After nine years of wedded bliss, Gladiator star Russell Crowe and his
wife, Dancing with the Stars contestant Danielle Spencer, are calling
it quits. The couple has two children, Charles and Tennyson, aged eight and six.
According to reports, Crowe and his wife had recently grown apart due to
his hectic lifestyle and heavy shooting schedule – the actor filmed three
movies in 2011 alone.
The silver lining in this case, namely the large payout owing to Ms. Spencer
is likely to provide some solace in the aftermath of her separation from
her movie star ex. If the online gossip community is to be believed, Crowe
is expected to pay Spencer approximately $32 million even before they
divide up the rest of their property, estimated at upwards of $48 million.
Surprisingly, the source of the actor’s fortune is not attributable
to his movie career alone. Rather, Crowe is reportedly an enthusiastic
entrepreneur, with investments in ventures ranging from a rugby team,
gym, and a meat company.
In any divorce, the
division of property is often most contentious issue to be resolved. Under Ontario’s
Family Law Act, divorce triggers the equalization of net family property. According to
s. 4(1) of the
Act, this term is defined as:
the value of all the property, except property described in subsection
(2), that a spouse owns on the valuation date, after deducting,(a) the spouse’s debts and other liabilities, and
(b) the value of property, other than a matrimonial home, that the spouse
owned on the date of the marriage, after deducting the spouse’s debts
and other liabilities, other than debts or liabilities related directly
to the acquisition or significant improvement of a matrimonial home, calculated
as of the date of the marriage;
From this definition alone, it is evident that the equalization of each
party’s net growth as experienced during the marriage is often neither
a simple nor a straightforward task.
In its simplest form, the calculation requires each party to add up the
value of all assets they owned at the date of separation, including pensions,
RRSPs, contingent interests, etc. (which may require professional valuation).
From this subtotal, the parties will subtract all debts owed as of the
date of separation and the value of all property, other than a matrimonial
home, that was owned by each person on the date of marriage.
In the result, the spouse with the higher net family property pays the
spouse with the lower net family property one half of the difference.
Unfortunately, the calculation as previously described does not even begin
to scratch the surface of complications that can arise in attempting to
ascertain each party’s net growth during the marriage.
For example, certain assets like inheritances may be excluded from the
total value of assets owned at the date of separation if certain conditions
are fulfilled. Similarly, the matrimonial home, which has a very specific
definition under family law legislation, receives remarkably unique treatment
from other assets in the equalization calculation.
Clearly, it is in the interests of both parties to retain counsel and experts
to ensure that the equalization is accurate, equitable and just. In the
soon to be former Mrs. Russell Crowe’s case, we are confident that
she will leave the tough stuff to the pros while she awaits the large
settlement she is expected to receive.