Toronto Family Lawyers Representing Families in Division of Assets in Divorce
Division of assets in divorce is a pivotal part of separation and divorce, significantly impacting your financial future. Ensuring a fair and equitable division of property requires careful consideration and expert legal guidance. At Devry Smith Frank LLP (DSF), our experienced lawyers are dedicated to helping you address the details of property division in divorce. We aim to protect your interests, providing tailored legal strategies aimed at achieving the best possible results for your unique situation.
Key Assets and Properties in Divorce and Property Division
Identifying the different types of assets and properties involved in a divorce is essential. Marital assets typically include properties acquired during the marriage, such as real estate, investments, pensions, and business interests. Non-marital assets, on the other hand, refer to properties owned individually before the marriage or acquired through inheritance or gifts. Categorizing these assets accurately is crucial for a fair division. Our lawyers at DSF assist you in compiling a thorough inventory of all assets, ensuring nothing is overlooked in the division of assets in the divorce process.
Legal Framework and Principles in Common Law Division of Assets
When dividing assets in a common law relationship, the legal framework and principles guiding the division of assets in divorce are essential to achieving a fair outcome. Courts consider various factors, including the length of the relationship, contributions of each partner (both financial and non-financial), and future financial needs. Our lawyers at DSF ensure that all relevant factors are considered and presented effectively. We work to uphold your rights and secure a fair share of the assets, whether through negotiation, mediation, or litigation. This thorough approach helps to achieve equitable property division.
Valuation of Assets in Division of Property
Accurate valuation of assets is crucial in the division of property during a divorce in Ontario. Different types of assets require specific valuation methods to ensure a fair distribution. Real estate, investments, pensions, and business interests each have unique valuation processes. Our lawyers at DSF collaborate with financial experts to provide precise valuations, ensuring that all assets are fairly assessed. This detailed approach is vital for achieving an equitable division of assets in divorce. We strive to ensure that every asset is accounted for and accurately valued to protect your financial interests.
Distribution Methods in Divorce and Property Division
The division of assets in divorce can be approached using different methods to ensure a fair outcome. The primary methods include equal division, where assets are split 50/50, and equitable distribution, where assets are divided based on fairness rather than strictly equally. Courts in Ontario consider various factors, such as the length of the marriage, each spouse’s contributions, and future financial needs, to determine the most appropriate method. Our lawyers at DSF provide expert guidance to help you understand these methods and advocate for the best approach in your case, ensuring a fair division of property.
Challenges and Disputes in Division of Assets in Divorce
The division of assets in divorce often involves various challenges and disputes, particularly when significant assets are at stake or when emotions run high. Common challenges include disagreements over asset valuation, hidden assets, or differing opinions on what constitutes a fair division. Our experienced lawyers at DSF are adept at identifying and addressing these challenges. We focus on finding practical solutions that ensure a fair outcome, prioritizing transparency and fairness throughout the process. Each case is handled with care to resolve conflicts efficiently and protect your financial interests.
Why Choose DSF for Asset and Property Division
Choosing the right legal representation is crucial when dealing with the division of assets in divorce. Our lawyers at DSF offer:
- Specialized Expertise: Extensive experience handling complex asset division cases.
- Personalized Strategies: Tailored approaches to meet your specific needs.
- Strong Advocacy: Vigorous defense of your rights and interests.
- Clear Communication: Keeping you informed and involved throughout the process.
- Proven Track Record: A history of successful resolutions in asset and property division cases.
We have multiple convenient locations in Toronto, Whitby, Barrie, and other areas to better serve our clients. Find the nearest office by calling 416-449-1400 or visiting our locations page. Trust DSF to guide you through the complexities of divorce and property division, ensuring a fair and equitable resolution.
Asset and Property Division FAQs
When you are granted a divorce, or when you separate from your spouse with no reasonable prospect that you will resume cohabitation, your “net family property” (NFP) is subject to equalization. Per subsection 4(1) of the Family Law Act, your NFP includes all property that you and your spouse owns on the “valuation date”, including all debts and liabilities and all property, except for the matrimonial home and other exclusions provided for in subsection 4(2). When a couple divorces or separates, the valuation date is the earliest of the date a divorce is officially granted and the date when you separate from your spouse with no reasonable prospect of resuming cohabitation. Some examples of excluded property under subsection 4(2) include:
- property, besides the matrimonial home, that you inherited or were gifted from someone other than your spouse during your marriage;
- money that you received as a result of a payout from a life insurance policy;
- money that you received, or have a right to receive, as a result of a personal injury claim, such as a car accident; and
- property that you and your spouse have agreed to exclude from your NFP via a marriage contract
You can calculate your NFP by the following:
- Calculate the total value of assets, less any debts or liabilities, as of the valuation date;
- Calculate the total value of assets, less any debts or liabilities, as of the date of your marriage; and
- Calculate your NFP by subtracting the marriage date value from the valuation date value.
Once you and your spouse determine the value of your NFP, the spouse who has the lower NFP is entitled to a payment of half of the difference between their NFP and their spouses (per section 5(1) of the FLA). For example, if your NFP was $500,000.00 on the valuation date and your spouse’s was $1,000,000.00, then you would be entitled to an equalization payment of $250,000.00.
