Property Division

What is Property Division in Family Law?

At Agha Law, we understand that property division is a critical aspect of family law, referring to the process of distributing assets and debts when a marriage or common-law relationship ends. In Ontario, the principle of equalization is followed, meaning property acquired during the marriage is generally divided equally between the spouses. This includes various types of assets such as the family home, vehicles, businesses, investments, and more. Debts accumulated during the marriage are also taken into account. However, certain exceptions and factors, such as prenuptial agreements, inheritances, and gifts, may influence the division of property. Our family law professionals and the court system play a crucial role in ensuring a fair and equitable distribution of assets and debts based on individual circumstances.

What is Property Division in Family Law?

At Agha Law, we understand that property division is a critical aspect of family law, referring to the process of distributing assets and debts when a marriage or common-law relationship ends. In Ontario, the principle of equalization is followed, meaning property acquired during the marriage is generally divided equally between the spouses. This includes various types of assets such as the family home, vehicles, businesses, investments, and more. Debts accumulated during the marriage are also taken into account. However, certain exceptions and factors, such as prenuptial agreements, inheritances, and gifts, may influence the division of property. Our family law professionals and the court system play a crucial role in ensuring a fair and equitable distribution of assets and debts based on individual circumstances.

What is Net Family Property?

Net family property (NFP) is the value of property accumulated by each spouse during the course of their marriage or common-law relationship. As defined by Section 4(1) of the Family Law Act, NFP includes all assets owned by a spouse on the valuation date, typically the separation date, after subtracting certain deductions. These deductions include debts, liabilities, and the value of property other than the matrimonial home that was owned by a spouse on the date of marriage. The calculation of NFP aims to determine the equalization payment owed to the spouse with the lesser value of property. NFP calculations may vary based on jurisdiction and individual circumstances, so seeking legal advice is recommended to navigate this complex aspect of family law.

Equalization

Among the legal rights of individuals seeking a divorce is the right to an equal share of the family’s property. This process is referred to as an “equalization” of “net family property” (NFP). Each partner’s NFP is calculated by subtracting their debts from their assets. Once the NFP is calculated for each spouse, the spouse with the lower NFP is entitled to one-half of the difference between the two amounts. However, the rights of common-law spouses differ from those of legally married spouses.

At Agha Law, we meet regularly with clients who require help figuring out how to split their property upon divorce. To ensure that our clients receive their fair share of the family’s assets, we begin each case by facilitating the exchange of financial disclosure between the parties to determine how much each party is entitled to receive.

Financial Disclosure

Exchanging detailed financial disclosure with your ex-spouse or their lawyer is extremely important as it provides a framework for determining which of the family’s assets and debts should be split and which should not. Not all property will be subject to sharing between the spouses. For example, if one of the parties receives an inheritance, that money may or may not be excluded from that party’s “net family property,” depending on how the funds were treated. Therefore, there are ways to protect certain funds from being split between the couple upon separation and divorce. Once we determine the amount for equalization for your particular case, we help you negotiate how the property will be divided according to your goals and interests.

Matrimonial Home

For many couples, the home in which they lived throughout their marriage will be their most valuable asset. The law provides for special treatment of the “matrimonial home.” Clients often wonder:

• Will I lose my right to the home if I move out?
• Can my former spouse kick me out of the house?
• Do I have any right to the home if my name is not on the title?

If you are contemplating separation and would like answers to these or similar questions, please contact Agha Law to schedule a consultation. At your Initial Consultation, you will meet with one of our lawyers who practice exclusively in family law and will receive information on your rights and obligations upon separation or divorce.

If you have already separated from or divorced your former spouse, you should seek legal advice immediately, as the Family Law Act places limitations on the time that a former spouse has to make a claim for equalization.