Things You Should Know About the Division of Property After Divorce in Ontario

May 6, 2021

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Canada had the 29th highest divorce rate — one out of every 309 adults are divorced — with a probability of .324%.

With so many people going through divorces every year, we can clearly imagine the amount of stress and challenges they must be going through due to the same. More so, when people are half or entirely unclear about the process and all the aspects related to the divorce.

When two individuals decide upon getting a divorce, there are many things that need to be taken care of before finally parting ways. That includes child custody, property division, and other financial settlings.

Property division is one of the most common and challenging aspects of all divorces since most of the couples get into a quarrel on who should be getting what amount of percentage in all the properties and are sometimes unaware of the country laws that can work in their favour/against.

That’s why we have put together this blog to guide you on how property is divided when a couple gets divorced in Ontario.

The question that triggers first to almost every couple that is opting for the divorce is “Who will be getting what and how much?” Right?

The divorce laws in Canada though are very clear, it can be challenging for some to understand. Since they fall under The Family Law Act, it ensures fair decision-making for the couples.

Ontario’s divorce law believes in equality and hence, everything that you and your partner have earned during the course of your marriage is equally divided between both of you. The equal amount that both the individuals will be receiving is calculated by Net Family Property (NFP) calculation.

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Form 13.1 is handed over to both the partners in order to put forward all the property details as well as the debt details, and the same is utilized for the NFP calculation. 

Thereafter, both the partners are as well asked to mention the list of properties that they had prior to the marriage, so it can as well be deducted from the NFP. So, if one of the partners is earning high or had mainly invested in properties prior to marriage, he/she is supposed to have a higher NFP.

And, that’s where The Family Law Act and its practice of equalization come into the picture. The partner with higher NFP owes the other partner half of the difference between their figures.

For instance, if one partner has his/her NFP of $2,00,000 and the other partner has an NFP of $50,000, then the difference  between the figures is $1,50,000. So, the individual with the higher NFP then pays a $75,000 equalization payment to another partner.

This fair approach is as well implemented in a debt calculation. Unlike other places, Ontario assigns the debts to both partners under their individual names. So, if you and your partner jointly share debts (if any), then you both need to split them post-divorce.

Such practices help people not falling victim to financial malpractices.

What about inheritance? Well, all the properties that are inherited before and during the marriage are not counted in your property division agreements. All you need to do is prove that it has been received as a gift, and you didn’t mix those funds with the joint funds.

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In case you mixed the funds, it might be a little challenging to showcase that you are an exclusive owner of it. 

Also, note that in case you used any of the funds from these inherited properties for financing your matrimonial home, you won’t be able to exclude those funds from the NFP. 

Yes, and the same applies if you and your partner had been living in any of your inherited homes. The inherited home then becomes a matrimonial home and cannot be excluded.

Are there any Exceptions?

There are times when couples do not want to divide their assets equally. In such cases, the court refers to it as ‘Unequal Division of NFP.’ To make this happen, the individual needs to properly show through strong evidence that why equal distribution should not take place.

Spouses who are victims of domestic abuse or any other kind of financial abuse can also demand an exception by providing the proofs to support their statements.

We hope that this article is helpful to you and will guide you rightly about the property division in Ontario post divorce.