Dividing Marital Property in Ontario What You Need to Know

1. 2024-10 Dividing Marital Property in Ontario: WhatYouNeed toKnow DivorceGO.ca

2. WhatisConsideredMaritalPropertyinOntario? • In Ontario, marital property includes almost everything acquired during the course of a marriage, regardless of whose name it’s under.TheFamilyLawActensuresthateachspouseisentitled to anequalshareofthe valueoftheseassetsuponseparation. • However,certain nuancesapplydependingonthe nature ofthe assets,ownershipstructure,andliabilities involved. • Types of AssetsConsideredMarital Property • Whendividingmaritalproperty,thefollowingtypesofassets typicallyfallundertheumbrellaofmaritalproperty: • The MatrimonialHome:In Ontario, the matrimonial home holds a specialstatus.Regardless ofwhen the home was acquiredor whosename isonthetitle,bothspouses have an equal right to live in thehome and shareitsvalue upon separation. Even if one spouse owned the home prior to themarriage,itis treatedasmaritalproperty. • Investments: Anyinvestmentaccountsorstocksacquired • during the marriage are considered marital property and subjectto division.Iftheinvestmentswerepurchased before the marriage butgrewin valueduringthemarriage, the increasedvalueis alsosubjectto division. • RetirementAccountsandPensions:Retirementaccounts, including RRSPs and pensions, are considered marital property if contributions were made during the marriage. These assetscanbe complextodivide,especiallyifthe

3. accounts are tied to employment benefits or future pension payments. • Personal Belongings:Personalassetssuchasvehicles, art collections,jewelry,and evenhousehold goodsacquired • duringthe marriagemayalso beconsideredmarital property,dependingon their value and usage. • Excluded Property: What’s Not Considered Marital Property • Items That AreExcluded FromMaritalProperty • While most assets acquired during the marriage are considered marital property and subject to division, there are specific exceptionsoutlinedinOntariolaw.Thefollowingitemsare typicallyexcludedfromtheequalizationprocess: • Inheritances: If a spouse receives an inheritance during the marriage andkeepsitseparatefrommaritalassets,it is generally considered excluded property. However, if the inheritanceisusedtopurchasejointlyownedproperty, such asthematrimonialhome,itmayloseitsexcluded status. • Gifts:Similar toinheritances,giftsfromthirdparties toone spouse areexcludedfrommarital property.Thisexclusion appliesonlyifthegiftisnotco-mingledwithjointlyowned assets orusedformarital purposes. • Pre-Marital Assets: Assets acquired by a spouse before the marriage are also excluded fromequalization,with one

4. significantexception:thematrimonialhome.Even ifone spouseownedthematrimonialhomebeforethemarriage,it is treatedasmaritalpropertyandsubjectto division. • Damages or Settlements for Personal Injury: • Compensationreceivedfor personalinjuries,such aspain and suffering,isusuallyexcludedfrommaritalproperty. However,ifthesettlementincludescompensationforlost wages ormedicalexpensesincurredduringthemarriage, these amounts maybe subjecttodivision. • Division oftheMatrimonialHome • TheSpecialStatusoftheMatrimonialHomeUnderOntario Law • In Ontario,thematrimonialhomeistreateduniquelyunder familylaw,anditsstatusplaysasignificantroleinproperty division. According to the Family Law Act, the matrimonial home is any property that was ordinarily occupied by the spouses as their family residence at the time of separation. This specialstatusapplies whetherthehomeis ahouse, condo,or • evenacottage,provideditservedasthefamily’smain residence. • The matrimonial home is uniquebecause: • EqualRightofPossession:Bothspouseshave anequal right toliveinthematrimonialhome,regardlessofwhose nameis on the titleor mortgage.This rightexistsevenif one spouseownedthepropertybeforethemarriage.

5. NoExclusionforPre-MaritalOwnership:Unlikeother assets,thevalueofthematrimonialhomeisnotexcluded fromdivision,even ifonespousebroughtitintothe marriage.The entire valueofthe homeis included inthe equalization ofproperty,meaningboth spousesareentitled to shareinitsvalue uponseparation. • HowtheMatrimonialHomeisDivided,regardlessof Ownership • Oneofthemostimportantaspectsofdividingthematrimonial homeisthatownershipdoesnotdictatehowthehomeis divided.UnderOntariolaw,bothspousesareentitledtoan equal shareofthe valueofthematrimonialhome,regardlessof who legallyownsthepropertyorwhosenameis onthetitle. • Equalization Process: When dividing the value of the matrimonialhome,theequalizationprocessapplies.This means that thenet value ofthe homeisdivided equally between bothspouses.Ifthe homeissold,theproceedsare splitequally,unlesstherearespecialcircumstancesthat warrantanunequaldivision. • PossessionoftheHome:Eventhoughbothspouseshave • an equalright topossessthematrimonialhome,one spouse may remain in the home after the separation, particularly if therearechildreninvolved.Insuch cases,thecourt may grantexclusivepossessiontoonespouse,whichdoesnot • affect thedivision ofthe home’svalue butdetermineswho has therighttolivein thehometemporarily.

