In Ontario, the law treats the marriage as a partnership and the partnership profits are spilt. Thus on separation each spouse calculates his/her net partnership profits by deducting the value of his/her assets at the date of marriage from the value of his/her assets at the date of separation. This increase is called the net family property (NFP). The spouse with the greater NFP will have to pay the other spouse one half of the difference between the two values. Certain property is excluded from this process such as assets inherited during the marriage. Timely and complete disclosure of a party’s assets and debts is critical in determining the property division after separation.
Division of Property for Married Couples
The Ontario Family Law Act details the specific laws in regards to division of property between married couples, including same-sex couples, who were legally married.
The division of marital property involves a specific formula to determine the net value. Basically, the value of all property acquired from the date of marriage until the date of separation is added up. All debts on date of marriage and date of separation are deducted from the parties' asset position. The difference in a person's property position from date of marriage to date of separation is called their "net family property".
The matrimonial home, which is defined as the family home at the end of the marriage, can be subject to specific rules. If a party owned the matrimonial home on the day of marriage, the value of the home on the wedding day is excluded from the spouse’s date of marriage property.
There are also special provisions with respect to "possession" of the home after separation, i.e., who will temporarily live in the home.
Division of Property for Common Law Couples
When a common law couple separates, the specific circumstances of the relationship will determine what, if any, property division results.
Where one party to the relationship has benefited in terms of increased assets or value of property through the contribution of the other party, there may be claims of unjust enrichment.
Legal advice is critical to know your options with respect to the division of property when a common law relationship ends.