Equalization

When you and your spouse separate and/or divorce it may be necessary that
a division of property and equalization payment ensue. Therefore, an application
may be brought under s. 7(1), against a spouse or his or her estate, to
either the Superior Court of Justice or the unified Family Court for a
determination regarding the equalization of net family properties pursuant
to s.5(1).

After the occurrence of one of the events listed in s. 5(1)-(3) that essentially
trigger a spouse’s entitlement to equalization, the applicant may
bring a claim under this Act either:

• two years after the day the marriage is terminated by divorce or judgment
  of nullity;
• six years after the day the spouses separate and there is no reasonable
  prospect that they will resume cohabitation;
• Six months after the first spouse’s death.

It is interesting to note that subsection (3) allows for an equalization
payment to be made while the couple is still cohabiting:

In 2001 the Ontario Court of Appeal affirmed an earlier decision explaining
that the effect of s. 5(3) is that “where separation or death is
certain, a spouse is under a duty not to deplete his or her net family property.

Section 5(3) enables a spouse in the face of such conduct to trigger the
equalization mechanism.” However, it may not be necessary that separation,
divorce, or death be imminent for a spouse to bring a claim under s. 5(3).
An application may be brought under s. 7(1) based on s. 5(3) if the spouse
is worried of the possibility of improvident depletion because the other
spouse suffers from a loss of mental capacity or is engaging in reckless
behavior (i.e. excessive gambling) and dissipating the family’s
income and assets which is affecting their standard of living.

If necessary, the court may also make an order for preservation pursuant
to s. 12 of the Act. This type of order essentially ensures that there
are sufficient assets to make an equalization payment once it is ordered.