Legal Considerations Pertaining to Asset & Property Division

Under Ontario law, each spouse is entitled to an equal share of the increase in the couple’s net worth accumulated during the marriage. This is known as the equalization of net family property. The process involves:

• Calculating Net Family Property (NFP): Each spouse’s assets and debts are assessed as of the date of separation, with certain exclusions, such as inheritances or gifts received from third parties during the marriage (provided they were kept separate).
• Determining the Equalization Payment: The spouse with the higher NFP may be required to make an equalization payment to the other to ensure both parties leave the marriage with an equitable share of the marital property.

The division of assets in divorce typically includes:

• Matrimonial Home: Special rules apply to the family home, as both spouses have an equal right to possession, regardless of whose name is on the title.
• Savings and Investments: RRSPs, pensions, and other financial assets accumulated during the marriage may be subject to division.
• Business Interests: If one or both spouses own a business, its value may be included in the equalization process.
• Debts: Liabilities such as mortgages, loans, and credit card debt are also considered when determining net family property.

Certain assets may be excluded from equalization, such as inheritances or personal injury settlements, provided they were kept separate from family property. Prenuptial agreements or marriage contracts can also impact how property is divided by outlining predetermined arrangements for divorce and division of assets.

While equalization generally applies to married couples, common-law spouses are not automatically entitled to the same division of property. Instead, common-law partners may need to make a claim based on unjust enrichment or a constructive trust if they contributed to their partner’s assets without legal ownership.

Asset & Property Division Services

Equalization of Net Family Property

In Ontario, the equalization of net family property is the standard process for the division of property in a divorce. This involves calculating each spouse’s net worth at the date of separation and ensuring that both parties leave the marriage with an equitable share of the wealth accumulated during their time together. The spouse with the higher net family property may be required to make an equalization payment to balance the division of assets. This process can be complex, particularly when dealing with high-value assets, real estate, pensions, or investments. Our team of asset and property division lawyers provides legal guidance to ensure that all financial factors are properly accounted for and that our clients’ rights are protected.

Trust Claims

In some cases, a spouse may claim an interest in property that is not legally in their name but to which they contributed financially or otherwise. This type of claim is often based on constructive or resulting trusts, which recognize contributions such as financial investments, unpaid labour, or improvements to a property. Trust claims are especially relevant in common-law relationships, where there is no automatic right to equalization. We assist clients in asserting or defending trust claims, ensuring that their contributions are properly recognized in the division of assets.

Family Businesses

Dividing a family business during a divorce can be particularly challenging, as it involves not only financial considerations but also operational concerns. A business may need to be valued to determine its fair market worth, and decisions must be made about whether one spouse will retain ownership, buy out the other’s interest, or sell the business entirely. We work with financial experts to ensure an accurate valuation and help our clients negotiate arrangements that protect their financial interests while maintaining business continuity whenever possible.

Financial Disclosure & Investigation

Full and accurate financial disclosure is essential for a fair division of property. Both spouses are required to provide complete details about their income, assets, debts, and any financial transactions that may impact the equalization process. Sometimes, one spouse may attempt to hide assets or undervalue property to avoid fair division. Our team of asset and property division lawyers assists in conducting financial investigations when necessary, working with forensic accountants and other experts to uncover hidden assets and ensure transparency. We advocate for our clients to receive a fair settlement based on a complete and accurate financial picture.