Section 7(3) of the Family Law Act sets out limitation periods for when you can make a claim for equalization following your divorce or separation. You cannot make a claim after the earliest of two years after the day in which your marriage was terminated by divorce or annulment, or six years after the day that you and your spouse separated with no reasonable prospect of resuming cohabitation.
Only married couples are eligible for equalization following the end of their relationship; however, cohabiting couples can still make property claims within two years of the termination of their relationship.
You or your spouse’s entitlement to claim assets following separation can also be limited through domestic contracts, such as marriage contracts, separation agreements, and cohabitation agreements. As stated recently by the Supreme Court of Canada (Anderson v Anderson 2023 SCC 13 at para 3), courts tend to respect such private agreements made between parties with respect to property division, so long as such agreements do not run awry of public policy and the bargaining process and substance of such agreements are fair.
Yes. Pursuant to the matrimonial property regime in Ontario, your spouse may be entitled to up to 50% of the value of your pension that you earned during your marriage. Section 10.1 of the Family Law Act authorizes the court to order an immediate transfer of a lump-sum payment out of a pension plan to satisfy an equalization payment. However, you and your spouse can come to an agreement, or you could seek a court order, to allow you to retain the full amount of your pension benefits in exchange for other assets or payments of equal value.
In general, your spouse is not entitled to any inheritance that you might receive. Pursuant to subsection 4(2) of the FLA, any property which you inherited during your relationship is excluded from the calculation of your NFP and will not be subject to equalization. However, there are some exceptions to this rule. If you use your inheritance to purchase the matrimonial home, then it will not be excluded. Your inheritance will generally also not be excluded if you use it to purchase property jointly owned between you and your spouse, to pay off a joint debt, or if it placed in a joint bank account owned by you and your spouse.
In general, no. Under the Ontario matrimonial property regime, debts that are solely in you or your spouse’s name remain the responsibility of that spouse after the divorce. However, you may be responsible for debt that is in both you and your spouse’s names or that was jointly incurred during your marriage. This can include amounts owed on joint credit cards, mortgages, and car loans. This default regime is subject to any valid marriage and separation agreements made by you and your spouse that deal with the issue of debt.
If the house is your matrimonial home, then yes. A “matrimonial home” is defined any home that is, or was at the time of separation, ordinarily occupied by the person and their spouse as their family residence. If you and your spouse ordinarily occupy more than one home, then you may have more than one matrimonial home. Per section 28 of the FLA, this applies only to homes located in Ontario.
Even if your spouse is not on title, both you and your spouse have an equal right to live in the matrimonial home (s. 19 of the FLA). Likewise, you each have a say in whether the home is encumbered or disposed of; both you and your spouse must give consent if you want to sell, transfer, or refinance your home, even if your spouse is not on title (s. 21 of the FLA). The matrimonial home is also treated differently in equalization; even if you solely owned the home coming into the marriage, the home cannot be deducted from your NFP and your spouse is likely entitled to 50% of the value.
In contrast, cohabiting spouses do not have the same automatic rights to the matrimonial home like married spouses. If a cohabiting spouse is not on title and wants to obtain some of the value of the matrimonial home, then they will have to negotiate for it or make an application to the courts.
If the home is not the matrimonial home, then it will be subject to equalization like any other property. If you purchased the home before your marriage, then it will not count towards your NFP; however, if you purchased the home during your marriage, then it will likely be included in your NFP, unless it falls one of the other exceptions under subsection 4(2) of the FLA.
RRSPs and TFSAs are considered to be matrimonial property for the purposes of equalization after divorce. If your RRSPs or TFSAs are solely in your name, then their value will be included in your NFP. If your RRSPs or TFSAs are jointly held, then their value will be split between you and your spouse’s respective NFPs. If you possessed your RRSPs and TFSAs at the date of your marriage, then only the increase in value during your marriage will be included in your NFP.
Shares are considered to be matrimonial property for the purposes of equalization after divorce. If there is no agreement in place directing how the shares are to be dealt with in the event of a divorce, then their value will likely be split between the two spouses.
It depends. If both you and your spouse equally own the business, then the entire value of the business will be attributed to each of you in your NFP calculation and the business will be split equally after the divorce. However, if you owned the business prior to the marriage, then your spouse will only be entitled to the value of half of the growth of the business during your marriage; the value of the business at the marriage date will be deducted from your NFP. If you received the business as a gift or through an inheritance, it may be excluded from your NFP under subsection 4(2) of the FLA.
Common law spouses are not entitled to equalization or property division following the end of their relationship. However, they can make property claims based on the equitable principles of resulting or constructive trusts and unjust enrichment. Part III of the FLA, which governs support obligations, also applies to common law spouses, so long as they have:
- cohabited continuously for a period of not less than three years; or
- are in a relationship of some permanence and share a child (per s. 29 of the FLA).
As such, common law spouses have the same entitlement to child and spousal support as married spouses under the FLA.
In general, property owned before marriage is subtracted from the value of your net assets upon separation or divorce to calculate your NFP for the purposes of equalization. One important exception is if you own a home at the marriage date, which later becomes the matrimonial home at the date of separation or divorce. As the matrimonial home cannot be deducted from your NFP, you cannot deduct the value of the home at the date of your marriage.
