In Ontario the Family Law Act, provides for the equalization of net family properties for married spouses. Equalization means that at the end of a marriage, all of the assets and debts that each spouse accumulated during marriage must be calculated to determine his or her “net family property”, which is similar to “net worth”. The spouse who has a higher net family property must pay one half the difference to the other spouse.
Transfer or Purchase of Property
Judges usually do not order the transfer of property to satisfy an equalization payment or allow a joint owner to purchase his or her co-tenant’s interest for a fixed price. A joint tenant is entitled to the highest price for his or her interest which may be more than the appraised value of the property.
The following is a list of property that a spouse may own on the date of separation that does not form party of his or her net family property:
- Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of marriage.
- Income from property referred to in paragraph (a) above, if the testator or donor has expressly stated that it is to be excluded from the spouse’s net family property.
- Damages or right to damages from personal injuries, nervous shock, mental distress or loss of guidance, care and companionship, or the part of a settlement that represents those damages.
- Proceeds or a right to proceeds of a policy of life insurance
Property can include your home, car, bank accounts, stock earnings, furniture and appliances, as well as other items. When you are getting a divorce, determining what is classified as property can be complex. Division of property can be a contentious issue upon separation and divorce, especially if your divorce will be a high-asset divorce.