What’s A Fair Deal on the Property Issues in Your Separation or Divorce in Ontario?
How many times have you scratched your head trying to figure out the property issues in your separation or divorce?
Probably quite a few…I would say!
I will discuss how to know whether the property issues are fair and reasonable in a proposed separation agreement or divorce settlement.
Hi, my name is Thomas O’Malley. I’m an experienced family lawyer in Durham Region and the GTA.
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You need to make sure that you figure out properly the property formula in your separation or divorce in Ontario.
Here’s the property formula: You and your spouse must each separately determine your net worth on your date of separation (which is called the valuation date in Ontario family law).
Then, the spouse with the lower net worth is entitled to half of the difference.
For example, if your spouse has a net worth of $600,000 and you have a net worth of $300,000, you subtract $300,000 from $600,000 which equals $300,000. Then you divide $300,000 by 2 which equals $150,000.
The spouse with the higher net-worth in this example must pay $150,000 to the other spouse with the lower net worth. This payment of $150,000 is called an equalization payment since it now equalizes the net worth of both spouses.
Your first step in this process is to figure out your net worth by listing all of your assets and the value of each asset that you own or have on the date of separation. These assets include your real estate, cars or trucks, bank account amounts, investments and RRSPs as well as the value of any employment pension.
Then you must list all of your debts and amount of each debt that you have on the date of separation. These debts include mortgages, lines of credit, car or truck loans, credit card debts, and university or college loans.
Then you must deduct the total amount of your debts from the total amount of your assets on the date of separation. The resulting figure is your net worth on the date of separation.
As I mentioned, your former spouse must make the same calculation.
You and your spouse must exchange detailed Financial Statements as part of this process to ensure that this property calculation is made fairly. Your calculation of your net worth is set out in your Financial Statement.
This exchange of Financial Statements is called financial disclosure.
You cannot have a fair property settlement without full financial disclosure, including the exchange of Financial Statements.
You and your spouse must also provide supporting documents that show the value of each asset and the amount of each debt listed in your Financial Statement as part of full financial disclosure.
Then you must make the property calculation with an important document called a Net Family Property Statement. This document shows the actual calculation of any equalization payment that one spouse owes to the other spouse.
You quickly can see that you need the help of an experienced Ontario family lawyer to make sure that the property calculation is correct.
For example, you don’t want to miss any important deductions that you are allowed to take in determining your net worth.
That could cost you thousands of dollars!
If you have any questions about your separation, divorce or family law case and you would like our help, feel free to contact on my Facebook law office page, that’s O’Malley Family Law, or call me at 905-434-8837 and I’ll point in you in the right direction.
Click here to join my free Facebook GTA and Durham Region separation and divorce support group: GTA and Durham Region Separation and Divorce Support Group
Please make sure to share this important information and video with your friends, family members and co-workers so that it helps more people avoid serious problems in their separation or divorce before it’s too late.