How To Deal With Property For Married Spouses in Your Separation or Divorce in Ontario!

How To Deal With Property For Married Spouses in Your Separation or Divorce in Ontario!

I’ll get straight to the point:  How you deal with property issues in your separation or divorce when you’re married is not as simple or easy as you think it is!

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

Many spouses simply think you divide your property equally when you get separated or divorced.  This is not the case at all.

How does property division work in Ontario when you are married?  In Ontario, there is a specific legal formula you must follow to determine the property issues in your family law case.

You and your spouse have to calculate your net worth on the date of separation.  Then the person who has the higher net worth must pay half of the difference to the other spouse. 

This payment is called an equalization payment.  When a spouse pays an equalization payment to the other spouse, this payment will ensure that each spouse has the same net worth.

The key thing to know is to understand how to calculate your net worth on the date of separation.   You must add up the value of all your assets.  These assets include your bank accounts, investments, the value of your car or truck, and your real estate. 

You only put down half of the value of any jointly owned property rather than the whole value.

Then you must deduction your debts from the value of your assets on the date of separation.  Your debts include loans, lines of credit, mortgages, and credit card debts. 

It’s so important to include your debts since they can really bring down or reduce your net worth on the date of separation.

You also get to deduct your net worth on the date of marriage from your net worth on the date of separation. 

This recognizes that you do not have to pay any investments and assets to your spouse that you had before you were married.

You also get to make certain exclusions from this calculation.  You get to exclude inheritances and gifts you have received during the marriage, life insurance proceeds, and money received as compensation for any personal injuries.

Here’s an example of an equalization calculation:  Let’s say that Steve has net worth for $850,000 on the date of separation after you have taken into account all the proper deductions and his wife, Natalie, has a net worth $350,000 on the date of separation. 

You must subtract Natalie’s net worth of $350,000 from Steve’s net worth of $850,000 which equals $500,000.  Then you must divide $500,000 by 2 which equals $250,000. 

The equalization payment in this example is $250,000.  Therefore, Steve must pay $250,000 to Natalie so that his net worth is now $600,000 and her net worth increases to $600,000.  Both spouses now have the same net worth at the end of the equalization process based on Ontario family law.

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 

You’ll find the group and join.  

Thanks for watching this video.