How is property divided at separation in Ontario?

By Published On: September 12, 2022Categories: Family Law

One of the most common family law questions asked is about division of property in a divorce. At separation, the property is divided between married spouses in Ontario according to the rules set out in the Family Law Act. More specifically, married spouses are entitled to what is called equalization of net family property. These rules take into account the value of each spouse’s property, their contributions to the marriage, and any economic advantages or disadvantages either spouse may have as a result of the marriage. The division of property is intended to be fair and equitable, and to reflect the economic reality of the marriage. 

In general, property acquired by either spouse during the marriage is considered marital property and is subject to division upon separation. Marital property includes all property owned by either spouse, regardless of how the title is held. It also includes any debt incurred by either spouse during the marriage. 

Excluded property, on the other hand, is property that was gifted or inherited during the marriage (and any income or additional property derived from the same), damages for personal injuries, life insurance proceeds, and property excluded by a domestic contract such as a Marriage Contract or Cohabitation Agreement. Such property may be excluded from a division of property and equalization of net family property upon separation. 

Common law spouses are not subject to the same rules and in the event of a separation, the property is generally divided according to ownership.  

How different types of property are divided at separation in Ontario 

In the case of married spouses, the first step in dividing property at separation is to determine which assets and debts are marital property, which assets and debts are excluded property, and which assets and debts are held jointly and/or in one spouse’s name alone. Once this has been determined, the value of each asset and debt must be calculated. The value of the assets and debts must be calculated as of the date of marriage and as of the date of separation. The next step is to determine how the assets and debts will be divided between the spouses. This can be done through negotiation, mediation, or arbitration. If the spouses are unable to reach an agreement, they may have to go to court. 

Once the assets and debts have been divided, each spouse will usually be responsible for their own debts. However, in some cases, the court may order one spouse to pay the debts of the other. 

The division of property at separation can be a complex process. It is important to seek legal advice if you are considering separating from your spouse. A family law lawyer can help you understand your rights and obligations and can assist you in negotiating an agreement with your spouse. Contact Simard & Associates for legal services in Rockland and the Ottawa region. 

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