Divorce is undeniably one of life’s most challenging experiences, and the complexity of property division can add an extra layer of stress. In Ontario, understanding the intricacies of property division is crucial for individuals seeking a fair and equitable dissolution of marriage.
Below, we shed some light on crucial aspects of property division that can significantly impact the outcome of your divorce.
The Legal Framework
In Ontario, the Family Law Act governs property division in a divorce. This Act follows the principle of equalization, meaning each spouse is entitled to an equal share of the accumulated net family property during the marriage.
Net family property is determined by subtracting the value of each spouse’s debts and liabilities from the value of their assets at the time of marriage and again at the time of separation. The difference in these two values constitutes the net family property.
The equalization process ensures both spouses leave the marriage with an equal share of the family’s accumulated wealth. Equalization doesn’t mean that each asset is split down the middle. Instead, it involves the spouse with the higher net family property making an equalization payment to the other spouse to achieve a balance.
Exclusions and Deductions
While equalization aims for fairness, specific exclusions and deductions are considered when calculating net family property. Some assets, such as gifts and inheritances received during the marriage, are generally excluded from the calculation. Debts brought into the union may also be deducted.
However, determining what is excluded or deducted can be complex, often requiring in-depth legal knowledge. Seeking the assistance of a divorce lawyer can ensure all relevant factors are considered, and a fair assessment is made.
The marital or matrimonial home holds a special status in property division cases. It is often one of the most significant assets and typically carries emotional significance. In Ontario, the value of the marital home is included in the equalization calculation, but there are specific considerations.
Unlike other assets, the value of the matrimonial home is never deducted from a spouse’s net family property as a date of marriage asset, even if the home was owned by that spouse on the date of marriage.
It must be noted though that the special status of a matrimonial home is attributed only to a home that was ordinarily occupied as a family residence at the separation. This means that homes that were previously occupied or the matrimonial home (for example a home where the parties lived when they were first married but has since been sold or is no longer occupied by the parties/family at the time of separation) will not be afforded any special treatment and their value may be deducted from a party’s net family property as a date of marriage asset.
In cases where both spouses jointly own the matrimonialhome, decisions regarding its disposition can be complex. Options may include selling the property and dividing the proceeds, one spouse buying out the other, or continuing to co-own the property for a certain period.
Resolving property division disputes through the court system can be time-consuming, costly, and emotionally draining. Fortunately, alternative dispute resolution methods, such as negotiation or mediation, provide couples with more amicable and cost efficient options for a resolution.
These alternative methods not only offer a more cooperative approach but also allow for more personalized and creative solutions. Alternative dispute resolution can be beneficial when dealing with unique assets or when preserving a working relationship is essential, especially if children are involved.
Let Our Vaughan Divorce Lawyers Help With Your Property Division Matters
Navigating the property division process in an Ontario divorce requires a thorough understanding of the legal framework, careful consideration of exclusions and deductions, and a commitment to achieving a fair and equitable resolution. While the law provides a guideline for equalization, the unique circumstances of each case warrant legal advice.
Are you in the process of a divorce in Vaughan, Ontario, and need help with property division? Speak with an experienced divorce lawyer at GDH Family Law today. Our team will ensure your rights are protected and you achieve a fair outcome in this challenging chapter of life.