Family Assets, Property Division & Equalization
When a married couple separates, the law requires that the financial growth accumulated during the marriage be shared fairly between spouses. This process is known as property division or equalization of net family property.
Family law focuses on ensuring that both spouses leave the marriage on financially equal footing, regardless of whose name appears on ownership documents.
How Property Is Divided After Separation
Under Canadian family law, married spouses must share the increase in value of their assets and property that occurred during the marriage.
Each spouse also has an equal right to remain in the matrimonial home, even if only one spouse is listed on the title, mortgage, or lease.
The goal is financial fairness — not necessarily splitting every item in half, but equalizing the overall value accumulated during the marriage.
What Counts as “Property”?
Property includes almost all assets owned by either spouse, such as:
- The family home (matrimonial home)
- Furniture and household contents
- Other real estate or investment properties
- Employment pensions
- Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) credits
- RRSPs and retirement savings
- Investments and securities
- Bank accounts and cash
- Business interests
- Vehicles and valuable personal items
- Pets (treated legally as property)
Both assets and debts are considered when calculating each spouse’s financial position.
These rules do not apply to common-law (unmarried) couples. If a common-law couple separates, each spouse usually keeps his or her own money and property and they divide things that they own together. A common-law spouse may sometimes be able to claim a share of the other spouse’s property or money, but this is not an automatic right as it is with legally married spouses. You may be entitled to a payment from your spouse to pay you back for a direct or indirect contribution to property that he or she owns. These claims are referred to as trust claims.
Pensions are also part of a married couple’s shared property. On Jan. 1, 2012, the law changed in how it deals with the value of pensions to make it easier for divorcing couples.
As of January 1, 2012, pension plan members who have to pay their former spouse a settlement based on the value of their pension plan will be able to make some or all of the payment from the pension plan itself. The pension plan administrator will also now be responsible for valuing the pension plan so that spouses do not have to hire an actuary to do this for them.
Anna Boulman will explain all these factors and help you understand them and also how they might be used to best structure your separation agreement or a court order.
Sources:
1. For more information about the property division laws in Ontario, see the publication:
Property division: Common-law couples
Property division: Married couples
Living together
Living together in a marriage-like relationship, but without getting married, is often called “cohabitation” or “living common-law”.
The law mostly treats common-law couples the same as married couples, except when it comes to property division and inheritance.