Property Division in Ontario

Thanks for rating this article:

0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 0 Vote(s)

The Essentials of Property Division in Ontario

When married couples separate and decide to divorce, this triggers the need to divide their marital property.  The process and formula for doing so is set out in the Ontario Family Law Act, under what is known as the “equalization of Net Family Property.”  

What is covered?   Although there are limited exceptions, all property that has been acquired during the marriage is considered “family property” that is subject to division.   However, the matrimonial home is subject to special rules under the Act; there are legislated exclusions for certain assets (such as gifts and inheritances received prior to marriage).

Who gets how much?  Upon separation and divorce, each former spouse is entitled to share one half of the increase in value of the family property that they owned during the marriage.   Conversely, each spouse is liable for half of any losses.   As such, the Act’s formula for equalization involves applying several steps for each spouse:

- Article Continued Below -


To Our Newsletter

Step 1:  Determine the value of each spouse’s property coming into the marriage.

Step 2:  Subtract each spouse’s debts at the date of the marriage.

Step 3:  Determine the value of each spouse’s property (minus debts) at the “valuation date” (usually the date of separation).

Step 4:  Subtract the results of Step 1 and 2, from the results of Step 3.

After performing these calculations, the resulting figure will – generally speaking – be the individual spouse’s Net Family Property.  The same calculation must be applied to the other spouse’s assets and liabilities.   Then, under the Act, the spouse with the higher Net Family Property will be obliged to pay the other spouse in order to redress the imbalance, in the form of an “equalization payment.”

Are there exceptions?  In some circumstances this equalization payment can vary from the result otherwise dictated by a straight application of the formula, for example where the parties have entered into a pre-nuptial agreement prior to marriage, or a separation agreement when they decided to split.   The court may also examine the parties’ circumstances and conclude that an unequal division of Net Family Property should be awarded in the particular case.

Naturally, the equalization of Net Family Property is a complex legal exercise; competent legal advice should always be sought out in order to determine your rights.  Shulman Law Firm is a Toronto-area firm of experienced Family Lawyers who can provide practical advice and effective representation relating to the steps and processes involved in separating and getting divorced in Ontario.   Contact us to set up a consultation.

Please rate this article:

0 Vote(s)
The materials contained in this website are intended to provide general information and comment only and should not be relied or construed as legal advice or opinion. While we endeavor to keep the information on this web site as up to date, accurate and complete as reasonably possible, we do not warrant the completeness, timeliness or accuracy of anything contained in this web site. The application and impact of laws can vary widely, based on the specific facts involved. For any particular fact situation, we urge you to consult an experienced lawyer with any specific legal questions you may have. Your use of this website doe not constitute or create a lawyer-client relationship. Should you wish to retain our firm, kindly contact our office to set up a meeting with a lawyer.