Property Division

Property Division

The division of assets and property can be complicated and confusing. Furthermore, married spouses have different property rights under the law than common-law spouses.

Married couples are entitled to a legislated property division regime, known as “Equalization”, which is set out in the Family Law Act. The equalization process begins with each spouse calculating their respective “net family property” by totalling the value of their debts, assets, and liabilities as of the date of marriage. This number is then subtracted from the total of their debts, assets, and liabilities as of the date of separation. There is also excluded property. This process results in one spouse (with the higher net family property) owing the other spouse an equalization payment (or one-half of the difference between the two values).

Common law spouses do not have an automatic right to equalization of net family property under the Family Law Act. Upon separation, common law spouses retain whatever assets are in their sole name. Jointly held assets, however, are usually divided equally between them. Alternatively, where one spouse holds sold title to a significant asset to which the non-title holding spouse made significant contributions (financially or otherwise), the non-title holding spouse may have an interest in that property and a right to share in its value. In order to obtain such an interest, the non-title holding spouse would have to bring a claim for either a resulting trust, constructive trust, or other equitable interest over that property.

If you would like to speak with one of our lawyers regarding further issues related to this topic please contact us at (416) 840-1475 or schedule your free initial consultation here.