PROPERTY DIVISION & EQUALIZATION

When a marriage ends, the contribution of each spouse to the marriage is legally recognized. Under Ontario law, the value of any property acquired by either spouse during the marriage and still existing at separation must be divided equally. Additionally, any increase in the value of property owned by a spouse at the date of marriage and still exists at the date of separation must be shared. The payment required to achieve this sharing is called an Equalization Payment or the Equalization of Net Family Property.

Exclusions, Deductions, and Common Law Spouses

Some property may be excluded or deducted from the division, such as gifts or inheritances received during the marriage from someone other than a spouse, provided these were not used toward a matrimonial home. Property owned on the date of marriage can also qualify as a deduction.

It is important to note that automatic property-sharing provisions only apply to married spouses. Common law spouses are not entitled to an Equalization Payment but may be eligible for compensation for direct or indirect contributions to property owned by their partner. These claims are referred to as trust claims.

It is notable through a domestic contract such as Cohabitation Agreements or Marriage Contract parties can contract out o the equalization provisions of the Ontario property legislation.

The Matrimonial Home

The matrimonial home is treated uniquely under Ontario family law. Unlike other property, and subject to any domestic contract, it cannot be excluded or deducted, even if it was a gift or owned by one spouse prior to the marriage, as long as it remains the matrimonial home at the time of separation. Special rules also apply regarding possession of the matrimonial home after a separation.

Statute of Limitations

It is crucial to act within the legal timelines for property division claims. A claim for Equalization or property division must be made:

• Within 6 years of the date of separation,
• Within 2 years of a divorce, or
• Within 6 months of the first spouse’s death, whichever occurs first.

Failing to act within these timelines may bar you or your spouse from ever making a claim for Equalization or property division in the future.

The Complexity of Property Division

While the concept of equalization may seem straightforward, Ontario’s property division regime can be very complicated and require strategic and specialised assistance—especially when one or both spouses have significant assets, such as pensions or business interests. In such cases, additional professionals may be required to determine the value of a spouse’s net worth.

We’re Here for You

At Taerk Family Law, we offer experienced legal guidance and a supportive, professional environment. We represent and advise clients on all areas of family law, including issues related to divorce, custody and access, spousal and child support, mobility matters, division of property, separation agreements, domestic contracts, religious marriage contracts, adoption, and cross-border family law issues. We pride ourselves on being directly accessible by phone or email, keeping everyone informed in a timely manner every step of the way. For added convenience, we also offer flexible scheduling, including evening and weekend appointments when needed. Learn more about our approach on our About Us page.

To discuss the issues of property division in Toronto or Ontario in a confidential free consultation, please contact us directly.