6. ImportanceofDeterminingOccupancyRightsand OwnershipafterDivorce • Determiningwhogetstostayinthematrimonialhomeandwhat happenstothepropertyafterdivorceisakeyissuefor separatingcouples.Thefollowingconsiderationsarecrucial: • Occupancy Rights: Both spouses have equal rights to live inthe matrimonialhome,even after separation.However, insomecases,thecourtmaygrantonespouseexclusive possession ofthehome.This decisionisoftenmadein the best interests of the children if they are involved. It is importanttonotethatexclusivepossessionistemporary • and does not affect ownership or the division of the home’s value. • SellingorBuyingOut:Inmanycases,thematrimonial • home is sold, and the proceeds are divided equally between thespouses.Alternatively,onespousemaychoosetobuy out the other’s share of the home. This allows one spouse to keep the homewhilecompensatingthe otherfor their share of the property’s value. The decision to sell or buy out depends on various factors, including the financial situation of both parties and whether the home is necessary for maintainingstabilityfor anychildreninvolved. • Ownership After Divorce: If one spouse buys out the other’s shareofthe matrimonialhome,thetitletothe property will be transferred solely to that spouse. Ownershipafterdivorceistypicallyformalizedthrough legaldocumentation,ensuringthat thespousewho retains the homeholds clearlegaltitle.

7. DisputesoverMarital Property:HowtoResolveConflicts • CommonDisputesThatAriseDuringthe DivisionofMarital Property • Severaldisputes frequentlyoccurduringthe division ofmarital property,whichcancomplicatethe separationprocess.These conflictsoftenarisedueto differingperceptionsofownership, valuationofassets,oremotionalattachmentstospecific property.Someofthemostcommonissuesinclude: • Valuation ofAssets:Disagreementsoftenoccuroverthe valueofmaritalassets,particularlywhenitcomestohigh- valueitemssuchasrealestate,businesses,orinvestment accounts. Spouses may have different opinions on how muchanassetisworth,especiallyifitsvaluehasfluctuated overtime. • Ownership Disputes:Eventhoughmostassetsacquired duringthe marriage areconsideredmaritalproperty, disputes mayarise overwhether certainitems should be included in the division. One spouse may claim that an asset is personal property or should be excluded due to its pre-marital orgiftedstatus. • EmotionalAttachments:Certainassets,suchasthefamily home,heirlooms,oritemswithsentimentalvalue,can trigger disputeswhenbothspouseswishtoretain ownership.Theseemotionalattachmentscan makeit difficulttocometoafairagreementonwhoshouldkeep the propertyorhowit shouldbedivided.

8. Debt Division:Disputescanalsoariseoverwhois responsibleformaritaldebts.Spousesmaydisagreeonhow liabilities such as credit card debt, loans, or mortgages shouldbedivided,particularlyifonespousefeelstheydid not benefitequallyfromthedebt. • RoleofMediationandArbitrationinResolvingProperty Conflicts • When disputes over marital property arise, mediation and arbitration aretwoalternative disputeresolution (ADR)methods thatcanhelpspousesresolveconflictswithoutgoingtocourt. • These approaches offer a more flexible and less adversarial way to settle disputes, often leading to quicker resolutions and lower legalcosts. • Mediation: Mediation involves a neutral third-party mediatorwhohelpsthe spousescommunicateand negotiate afairagreementregardingthedivisionoftheirproperty. Themediatorfacilitatesdiscussionsbutdoesnotmake decisions for the parties. Mediation is particularly effective when bothspousesarewillingtocooperateandwork toward a mutual solution.InOntario, mediation can be voluntary or court-ordered, and it often helps to avoid the emotional andfinancialstrain ofalengthycourt battle. • Arbitration: Arbitration is a more formal process than mediationbutstillprovidesaprivateandefficientwayto resolve propertydisputes.In arbitration, both spouses present theircasetoanarbitrator,whothenmakesa binding decision on how the marital property should be divided.Thearbitrator'sdecisionisenforceable,similarto

9. a courtorder,buttheprocessistypicallyfasterandmore flexible than goingthroughthe courts.Arbitration isagood optionwhenthespousescannotagreeonkeyissuesand need adefinitive resolution. • WhenCourtInterventionIsNecessaryto SettleProperty Disputes • Whilemediationandarbitrationareeffectiveformanycouples, therearesituationswherecourtinterventionbecomesnecessary to resolve disputes overmaritalproperty.In Ontario,the court mayberequiredto settlepropertyconflictswhen: • Mediation or Arbitration Fails: If attempts at mediation or arbitration do not result in a resolution, or if one spouse refuses to participate in good faith, the case may need to go to court. The court will make a legally binding decision on the division of property based on Ontario’s Family Law Act. • ComplexFinancialSituations:Incasesinvolving complicatedfinancialarrangements,suchasbusiness ownership,significantinvestments,orhiddenassets,court intervention may be necessary to ensure a thorough and equitable division of property. Courts have the authority to orderfinancialdisclosuresand conductin-depth investigations ifnecessary. • Domestic Violence orPowerImbalances:In situations • wherethereisahistoryofdomesticviolenceor a significantpowerimbalancebetweenthespouses,thecourt may need to intervene to ensure that one spouse is not unfairlydisadvantagedduringthepropertydivision

10. process. The court can provide protections and ensure that the divisioniscarriedoutfairlyandsafely. • Non-CompliancewithAgreements:Ifonespousefailsto complywithapreviouslyagreed-uponpropertydivision, • suchasnottransferring assetsorrefusingtoselljointly ownedproperty,the courtcan stepinto enforcethe terms • oftheagreement orimpose newtermsifnecessary. • VisitDivorceGoLawFirm • VisitDivorceGOforexperiencedteamoffamilylawyers,ready to assistyou. • ForpersonalizedassistanceinToronto,visitusat45Sheppard Ave E, Suite#500, orcallus at(416)792-5400. • InMississauga,youcanfindusat2RobertSpeckPkwy,Suite #750,orreachoutbyphoneat(905)949-1717.