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In the absence of an enforceable domestic contract, property division following the breakdown of a marriage is governed by the two step procedure set out in the Family Law Act (Ontario). First, the “net family property” of each of the spouses is calculated. Second, as a general rule, the spouse with the greater “net family property” is obliged to pay one-half the difference to the other spouse. Where “equalization” would lead to an unconscionable result, an unequal split of net family property may be ordered by the Court.
“Net family property” consists of all of the property in a spouse’s name, valued as of the valuation date, after deducting debts and the value of property the spouse brought into the marriage. Special rules apply to the matrimonial home.
Pensions, even though they are not liquid, are considered property for the purposes of the Family Law Act (Ontario) and must be valued by the pension administrator.
Sound confusing? It can be.
There are many exceptions and special treatment in the calculation of a married spouse’s “net family property” for things such as a matrimonial home, gifts, inheritances and contingent interests in properties. Additionally, consideration ought to be given to the tax implications of proposed property settlements.
There are also strict time lines affecting your claim with the result that, if you wait too long to make a claim for property division, you may be barred from doing so.
The Family Law Act (Ontario) does not extend property division rights to unmarried couples. There may, nonetheless, be certain remedies available such as unjust enrichment claims which are, by their nature, expensive to pursue and difficult to prove.
Let Sorley & Still Help You: Sorley & Still’s lawyers can help you understand your property rights on the dissolution of your marriage or common law relationship.