The end of a relationship is an emotional and difficult time, and who gets what may be one of the last things on your mind. But the truth is that property division is an important part of the divorce process, and it’s something that needs to be handled sooner rather than later. If you have a marriage contract or cohabitation agreement in place, the property division process may be as simple as asking the courts to enforce that contract. If you didn’t prepare a marriage contract ahead of time, it’s important to talk to a Toronto divorce lawyer about how property is divided, how the family home is handled, and what your next steps should be.
Any time you are going through a divorce or relationship separation, the potential for complex property division issues exists. Discussing your case early on with a family law lawyer can help you understand how the Ontario property division guidelines may be applied to your case and what you need to know about the process.
What Are the Property Division Guidelines in Ontario?
Property division guidelines in Ontario are based on the idea of net family property. While each situation is unique, there is a general formula that is used to come up with the value of the net family property. Depending on the net family property share, one of the parties may need to make an equalization payment to the other to ensure that the property division is equitable.
To calculate the net family property, you add up all of the assets other than the marital home–this is handled separately–and the value must be distributed equally between the parties–that you owned as of the date of the end of the marriage, usually referred to as the date of separation. This is the family property.
Then, add up all of the assets you owned at the date of marriage minus any debts you had at that time. This is your individual property. Lastly, subtract the individual property value from the family property value to get your net family property share. If you get a negative number, it is treated as zero.
To find out if one party needs to pay the other an equalization payment, you take the larger of the two shares, subtract the smaller number, and then divide the result in half. This number is the proposed equalization payment.
While this is the general process for determining net family property, it’s not how all cases are treated. There can be complex assets involved that require a more detailed valuation, and common law spouses may have unique situations where the majority of the marital property is in individual names. It’s always a good idea to talk with a family law lawyer about property division, especially if you have a common law relationship or think you might have a more complicated property division situation.
How Does the Family Law Act Impact Marital Property Division?
The Family Law Act provides all of the information Toronto property division lawyers and the courts need to determine what is marital property versus what is the individual property and how the assets should be equally divided. It covers all aspects of divorce, including net family property, what happens to the family home, spousal support, and child support.
While it’s important to be familiar with the Family Law Act, it can be difficult for the average person to understand exactly what it outlines and how it applies to real-world scenarios. Much of the language in the Family Law Act focuses on things like equitable division and the best interests of the children, which can vary greatly from situation to situation.
For example, equitable division of the assets in one case may mean selling assets and splitting the profits equally. In another, it could be dividing ownership of the assets between the two parties. While the second way may not resolve in an exact 50/50 split when it comes to valuation, the division may still be considered equitable by the courts.
How Do the Courts Decide Between Individual and Marital Property?
What counts as individual property or marital property with the courts is something that many people are confused about going into a divorce. In general, marital property is property that was acquired during the marriage, and individual property is property that was owned prior to the relationship. However, there are a few exceptions to this, with the main one being the family home. The family home is considered a joint asset of marital property, even if one party owned it individually before the marriage or it was gifted to or inherited by one party during the marriage.
In some cases, assets that you receive during the marriage may be considered individual property. These include money from life insurance, real estate other than the main family home that was received as a gift or inheritance, and compensation from a personal injury settlement.
Common law relationships with common law spouses are usually subject to the same rules on what is net family property and what is individual property.
How Can a lawyer Help Me With Complex Property Division Issues?
Some property division cases are simple. Everyone agrees on how the assets are to be divided, and there isn’t anything beyond a bank account, a house, and a couple of vehicles. But in many cases, property division can get much more complex and difficult. In these cases, a family law lawyer can help in the following ways.
Ensuring All Assets Are Disclosed
It’s not unusual in contentious divorces for one party not to have a clear picture of the joint finances. There may be assets or investments you aren’t aware of, and sometimes, you may not even know how much money is coming into the household on a monthly basis. Without a lawyer, you are relying on the other party to be honest when they do their financial disclosure. If you think that there may be assets that weren’t disclosed or your ex wasn’t honest about how much money they make, a lawyer can investigate to get accurate information and ensure that the property division is based on thorough, accurate information.
Advising on Your Rights
If you don’t know what your rights are when it comes to dividing marital property, you may agree to a settlement that is far less than you deserve. Hiring a lawyer ensures that you have legal counsel that is interested only in your rights. Your lawyer can provide you with the pros and cons of agreeing to a settlement versus taking the case to trial and ensure that you are aware of all of your options.
Toronto divorce lawyers know the local laws and are familiar with the Ontario court system, which makes them especially suited to helping you navigate divorce issues such as marital property division. And the team at Anthony Family Law is ready to discuss your case, advise you of your options, and put our years of experience to work for you. Call 647-933-2397 to schedule your appointment today.