What is Considered Marital Property?

The law on marital property division in Ontario can be very complicated, and is often misunderstood. For this reason, it is usually advisable to seek assistance from a specialized Toronto divorce lawyer. This can save you a great deal of needless stress.

What is Regarded as Marital Property?

Marital property really requires a good set of family lawyers. When a marriage breaks down, what is regarded as marital property to be divided is governed by the Family Law Act, 1990. What is to be shared is the total value of the property which has been built up during the marriage, and which is still held at the time of separation. This is termed net family property, or NFP.

There are some possessions acquired after the marriage which the law allows you to keep without having to share them, and these come under the heading of excluded property. Examples of excluded property include:

• Any personal gift from someone other than your spouse;
• Property you may have personally inherited during the marriage;
• Proceeds of a life insurance policy made in your favor, if the insured person has died;
• Any compensation you may have been awarded for personal injury, such as a car accident.

The marital home, however, does not become excluded property, even if one of you owned it before the marriage, or inherited it or received it as a gift during the marriage.

How is Marital Property Division Arranged?

Under Canadian law, a marriage is seen as a totally equal partnership. Therefore, when the marriage ends, each party is regarded as having made an equal contribution to the net family property, including the home, regardless of whether either or both parties earned an income, or stayed at home to care for the home and children. The principle is therefore that everything that is classed as net family property should be divided strictly on a 50-50 basis.

This is carried out as follows:

• Each party calculates the value of the property he or she owns at the date of separation. For anything owned jointly, half the value goes on each list.
• The value of any debts owed is subtracted from each total.
• The value of excluded property is subtracted.
• The value of any property brought to the marriage is subtracted, apart from the marital home.
• The final totals are compared, and whoever owns the larger amount pays 50% of the difference to the other party. This is called an equalization payment.

Why Dividing Family Property is Complex

There are some circumstances in which the court could agree to divide property in a different way, for instance if it is considered that a 50-50 split would be unfair. There could also be other rules or exceptions, which might apply to your particular case. Fine & Associates can provide advice on all the different aspects of marital property division, and help you ensure that your final settlement is fair and satisfactory.