spouses reach a fair and amicable agreement without resorting to litigation.

Consult a Family Law Lawyer: Legal advice is crucial to understand your rights and obligations. It is also important to protect your financial interests.

Final Thoughts

Dividing property during separation can be complex, particularly when the family home is involved. Knowing your legal rights and seeking professional advice are key to ensuring a fair outcome. If you are going through a separation in Ontario, you need guidance on property division. Consider consulting an experienced family law lawyer. They can help you navigate the process.