Division of Property2018-10-10T22:51:13+00:00

Division of Property 

Division of Property
Unequal Division
Matrimonial Home
Family Business

Division of Net Family Properties/Equalization Payment

The division of net family properties in Ontario is governed by the Family Law Act.

This legislation only applies to married individuals.  People who are not marriage – i.e. common law – ordinarily would be forced to make a trust claim to seek a payment for property from the other party.

In determining who gets how much for property in a marriage, parties must first exchange Form 13.1 Financial Statements.   These Financial Statements set out each party’s assets and debts on the date of marriage and date of separation.

In determining the final property payout, the matrimonial lawyer merges both parties’ Financial Statements into a document referred to as the Net Family Property Statement.

In family law, for the purpose of determining the final property payment between spouses (also known as equalization payment) we take a snap shot of all assets owned and debts owed as at the date of marriage and date of separation.

A spouse who brings in more assets into the marriage (not including the matrimonial home) will receive credit for his or her increased net worth in the final calculation of net family properties.

So what is meant by net family properties or equalization payment?

To determine the equalization payment, we first determine the difference in net family properties.  The equalization payment reflects half the difference in the spouses’ net family properties.

Net family properties is determined using the following formula:

(Date of separation assets)

Minus

(Date of separation debts)

Minus

(date of marriage assets minus date of marriage debts)

Minus

(excluded assets – meaning, property gifted by third parties, or inherited from third parties, which can be traced, aside from the matrimonial home).

To book a free consultation in Toronto or Mississauga, please call (416) 284-2354 or email us at reception@mlfamilylaw.ca

Unequal Division

In very rare cases, where it would be “unconscionable” the court can stray from the equal division of net family properties.

For example, if one party has significantly depleted the family’s net worth by incurring massive gambling debts, then the court may not award that party half of the financial fruits of the marriage.

To book a free consultation in Toronto or Mississauga, please call (416) 284-2354 or email us at reception@mlfamilylaw.ca

Matrimonial Home

The matrimonial home – meaning, the home in which the parties reside on the date of separation – is a very special asset in family law.

Specifically, both parties have the right to reside in the matrimonial home upon separation – even if the home is owned by just one spouse – until there is a court Order or agreement between the parties.

Where the parties cannot agree as to who will reside in the matrimonial home after separation, whether it be both parties, or just one party with the children, a party can bring a Motion to the court for Exclusive Possession of the Matrimonial Home.  Here, the judge will decide as to whether or not one party should be forced to leave the matrimonial home, allowing the other party to reside alone in the matrimonial home with the children.

If a spouse owned the matrimonial home on the date of marriage, he or she will not be given credit for the equity he or she had in the matrimonial home on the date of marriage.

If the matrimonial home is inherited or gifted by third parties, or if inherited or gifted funds go into the matrimonial home, then the spouse who received the initial inheritance of gift will not be permitted to exclude these funds in the calculation of the final property payment, also known as equalization payment, between the spouses.

To book a free consultation in Toronto or Mississauga, please call (416) 284-2354 or email us at reception@mlfamilylaw.ca

Family Business

Addressing the disposition of the family business can be a highly contentious issue.  Questions crop up such as who will run the business, will one party buy out the other or can the business be split?

Sometimes the family business is owned in both spouses’ names.  Sometimes it is owned in just one spouse’s name.  Sometimes it is owned with third parties or extended family members.  It may require a considerable amount of negotiation to decide the outcome.

Often the family business is the main source of the family’s earnings and, by extension, the source of future child or spousal support payments.  Personal expenses may go through the family business or there may be a significant cash component that must be taken into consideration when determining the income derived from the family business.

Valuing the family business may be challenging given that both parties may be contributing their skills and efforts to its operation. The parties may choose to retain a Business Valuator who can determine the market value of the family business.

Your family law lawyer will know how to read Business Financial Statements and determine what further disclosure is required to negotiate a fair outcome regarding the family business.

Mahdi Leite Family Law is here to advise and guide you through every step in the most cost-effective and timely manner.

To book a free consultation in Toronto or Mississauga, please call (416) 284-2354 or email us at reception@mlfamilylaw.ca

Make An Appointment

Mahdi Leite Family Law will provide you with the information and legal tools you need. To book a free consultation in Toronto or Mississauga, please call 416-284-2354 or email us at reception@mlfamilyLaw.ca

A new path lies ahead. Mahdi Leite Family Law will guide you.

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