calculation

When a marriage breaks down, an equal contribution of each party to the marriage is recognized as marriage is seen as an equal economic partnership. The value of any property a spouse acquires and continues to exist when the parties separate is divided equally between them. The Family Law Act states one-half of the difference in each parties value is owed to the spouse with lesser value. A Net Family Property (NFP) document is required to begin the calculations for the division of property. To determine your NFP, each of you will have to combine all your assets and then subtract your debts from them (both values are from the date of your separation).

The person with the highest NFP owes their soon-to-be-ex half of the difference between their two figures. The difference is your equalization payment.

exclusion

Upon the dissolution of a marriage in Ontario, in the eyes of the law, each spouse’s contribution to the marriage is taken into account. Any property acquired during the marriage that still exists at the end of the marriage must be divided equally. 

However, this is not a steadfast rule; multiple exceptions apply to property when determining what property is to be divided in the course of divorce. Gifts and/or inheritances received before or throughout the marriage from a person that is not the other spouse, that is not used towards the matrimonial home, can be considered excluded assets and property and will be excluded from an equalization payment. The value of insurance proceeds, trust property and any real property one person owned before getting married or living together is also excluded.

division

When you are separating or getting divorced in Ontario, the property that you acquired during your marriage must be divided equally.

If your spouse owns property or assets that are worth more than your property or the assets that you own, they must pay you or give you half of the difference in value between their property and your property/assets to help ensure that both you and your spouse are leaving the marriage on equal footing. 

It is important to note that the automatic property sharing provisions only applies to parties that are legally married. The equalization process does not apply to common law spouses; however, they are entitled to other forms of payment.