Limitation periods regarding equalization of NFP
Hello, my name is Shana Gordon-Katz and I am an associate at the Feldstein Family Law Group. In today’s video, I will be discussing the impact of the Limitations Act on the equalization of Net Family Property only, as there are other deadlines for trust claims. If you are wondering what equalization of Net Family Property means, I encourage you to review our video blog entitled ‘Division of Property and Assets’.
The Limitations Act, in conjunction with the Family Law Act, states that a legal claim or defence may be prejudiced, or the parties’ rights lost entirely, if the claimant does not take the appropriate steps within certain time periods prescribed by law.
In particular, s. 7 of the Family Law Act sets out limitation periods that apply to equalization claims, i.e. property claims. Any claims you may have to an equalization of Net Family Property under the Family Law Act, will be barred by the passage of time if you do not start court proceedings within the prescribed time periods. This simply means that if you do not take action within a specified time period, you may lose your rights entirely to an equalization payment.
Pursuant to the Family Law Act, a claimant’s equalization claim may be barred if they do not commence proceedings by the earliest of the following dates:
- six years from the date the spouses separate without reasonable prospect of reconciliation;
- two years from the date of the Divorce Order; or
- six months after the first spouse’s death.
Often, people do not appreciate the importance of the limitation periods. If these time periods have lapsed, you may have lost your entitlement to an equalization of Net Family Property.
It is also important to consider the circumstance where spouses disagree about the date of separation, as this will impact the limitation period. The determination of the separation date is a question of fact to be determined based on the evidence. It is not uncommon for parties to disagree about when they separated, particularly if they continue to reside together in the matrimonial home. This is one of many reasons why you should speak to a lawyer once you have separated from your spouse.
Spouses who are approaching the limitation period also have the option of entering into a “tolling agreement”, wherein the spouses agree that the limitation period does not start running until one party provides notice. This can avoid the costs of commencing a court application, particularly where parties intend to work towards a negotiated settlement.
For more information regarding these limitation periods and how to ensure your rights are protected, please visit our website www.separation.ca or contact our office for a consultation at 905-581-7222.