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What is the process for dividing property in a divorce or separation in Ontario?

When a couple goes through a divorce or separation in Ontario, Canada, one of the key aspects to address is the division of property. Property division involves the equitable distribution of assets and debts acquired during the marriage or common-law relationship.

In this article, we will explore the process for dividing property in a divorce or separation in Ontario, covering the key steps and considerations involved.

Identify and Classify Property

The first step in dividing property is to identify and classify the assets and debts owned by the couple. This includes real estate, vehicles, bank accounts, investments, pensions, businesses, and any other assets or debts accumulated during the marriage. Property is categorized as either marital or non-marital.

  • Marital Property: Marital property includes assets and debts acquired by either or both spouses during the marriage, regardless of who holds legal ownership. It is subject to division.
  • Non-Marital Property: Non-marital property typically includes assets owned by one spouse prior to the marriage or received as a gift or inheritance during the marriage. It generally remains with the owning spouse.
Valuation of Assets

The next step is to determine the value of the identified assets. This may involve obtaining professional appraisals or assessments for complex assets like real estate, businesses, or valuable personal property. The valuation process aims to determine the fair market value of each asset as of the date of separation.

Equalization of Net Family Property

Ontario follows the principle of equalization of net family property, which means that each spouse is entitled to an equal share of the increase in the total value of their net family property during the marriage. Net family property is calculated by subtracting the value of the debts and the value of pre-marriage assets from the value of the assets accumulated during the marriage.

The spouse with the higher net family property owes an equalization payment to the other spouse to achieve a 50/50 division. However, there are exceptions and deductions, such as the matrimonial home, gifts or inheritances received with specific conditions, or debts incurred recklessly or without the knowledge of the other spouse.

Negotiation or Court Proceedings

Once the net family property has been calculated, the spouses have the option to negotiate and agree on a division of assets without involving the court. They can work with their lawyers or mediators to reach a mutually satisfactory settlement. If an agreement cannot be reached through negotiation, the court may need to decide on the division of property.

Court Order

If the case proceeds to court, both parties present their arguments and evidence regarding the division of property. The court considers factors such as the length of the marriage, each spouse’s contributions, their respective financial positions, and the best interests of any children involved. The court then issues a final order that outlines how the property will be divided.

Implementation and Enforcement

Once a division of property has been determined, the final step is to implement the agreed-upon or court-ordered division. This may involve transferring property titles, changing account ownership, or executing other necessary legal actions. Parties are responsible for complying with the agreed terms or court order, and failure to do so can lead to enforcement measures.

It’s important for individuals going through a divorce or separation in Ontario to seek legal advice to understand their rights, obligations, and the specific process that applies to their situation. Each case can vary, and professional guidance can ensure a fair and legally sound division of property.