When a couple decides to tie the knot, any property that they acquire during the time of the marriage is said to belong equally to both of them. In other words, this means that all property acquired by either party during the course of the marriage is deemed on the breakdown of the marriage, to be the property of both individuals, regardless of who holds legal title. This is a pillar of Canadian family law, and the principle upon which it is based states that the institution of marriage constitutes an economic partnership between the spouses. This economic partnership begins when the couple get married, and ends when the couple get separated or divorced. At the end of the partnership, each spouse will be entitled to one half of the value of the accrued property. This does not mean that they’re entitled to one half of the property itself.
The division of assets can be a highly complicated process, involving many different experts in varying areas of competency, including accountants, auditors, valuation experts, and others. You should definitely seek the assistance of a competent Toronto Family Lawyer who specializes in the division of assets. Your Toronto Family Lawyer can help you get your fair share of the property. At LawyerSelect.ca, we specialize in connecting clients with top notch Toronto Family Lawyers who specialize in the Division of Assets.
Once the “economic partnership” is over – in other words, you’re separated or getting divorced – you’ll have to actually effect the division of property. To do that, the Ontario Family Law Act (FLA) uses the concepts of “net family property” and “equalization payment.” This requires each spouse to create a balance sheet of assets as at the valuation date. All the assets are then totalled up, and a value is obtained. From this value is subtracted the spouse’s debts and liabilities, as well as any assets that the spouse brought into the marriage (for the exception of a matrimonial home). The result is the spouse’s “net family property,” which is then compared to the other spouse’s “net family property.” The spouse with the higher “net family property” will be required to pay the spouse with the lower “net family property” one half of the difference between the two. This is known as the “equalization payment” that one spouse pays to the other. The equalization process is set in motion when an application is filed in family court. The division of assets must be sought by one of the spouses within two years after the Final Divorce Order, or six years after the day the parties separated.
If you're going through a divorce, the last thing you want to do is learn the complicated laws dealing with the division of assets during a separation or divorce. Let the team at LawyerSelect.ca put you in touch with a skilled Toronto Family Lawyer who specializes in the Division of Assets. Your Toronto Family Lawyer can help you protect your interests and enforce your rights. We work with some of the best Toronto Family Lawyers who specialize in the Division of Assets.
As we alluded to above, the matrimonial home is dealt with differently than other assets and property. This is because the matrimonial home is a special type of property that is shared between the parties. As a result of this classification, a matrimonial home that is brought into the marriage by one of the parties will not be included in their date of marriage deductions. In addition, a matrimonial home that is inherited or received as a gift by one of the parties during the marriage will also not be included in that party’s date of marriage deductions.
But what exactly constitutes a “matrimonial home”? In Ontario, the family law defines a matrimonial home to be every property in which a person has an interest and that is, or if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as the family residence. This definition is quite broad, and as a result, can include properties like cottages, trailers, and other types of real property, and allows for more than one matrimonial home at any given time.
In Ontario, the FLA provides special treatment for any assets received by a spouse during a marriage by way of inheritance. Specifically, if a spouse inherits money or property during the marriage, then the value of that property (if it’s still owned by that spouse on the valuation date) will not form part of that spouse’s net family property. However, things get more complicated from here because the inheritance exception only applies if the inherited money, or the money received from the sale of inherited property, is not mixed with other joint funds, or used towards the matrimonial home.
So, for example, a person who inherits $50,000 and deposits that money into an RRSP account will be protected by the inheritance exception, and the $50,000 will not form part of their net family property. However, a person who inherits $50,000 and deposits that money into a joint bank account with their spouse will only be able to claim 50% of the original inheritance, so only $25,000, instead of $50,000, will be deducted from their net family property. In addition, if the inheritance money is used for joint purposes, like funding a family vacation or paying off a debt, then none of it can be deducted from that person’s net family property. The same things goes if the money is used on the matrimonial home.
Using this exception to exclude certain assets from your net family property can be a complicated endeavour. Not only are you likely to run into logistical problems, but you might also find it challenging to trace money that was mixed with other funds. This is why it's vitally important for you to seek competent legal representation for any proceeding where a division of assets is at stake. At LawyerSelect.ca, we know which Toronto Family Lawyers specialize in the Division of Assets, and we'd be more than happy to connect you with them.
There is a common misconception out there that common law couples also benefit from the law governing the division of assets. This is not true. The Supreme Court of Canada put that issue to bed in a 2002 decision, where it held that the definition of “spouse” does not include partners in a common law relationship. As a result, couples in a common law relationship where legal title to an asset is NOT held jointly (meaning, it’s held solely by one partner), and where the other partner claims that they’re entitled to an interest in that property, the latter partner has no protection under the law to claim an interest in that property.
Rather, a common law partner that seeks to establish an interest in property held in the name of the other partner will need to use the principles of trust law, like resulting and constructive trusts, and the equitable principle of unjust enrichment, to make any sort of claim to the property in question. This is a very complicated matter, and you're unlikely to succeed at it on your own. Not to worry, a LawyerSelect.ca client specialist is always ready to help you find the right Toronto Family Lawyer who specializes in the Division of Assets.
The law respecting division of assets, as well as the Family Court system, are both legally and procedurally time consuming and complicated. Equally as challenging are the out-of-court negotiations that are held between the parties. This is because most people are unfamiliar with family law, and are, therefore, unaware of the rights they may have or the entitlements they may seek.
Those that represent themselves, whether in a court proceeding or during negotiations, run the risk of becoming overwhelmed, stressed out and lost. What usually results is they inadvertently hurt their own case by filing the wrong motion, or negotiating the wrong term. Don't prejudice yourself because you didn't want to spend the money on a lawyer. At LawyerSelect.ca, we can connect you with a Toronto Family Lawyer who specializes in the Division of Assets. If you need, we'll connect you with a Toronto Family Lawyer who charges reasonable fees, and accepts payment plans. Click the button below to start your search for Toronto Family Lawyers who specialize in the Division of Assets.