How to Calculate Net Family Property in Ontario

For the purposes of providing divorced persons with equal assets, the courts may need the parties to calculate net family property in Ontario. The net family property (NFP) is the amount of each spouse’s assets minus that person’s liabilities and debts. By calculating this amount, the judge can then accurately award the lower income spouse with an amount of property or assets that will make his or her income equal to the other person’s. In Ontario, equalization of both spouses is the main objective for calculating NFP.

How to Calculate net Family Property in Ontario

The first step in calculating the net family property in Ontario is figuring out the valuation date. The valuation date is the date in which the marriage ends. It could be the date that the divorce judgment was granted, the date the two parties separated with no hope of a reconciliation, or the date that the marriage was annulled.

The valuation date is an important factor in the whole process because it captures the value of each spouse’s assets on that day. If either spouse accumulates property or monies after the valuation date, such will not be counted in that person’s property.

Property & Liabilities to Calculate net Family Property in Ontario

The next step in calculating NFP after determining the valuation date is creating a list of property and liabilities. Property includes items such as automobiles, motorcycles, bank accounts, stocks, bonds and the like. The debts and liabilities of each spouse will be deducted from his or her NFP. Additionally, the matrimonial home value will be split between the parties and added to each one’s NFP.

Items That are Exempt From NFP

The spouses may exclude certain items from their personal NFP. For example, a person who inherits property from a family member or third party can exclude such from the NFP. A person who receives a gift can also exclude that from the NFP.

Calculating Valuation Date Total

By subtracting the liabilities and debts of each spouse from his or her property value, the person will receive the valuation total. Next, the individual must calculate the marriage date total. To reach this total, each spouse will need to subtract all liabilities and debts at the date of the marriage from the property value at the date of the marriage. The result will be the marriage date total.

Finally, to uncover a person’s true NFP, the person needs to subtract each spouse’s “m” date total from the “v” date total. To equalize the property and finances of each spouse, the judge will award one of half of the difference between the two spouses’ NFP to the spouse with the lower income. For such a reason, it is extremely important to have a professional calculate net family property in Ontario.

Confused about how to proceed? Fine & Associates divorce lawyers and family lawyers will help you through the difficulties that lay ahead.