Division of property works differently for married and common-law couples in Ontario. Understanding the complexity of each process helps you set realistic expectations.
Married couples
Upon separation, both spouses will receive an equal share of property acquired during marriage unless they have a prenup that states otherwise. It involves calculating the net family property (NFP) of each spouse, which is essentially the value of all assets acquired during the marriage, minus any debts and liabilities. Each spouse keeps their own NFP, but the spouse with the higher NFP owes the other spouse half of the difference between their NFPs.
Common law couples
Common-law couples, on the other hand, do not have the same automatic right to property division under the Family Law Act. Instead, property remains with the person who legally owns it. However, if you funded your partner’s assets, you may take legal action for your shares.
How are assets divided?
Some assets like property owned before the marriage, heritances and gifts, personal injury settlements, and trusts established before marriage are protected during a divorce. Assets divided through equalization include:
Matrimonial Home
Regardless of whose name is on the title, this property is considered a joint asset if it was the couple’s primary residence during the marriage. It identifies that the home’s significance is beyond its financial value and has a big role in the family’s life.
Bank Accounts
All funds held in bank accounts, whether in joint names or in the name of one spouse including savings, chequing accounts, and term deposits are subject to an equitable share and must be disclosed during divorce proceedings.
Investments
Stocks, bonds, mutual funds, and crypto are all accounted for under this, which are evaluated according to the current market and not purchase price.
Pensions
While the biggest asset that’s divided, it is also complex and needs an actuarial evaluation.
Vehicles and Boats
Includes cars, motorcycles, boats, and other recreational vehicles regardless of who’s name it is registered under.
Business
Any business that was started before and during the marriage is divided equally and is appraised to value it appropriately.
Household items
Always divided equally among both spouses.
Insurance Policies
Any policies, especially those with a cash surrender value, are subject to division. It is first judged whether it was intended for the spouse or children.
If you have any questions about division of property, our family lawyers at Shuter Law can help you understand the impact it may have on the breakdown of your relationship. Please contact us to book your consultation.