Good or bad. A new beginning or an ending, divorce is always an emotional time. One of the most pressing questions is how will we divide our property?
In Canada each province and territory is responsible for laws regarding division or equalization of family or marital property. The following blog is a general overview to give a basic understanding of property division in Ontario. Of course, legal advice and, or, representation is strongly recommended.
In Ontario laws governing divorce & division of property falls under the Family Law Act. Under the Family Law Act each spouse is considered equal. This means that regardless of your contribution, whether you were the main source of financial support or you stayed home, you have the same legal rights to remain in the home and receive an equal portion of the division of the matrimonial home. Other assets are excluded and will be discussed later in this blog.
First we need to define the matrimonial home. The matrimonial home is very specific. The Family Law Act defines a matrimonial home as every property in which either spouse has an interest and which is currently, or was at the time of separation, “ordinarily occupied by the person and his or her spouse as their family residence”. Under this definition you may have more than one matrimonial home. A cottage, for example, where you and your spouse spent time regularly as a family may be designated as a second matrimonial home. In this situation both matrimonial homes would be divided equally. Matrimonial status may change. For example, if you and your spouse had moved out of your family home and were renting it while living at the cottage then the cottage would become the single matrimonial home.
After the matrimonial home other assets are divided using Equalization Payment Calculations. These calculations take into account all assets from both spouses and deduct assets that you brought into the marriage, any gifts or inheritances, any legal or insurance payouts. Some gifts or inheritances may be excluded. The payments are based on “net family property” of NFP. Click on the link for a sample of the calculations http://nawl.ca/pdf/sample_calculation_en.pdf
Once you have the difference between your assets & debts the spouse with the larger amount now owes their spouse half of the difference as an equalization payment. Equalization payments due have a window. A claim must be started within 6 years of the date of separation or 2 years from the date of divorce.
It is important to specify the date of separation or valuation date. This date is very important as this will be the date that your home’s appraisal will be based upon as well it will be the starting date of the limitation period. This criteria for this date is based upon:
The date the spouses separate and there is no reasonable prospect that they will resume cohabitation;
The date a divorce is granted;
The date the marriage is declared a nullity;
To be considered separated you must be sleeping in separate bedrooms, not presenting as a couple socially, not eating together or speaking of yourselves as a couple.
The date one of the spouses commences an application based on subsection 5(3) (improvident depletion) that is subsequently granted;
The date before the date on which one of the spouses dies leaving the other spouse surviving.
Other factors to be noted are:
Each spouse, regardless of whether or not their name is on title, is allowed to remain in the matrimonial home. This means that you cannot restrict your spouse from the home. A spouse can apply to the courts for an order of exclusive possession. The court may decide in favour of exclusive possession if:
It is in the best interest of the children.
There is an existing order.
If there is a written agreement between the parties
There is available, suitable & affordable accommodations available for the other spouse
There is violence against the spouse or children.
The court may also take into consideration the financial position of the spouses.
Under the Family Law Act neither spouse can force the sale of the matrimonial home or mortgage it after the separation date. Of course, the courts will take into consideration an application if the spouse is not cooperative in selling the home and may order the uncooperative spouse to sell the home.
Please do remember that this is a very emotional point in your life. You will need professional advice and emotional support. Do not try to do this on your own. Reach out to your family, friends and the professional community to guide you through this difficult time.
Look for our upcoming blog on Common Law relationships in Ontario and how they differ when it comes to division of property.