How to Actually Figure Out Your Property Division in Your Separation or Divorce in Ontario!

How to Actually Figure Out Your Property Division in Your Separation or Divorce in Ontario!

I’m about to reveal to you more essential information you need to successfully deal with the property issues in your separation or divorce.

I know this stuff is probably giving you a headache already.

Just hang in there.

Hi, my name is Thomas O’Malley.  I’m an experienced family lawyer in Durham Region and the GTA.

You now need to know about one really important exception in figuring out your property calculation in your separation or divorce.

You cannot deduct the value of the matrimonial home on the date of marriage if you still own the same home on the date of separation. 

This really makes a big difference.

For example, John owned a home at 123 Simpson Avenue in Toronto, Ontario on the date of marriage.  He then sells this home four years later and buys another home at 456 Wilson Avenue in Toronto which is the home that he owns on the date of separation.

He can deduct the net value of home at 123 Simpson Avenue in Toronto in determining or calculating his net worth.

However, he cannot deduct the value of his home at 123 Simpson Avenue in Toronto if he still owns this home on the date of separation.

Now that you have calculated your net worth on the date of separation, that is, your assets minus the amount of your total debts, you can then figure out the issue of equalization of net family properties.

This means that you must compare your net worth with the net worth of your ex-spouse on the date of separation.

The property formula under Ontario family law is that the spouse with the lower net worth on the date of separation is entitled to half of the difference between their net worth and the net worth of their former spouse.

Let’s look at an example to help you understand this complicated calculation and process.

John Smith has assets worth $400,000 on the date of separation with total debts amounting to $100,000.  He also has net assets worth $50,000 on the date of marriage (which does not include a house).  He can, therefore, deduct, $150,000 from the value of his assets for a net worth of $250,000 on the date of separation.

His wife, Nancy Smith, has assets worth $200,000 on the date of separation with total debts amounting to $50,000.  She also has net assets worth $25,000 on the date of marriage (which also does not include a house).  She can, therefore, deduct $75,000 from the value of her assets for a net worth $125,000 on the date of separation.

Now we can make the equalization payment calculation.  You deduct her net worth of $125,000 on the date of separation from John’s net worth of $250,000 on the date of separation for a figure of $ 125,000. 

Then you divide $125,000 by two for a result of $62,500.  Therefore, John must pay Nancy $62,500 as an equalization payment to Nancy so that Nancy now has a net worth of $187,500 and John has a net worth of $187,500.

John’s payment of $62,500 to Nancy equalizes their net worth.  That’s why this amount is called an equalization payment.

I know that these property issues get complicated really fast.  Clearly, you can see you need to discuss these property issues with an experienced Ontario family lawyer.

If you have any questions about your separation, divorce or family law case and you would like our help, there’s a few ways to contact our office. 

You can leave a message on my Facebook law office page, visit my website at www.canadiandivorcelegaladvice.com, or call me directly at 905-434-8837. 

We would be happy to speak to you.

Oh, by the way, did you know you can protect your family law rights and get essential information on settling your family law issues with your former spouse with the daily indispensable family law advice and tips at my FREE Facebook group? 

Click here to find out more : Durham Region Separation and Divorce Legal Support Group  

Thanks for watching this video.