Family Assets and Division of Property
When a married couple separates, they must share any increase in their money or property that occurred during the marriage. They also each have an equal right to continue living in the home they shared — regardless of whose name is on the deed or the lease.
What Counts as Property?
The term "property" may include a wide variety of items, such as:
- Your home, furniture, and other household contents
- Other real estate and land
- Pensions from employment
- Canada Pension Plan (CPP) credits
- RRSPs, TFSAs, and other registered accounts
- Investments, bank accounts, and cash
- Business interests and corporate shares
- Vehicles, art, and personal property
- Pets
Equalization of Net Family Property
Ontario does not divide all property equally — instead, it uses the equalization of net family property system. Each spouse calculates the difference between their net worth on the date of marriage and their net worth on the date of separation. The spouse with the higher "marriage gain" pays half the difference to the other.
The matrimonial home has special rules — it is always included in the equalization calculation regardless of who owned it before the marriage. There is no "exclusion" for a pre-marriage home if it was used as the matrimonial home.
Property Excluded from Equalization
Certain property may be excluded from equalization, including:
- Property owned before the marriage (except the matrimonial home)
- Gifts or inheritances received during the marriage (with some exceptions)
- Damages from personal injury claims
- Property specifically excluded by a valid marriage contract
Common-Law Couples
These equalization rules do not apply to common-law (unmarried) couples. If a common-law couple separates, each spouse generally keeps their own money and property. A common-law spouse may sometimes make a claim based on direct or indirect contributions to the other's property — these are referred to as trust claims.
Pensions and Retirement Savings
Pensions are part of a married couple's shared property. Since January 1, 2012, pension plan members required to pay a former spouse a settlement based on the pension's value can make some or all of the payment from the pension plan itself. The plan administrator values the pension — spouses do not need to hire an actuary.
Anna Boulman will explain all these factors and help you understand how they apply to your situation, ensuring your separation agreement or court order is structured optimally.