Hello, and welcome to the Tailor Law Podcast, where we bring you practical, accessible, and legally accurate insights into family and divorce law in Ontario. I’m your host, and today we’ll dive into an essential topic for anyone navigating a divorce in Ontario: property division.
When a marriage ends, dividing property can be one of the most contentious and complex aspects of the separation process. The laws governing property division in Ontario are designed to ensure fairness while taking into account the unique circumstances of each couple. In this episode, we’ll explore how property is defined, the steps to calculate division, and some special considerations you should keep in mind.
Let’s start with the basics. Under Ontario’s Family Law Act, property is defined broadly. It includes real estate, personal items, bank accounts, investments, business interests, pensions, and even debts. Anything acquired during the marriage is typically considered for division. However, certain assets may be excluded, such as gifts or inheritances, provided they meet specific conditions. We’ll discuss those exceptions shortly.
The cornerstone of property division in Ontario is the equalization of net family property. This means that each spouse’s total net property is calculated at the date of separation, and the difference between their values is equalized. To do this, both parties must disclose their assets and liabilities as of three key dates: the date of marriage, the date of separation, and today. Full financial disclosure is not optional—it’s a requirement. Failure to disclose can lead to significant legal consequences and may result in a court order for unequal division.
Now, let’s unpack the concept of the matrimonial home. This is a unique category of property under Ontario law. Regardless of who owns it or when it was purchased, a matrimonial home is considered for equalization and cannot be excluded, even if it was a gift or inheritance. This reflects the idea that the home is a shared family asset, regardless of individual ownership. If you own multiple homes, such as a cottage or secondary residence, they might also be considered matrimonial homes depending on how they were used.
Next, we’ll address deductions and exclusions. While most property is included in the equalization process, some assets may be excluded. For example, gifts or inheritances received during the marriage can be excluded if they were not used for family purposes and remain traceable. However, if these assets were co-mingled with family funds, such as being deposited into a joint account, they might lose their exclusionary status.
Special considerations can arise in unique situations. For instance, if one spouse owns a business, the value of the business must be included in their net family property. Valuing a business can be challenging and often requires the expertise of a professional valuator. Similarly, pensions are another type of property that requires careful evaluation. Ontario law allows for pensions to be divided at the source, or their value can be equalized through other assets.
Another question we often hear is, “What happens to property located outside of Ontario or even Canada?” The answer is that foreign property is considered part of the equalization process. While an Ontario court may not have jurisdiction to order the sale of property in another country, its value can still be included in the division calculations.
Ontario law also allows for unequal division of property in exceptional cases. This might happen when one spouse has recklessly depleted assets, failed to disclose debts, or engaged in behavior that the court finds unconscionable. However, the bar for proving unconscionability is exceptionally high. The division must shock the conscience of the court—unfair or harsh circumstances alone are not enough.
Finally, we need to discuss limitation periods. In Ontario, you have six years from the date of separation or two years from the date of divorce to bring an equalization claim. However, courts may extend this timeline if there are reasonable grounds, such as evidence of significant undisclosed assets.
Dividing property can feel overwhelming, but you don’t have to navigate this process alone. At Tailor Law, we specialize in providing comprehensive legal guidance tailored to your unique circumstances. If you have questions about your rights or obligations under Ontario’s Family Law Act, we’re here to help.
Thank you for joining us on this episode of the Tailor Law Podcast. If you found today’s discussion helpful, please visit our website at TailorLaw.com for more resources, or contact us to schedule a consultation. Don’t forget to subscribe to our podcast for more episodes on family and divorce law. Until next time, take care, and remember—knowledge is power.