One of the most common questions that arise when people get divorced is, “How are assets divided in a divorce?” and “Who gets what?” If you are seeking a divorce in Ontario, the division of assets can seem complicated and confusing. Consider speaking with a family law attorney to explain the process of dividing assets in Ontario and help you understand your rights.
How Are Assets Divided in Ontario?
Ontario law requires divorcing couples to equally divide all of their assets acquired during the marriage. In other words, the value of property acquired by spouses during the marriage will be divided between the spouses 50/50 when parties get divorced. This is known as the right to equalization in Ontario.
In Ontario, courts use the so-called “property equalization scheme” to settle issues related to the division of assets.
What Property Is Divided Between the Spouses?
Any property acquired during the marriage is split 50/50 when the parties seek to end their marriage. Such assets are known as matrimonial assets. Common examples of matrimonial assets include:
Real property
Business
Automobiles
Pensions
Furniture
Money in bank accounts
What About the Matrimonial Home?
The matrimonial home – the home where spouses lived together before the dissolution of marriage – is treated differently by Ontario law. The Family Law Act assigns the matrimonial home a special status. Both spouses have equal access to the home even if either spouse purchased and owned the property before the marriage. The special status applies even if the spouse received the home as a gift or inheritance.
When determining who should keep the family home, the court will consider a multitude of factors, including the best interests of the child, the financial status of each spouse, the contributions made by the spouses, and others.
What Is Excluded Property?
However, Ontario law also allows spouses to keep the property that is rightfully theirs. Property that is not subject to the division of property is called “excluded property.” Examples include:
Any property that a spouse inherited before or during the marriage (the only exception is the matrimonial home);
Any property received as a gift from anyone other than their spouse;
Money received from insurance companies due to someone else’s death;
Money received from insurance companies as a result of a personal injury; and
Any property that the spouses agreed to exclude from the division of assets through a voluntary agreement.
As mentioned earlier, the matrimonial home is not treated as “excluded property” even only one spouse who owned it before the marriage or received it as a gift or inheritance.
How Are Debts Divided in an Ontario Divorce?
In Ontario, you are only responsible for the debts incurred in your own name. Thus, your spouse’s debts will not be assigned to you in the event of a divorce. This rule in Ontario offers peace of mind to many divorcing couples overburdened by debts.
If the names of both spouses are assigned to a debt, the debt will be divided 50/50 between the spouses in the event of divorce. However, there may be exceptions to the general rule to protect victims of financial abuse.
How Do Common-Law Spouses Divide Assets in Ontario?
The property division process is different for common-law spouses in Ontario. Ontario law does not allow persons to pursue an equalization claim when they are not legally married. However, common-law spouses can make an equalization claim if they made contributions to the other spouse’s property. Proving that a common-law spouse is entitled to their spouse’s property may require the assistance of a knowledgeable divorce lawyer.
Contact a Divorce Lawyer in Ontario
Seeking a divorce can be an emotionally taxing experience. Many people who consider filing for divorce do not understand their rights regarding the division of assets. If you want to understand how assets are split in an Ontario divorce, consider contacting Baker Doodnauth, a reputable and skilled divorce lawyer Newmarket. The divorce lawyers as Baker Doodnauth can review your particular circumstances and advise on the appropriate division of property in your specific case.