Property Division in Ontario
 
Ontario generally uses an equalization of net family property system for married spouses. This does not ordinarily mean that every asset is physically divided equally or that each spouse automatically receives half of every item of property.
 
Instead, each spouse's net family property is calculated. Subject to the applicable rules, this generally involves determining the value of property owned on the date of separation, deducting qualifying debts and liabilities, accounting for certain property owned on the date of marriage and considering any applicable exclusions.
 
The spouse with the greater net family property will generally owe the other spouse an equalization payment representing one-half of the difference between their respective net family properties.
 
The Date of Separation
 
Establishing the date of separation can be particularly important in a property case.
 
Assets, liabilities and other financial interests are generally valued as of the applicable valuation date. Where spouses disagree about when they separated, that disagreement can affect the equalization calculation, particularly where the value of investments, businesses or debts changed significantly during the disputed period.
 
We help clients assess the evidence surrounding the separation date and its potential financial consequences.
 
The Matrimonial Home
 
The matrimonial home receives special treatment under Ontario family law.
 
Unlike many other assets brought into a marriage, a matrimonial home that is still ordinarily occupied as a family residence at separation can have unique consequences for the equalization calculation. Questions may also arise concerning possession of the home, its value, carrying costs, a potential buyout or the sale of the property.
Where spouses cannot agree about what should happen to the matrimonial home, court proceedings may be necessary to address possession, sale or related financial issues.
 
Property Owned Before Marriage
 
Property owned before marriage can affect the calculation of net family property. In appropriate circumstances, a spouse may receive a deduction for the value of property they owned on the date of marriage.
 
The availability and amount of a deduction may depend heavily on the evidence. Where many years have passed, obtaining records establishing historical account balances, property values or other assets can become difficult.
 
We help clients identify potential date-of-marriage deductions and the documentation required to support them.
 
Excluded Property
 
Certain property may be excluded from a spouse's net family property where the requirements of Ontario's Family Law Act are satisfied.
 
Potential exclusions can include certain gifts or inheritances received from third parties during the marriage, damages or rights to damages in certain circumstances, and property into which excluded property can be traced.

The existence of an inheritance or gift does not necessarily resolve the issue. How the funds were used, whether they can still be traced and whether they were invested in a matrimonial home can materially affect the analysis.

Business Interests & Corporations

Property division can become substantially more complex where one or both spouses own a business, professional practice, corporation or other private company interest.

Determining the value of a business may require examination of corporate financial statements, tax returns, shareholder interests, retained earnings, shareholder loans and other financial records. In appropriate cases, expert business valuation evidence may be required.

Corporate interests can also create disclosure and income issues that overlap with claims for child or spousal support.
We assist clients in identifying the relevant corporate information, assessing business interests and addressing valuation disputes within the equalization process.

Pensions & Retirement Assets

Pensions can represent one of the most valuable assets accumulated during a marriage.

Ontario has specific rules governing the valuation and division of certain pension interests following separation. Other retirement assets, including RRSPs and investment accounts, may also form part of the spouses' net family property.
The tax consequences associated with different assets can matter when negotiating an overall property settlement. Two assets with the same apparent value do not necessarily have the same practical value to the spouses.

Investments, Bank Accounts & Other Assets

Equalization can involve a wide range of property, including:
 

• bank and investment accounts;

• RRSPs and other retirement savings;

• real estate;

• businesses and corporate shares;

• vehicles and valuable personal property;

• pensions;

• stock options and other employment-related interests;

• debts and liabilities; and

• other financial interests owned by either spouse.
   

A proper equalization analysis requires a complete understanding of the spouses' financial circumstances rather than focusing only on the most obvious assets.

Debts & Liabilities

Property division involves debts as well as assets.

Mortgages, lines of credit, credit cards, tax liabilities, business debts and other obligations may affect a spouse's net family property. Disputes can arise over whether a particular liability should be included, its value at the relevant date and the evidence supporting it.

We review both sides of the balance sheet when assessing an equalization claim.

Financial Disclosure

Reliable financial disclosure is essential to property division and equalization.
Spouses may be required to disclose banking records, investment statements, tax documents, pension information, corporate records, real estate information and other documents necessary to identify and value property.

Where disclosure is incomplete, the true value of a property claim may be impossible to determine. We identify missing disclosure, pursue the records necessary to assess the claim and, where necessary, seek court orders requiring production.

Valuation Issues

Not every asset has an obvious value.

Real estate, private corporations, professional practices, pensions and other assets may require formal valuation. In complex cases, accountants, business valuators, appraisers or other experts may be necessary.
We work with clients to determine when expert evidence is warranted and how valuation evidence fits into the broader equalization analysis.

Negotiating an Equalization Settlement

Many property disputes can be resolved without a trial.

Once sufficient financial disclosure has been exchanged and the parties understand their respective positions, equalization issues can often be addressed through negotiation, mediation or a separation agreement.

An effective settlement requires looking beyond a single equalization number. The matrimonial home, timing of payments, transfer of assets, tax consequences and other outstanding family law issues may all affect the structure of a resolution.

Property & Equalization Litigation

Where spouses cannot agree on property division or adequate financial disclosure is not provided, family court litigation may be necessary.

We represent clients in equalization and property proceedings involving disclosure motions, the matrimonial home, disputed assets, valuation issues, excluded property and other financial claims.

Our approach is evidence-driven. We identify the financial issues that can materially affect the result and focus the litigation on obtaining the information and relief necessary to protect our client's position.

Speak With a Family Law Lawyer

Property division can affect your financial position for years after a separation. Understanding what you own is only the beginning. The proper treatment of the matrimonial home, businesses, investments, pensions, debts, exclusions and date-of-marriage property can significantly affect the final equalization payment.
Contact Kassa Family Law to discuss property division, equalization or a financial dispute arising from separation in Ontario.