To divide property, the parties must establish their assets and debts on the date of marriage and the date of separation. Subject to some exceptions, the parties split any change in the value of this property.
This requires calculation of Net Family Property (“NFP”). Meaning the value of assets and debts on the marriage date, subtracted from the value of assets and debts on the date of separation. These calculations involve an understanding of many rules and exceptions. As a result, the lawyer must work with the client to understand the unique features of the case. After taking them into account most lawyers then use software to finalize the NFP calculations.
Special rules apply to the matrimonial home. Often the parties must split its marriage date value, even if one party owned it prior to the marriage. Please see more information about the matrimonial home here.
After calculating NFP, the parties split the difference by way of an “Equalization Payment”. This generally means the party with the higher NFP pays half the difference to the party with the lower NFP. This can happen by way of a property transfer, by one party keeping certain assets, or by a transfer of funds.
NFP often includes the following items:
Items that do not usually fall under NFP include:
In addition, spouses may seek unequal division of matrimonial property if a marriage has lasted less than five years, or in other rare cases such as fraud or unconscionable conduct by one spouse at the expense of the other. This rarely happens since the threshold to obtain unequal division is high.
These lists are not exhaustive. Contact us should you have any questions about the way property is divided in Ontario.
