Division of Property

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When a marriage ends, the equal contribution of each person to the marriage is recognized. The law provides that the value of any kind of property that was acquired by a spouse during the marriage and still exists at separation must be divided equally between the spouses. Also, any increase in the value of property owned by a spouse at the date of marriage must be shared. The payment that may be owed to one of the spouses in order to effect this sharing is called an equalization payment, or an equalization of net family property.

There are some possible exceptions to these rules, which are called excluded property, and may include gifts or inheritances received during the marriage from someone other than a spouse, provided that the gifts or inheritances were not used towards a matrimonial home.

These automatic property sharing provisions only apply to married spouses. If you are in a common law relationship, you are not entitled to an equalization payment, but may be entitled to a payment from your spouse to pay you back for a direct or indirect contribution to property that he or she owns. These claims are referred to as trust claims.

For more information about the property division laws in Ontario, see the publication: Separation and Divorce or Death of a Spouse: Property Division

Pensions

Effective January 1, 2012, legislative changes to the Family Law Act and the Pension Benefits Act will make it easier for couples to value and divide pension assets following marriage breakdown in Ontario.

As of January 1, 2012, pension plan members who have to pay their former spouse a settlement based on the value of their pension plan will be able to make some or all of the payment from the pension plan itself. The pension plan administrator will also now be responsible for valuing the pension plan so that spouses do not have to hire an actuary to do this for them.

The new rules apply to married spouses in Ontario, where one of the spouses is a member of an Ontario pension plan, if they separated:

  • on or after January 1, 2012; or
  • before January 1, 2012, if they had not yet resolved their property settlement by that date.

The new rules also apply to unmarried spouses if they agree to share the value of the pension plan following separation.

More information on the recent changes and the required forms that must be submitted to the pension plan in order to obtain the pension valuation can be found on the Financial Services Commission of Ontario website.

Matrimonial Homes

The family home is a special place. It is where you live and where your children feel most comfortable. If you own your home, it may be the most valuable thing you own.

If you are married, both of you have an equal right to stay in your home unless a judge decides that one of you must move out.

Since both of you have a right to stay in your home, neither of you can sublet it, rent it, sell it or mortgage it without the other’s permission. This is true even if your lease is in only one of your names or if only one of you owns the home.

When you separate, both of you may want to stay in the family home. If you cannot agree on who should stay in the family home, you can use lawyers, a mediator or an arbitrator to help you decide, or you may have to go to court to have the judge decide. An order or agreement for exclusive possession allows one spouse to use it, but not the other.

It may be that, after the separation, neither of you will be able to afford to stay in your home.

If you have children, the person who has custody of the children will most often be the one who stays in the family home with the children. This helps children adjust to their new family situation in a place and neighbourhood that they already know.


For more information

Consult with a lawyer
 
Read What you should know about Family Law in Ontario (available in 9 languages)
 
Read CPP Benefits - Are You Entitled? Separated? Divorced? (CLEO)
This booklet contains information on the division of Canada Pension Plan credits when common law or married couples separate or divorce.