Property Division

The law in Ontario treats marriage as an economic partnership.

When a married couple separates, they have to share any increase in the value of their property that occurred during the relationship. This is usually accomplished through an “equalization payment” made by one spouse to the other.

There are two steps to determining the amount of the equalization payment in a particular case. First, each spouse must calculate his or her “net family property” or NFP, which refers to the value of property that the spouse owns on the valuation date (usually the date of separation) after deducting debts and liabilities. A spouse may also deduct the net value of certain property owned on the date of marriage, and may exclude certain property owned on the valuation date. A lawyer can help you understand what kind of deductions and exclusions may be appropriate in your case. The second step is to determine the difference between the two NFP amounts. The equalization payment should be half of the difference between them.

In determining how the value of property should be divided at the end of a marriage, there are special rules that apply to the home (or homes) where the couple lived together just before separation (the “matrimonial home”). There are also special rules that apply to gifts and inheritances in some cases.

Unlike married spouses, common-law spouses do not have an automatic right to share in the value of property acquired by the other spouse during the period of the relationship. Generally speaking, if you are in a common-law relationship, the property that you own at the end of the relationship continues to be yours alone, and jointly-owned property may be divided or sold so its value can be shared. However, a common-law spouse may claim an interest in the other spouse’s property if he or she contributed to its acquisition or the increase in its value.