Division of Assets Protecting Your Family's Interests for Over 25 Years

Division of Assets

How Is Marital Property Divided in Ontario?

At Feldstein Family Law Group P.C., we understand that one of your primary concerns is to protect your assets and to leave your marriage in the best possible financial position. Our divorce lawyers are here to help you accomplish just this.

According to the Canadian Constitution, the federal government has authority to enact legislation dealing with:

  • Marriage and divorce, and the provinces have the authority to enact legislation dealing with property and civil rights in the province. This constitutional division of powers means that a married couple’s divorce will be sanctioned under the federally enacted Divorce Act, while the division of a married couple’s assets is determined by reference to a provincial statute. In Ontario, the relevant statute is the Family Law Act.

Community Property & the Economic Partnership of Marriage

The property regime laid out in Part 1 of the Family Law Act is generally referred to as a deferred community property regime. This means that all property acquired during the course of the marriage by either party, with certain exceptions, is deemed on the breakdown of the marriage, to be the property of both parties notwithstanding legal title.

The principle underlying this regime is that marriage constitutes an economic partnership. The critical dates in this economic partnership are the date of marriage, which constitutes the entry into the partnership, and the “valuation date”, which can be viewed as the date when one or both partners decide to dissolve the partnership, for example the date when the parties separate or divorce. When the partnership is dissolved, each partner is entitled to one half of the value of the accrued property and not one half of the property itself.

Interested in learning how your property will be affected by divorce or separation? Call (905) 581-7222 for a free in-office consultation.

Property & Asset Division in Ontario

To effect the actual division, the Family Law Act introduces the concepts of “net family property” and the “equalization payment.” For each spouse:

  • A balance sheet of assets/property as at the valuation date is created.
  • These assets are totaled to give a value.
  • From this figure is then subtracted a spouse’s debts and liabilities.
  • The value of property that a spouse brings into the marriage, with the notable exception of the matrimonial home, is also deducted from this figure.
  • The resultant sum is a spouse’s “net family property.”
  • The difference between the “net family properties” of each spouse is then calculated and the spouse with the higher “net family property” pays to the spouse with the lower “net family property” one half of the difference.

This payment is referred to as the “equalization payment.” If a spouse wishes to claim a deduction with respect to any property, it is that spouse’s responsibility to produce evidence supporting his or her entitlement to the deduction. A spouse sets the equalization process in motion by making an application to the court, which must be initiated within a certain time frame. Generally a spouse must seek the division within 2 years after the Final Divorce Order or six years after the day the parties separate.

The Matrimonial Home

As noted, the matrimonial home is afforded special treatment. A matrimonial home brought into the marriage will not be included in a spouse’s date of marriage deductions. Nor will a matrimonial home received as an inheritance or gift from a third party during the marriage be considered as an allowable exclusion.

A matrimonial home is defined as “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 broad definition includes properties such as cottages and trailers and indeed allows for more than one matrimonial home at any given time. The special status attributed the matrimonial home is also confirmed in Part II of the Family Law Act that sets out certain possessory rights in the home regardless of actual legal title that cannot be overridden by contract.

The Act acknowledges that a married couple may wish to organize the division of its assets in its own peculiar fashion. A couple can achieve this by preparation of a domestic contract. The Act specifically allows for property contained within a domestic contract to be excluded from a spouse’s net family property.

Common-Law Couples & Property Division

Erroneously, many common-law couples believe this statutory scheme respecting property division governs their relationships as well. A 2002 decision of the Supreme Court of Canada (Nova Scotia v. Walsh [2002] 2 S.C.R. 325) made it quite clear that this is not the case. The case centered on the exclusion of common-law partners from the definition of spouse, which it was argued constituted a violation of the equality rights protected by the Charter of Rights and Freedoms. The decision, by drawing a bright line between couples who chose to cohabit but not marry and those who chose to marry, confirmed that the narrow definition of spouse found in the Family Law Act is constitutional.

Thus, for couples in a common-law partnership in which legal title to property is not held jointly yet one spouse believes he or she should be entitled to an interest in the property, no protection is provided under the statute. In such cases the spouse may, however, resort to trust law principles that have been imported into family law. These principles essentially recognize interests in property on the basis of fairness, which is much more expensive to litigate.

Creative Solutions for Your Property Disputes

No two property disputes are the same, and our Ontario divorce lawyers therefore take care to deliver individualized representation to every client we assist. With our considerable family law experience, we can help you develop creative solutions for your property dispute, to protect your concerns.

Call our offices at (905) 581-7222 for more information and guidance.

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    Andrew Feldstein

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    Andrew Feldstein graduated from Osgoode Hall Law School in 1992. Prior to focusing exclusively on family law, Andrew’s legal practice covered many different areas, including corporate commercial. One of Andrew’s fundamental objectives is to achieve those goals mutually and collaboratively, as set out by him and his client.

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    Deleta Grandy

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    Deleta Grandy obtained her Bachelor of Arts in Legal Studies at the University of Ontario Institute of Technology in 2012, where she graduated with Honours. She completed her legal studies at Western Law School, graduating with a Juris Doctor in 2016.

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    Jeff Hart

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    Jeff obtained his Honours Bachelor of Arts degree in Classical Studies from McMaster University before attending law school at Queen’s.

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    Daphna Schwartz

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    Location: Markham Daphna Schwartz joined Feldstein Family Law Group, P.C. in 2007 as an associate lawyer. She was previously ...
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    Nick Slinko

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    Location: Vaughan Nick Slinko attended York University from 2003 until 2007 where he majored in both Law & Society and ...
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    Anna Troitschanski

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    Anna Troitschanski joined the team at Feldstein Family Law Group, P.C. in 2012. Prior to that, she practised Family Law at a boutique Newmarket firm. Her experience covers all areas of divorce and family law, including custody and access, child support, spousal support, and division of property.
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    Veronica Yeung

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    Veronica Yeung joined the Feldstein Family Law Group, P.C. as a summer student in 2014 and returned as an articling student in 2015. Following her call to the Ontario Bar in June 2016, Veronica was welcomed to the team as an associate lawyer.

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    Shana Gordon-Katz

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    Shana joined Feldstein Family Law Group P.C. as an articling student in 2017. Following her call to the Ontario Bar in June 2018, Shana was welcomed back to the firm as an associate. While completing her articles, Shana assisted with legal matters covering all areas of family law.

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    Shazia Hafiji

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    Shazia Hafiji joined Feldstein Family Law Group P.C. as a summer student in 2016 and returned as an articling student in 2017. Following her Call to the Ontario Bar in 2018, Shazia returned to the firm as an associate lawyer.

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    Lucy D'Ercole

    Lawyer

    Lucy D’Ercole joined Feldstein Family Law Group P.C. as a summer student in 2017 and returned as an articling student in 2018, during which she gained valuable experience in all areas of family law. Following her call to the Ontario Bar in 2019, Lucy was welcomed back to the firm as an associate lawyer.
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    Joy Pura

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    Joy Pura completed her legal studies and obtained a Juris Doctor at the University of Ottawa. Prior to that, she completed ...
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