How Property Is Divided When a Marriage Ends in Ontario
In Ontario, married spouses who separate usually share the growth in their wealth during the marriage through an equalization payment. The rules are different for common-law partners. The process is technical and the deadlines are real.
- Equalization compares each spouse's net family property, which is the growth in value of what they own over the marriage, and the spouse with more pays half the difference.
- The matrimonial home gets special treatment, and both spouses have a right to possession of it, whoever owns it.
- Common-law partners are not entitled to equalization under the Family Law Act, but may have other claims, such as unjust enrichment.
- There are time limits, generally within two years of a divorce or six years of separation.
How equalization works
- Each spouse lists everything they own on the valuation date, which is generally the date of separation, and what they owe.
- Certain assets can be excluded, such as gifts and inheritances received during the marriage (with exceptions), and property owned on the date of marriage is deducted.
- Each spouse's net family property is the total value on the valuation date, less debts and the value of property owned at marriage.
- The spouse with the higher net family property pays the other half of the difference.
The matrimonial home
The matrimonial home is treated differently because of its importance to the family. Both spouses have an equal right to possess it, whoever holds title, and the value of the home generally is not excluded as a pre-marriage asset in the same way. Neither spouse can sell or mortgage it without the other's consent or a court order.
Pensions, businesses and complicated assets
- Pensions and business interests often need an expert valuation.
- Debts and taxes on assets can affect the amount.
- Some assets can be transferred between spouses to settle the payment rather than paying cash.
- Hidden or undisclosed assets are a common source of dispute, and each spouse must give full financial disclosure.
Common-law partners
The equalization rules apply to married spouses. Common-law partners generally do not get equalization when they separate. They can still make claims, such as for unjust enrichment, for a share of property they helped to build, and for support. These claims depend on the evidence and are less predictable.
Time limits
An application for equalization generally has to be made within two years after the day the marriage was ended by divorce or annulment, or within six years after the separation if there is no divorce, or within six months after a spouse's death. Missing the limit can lose the right, so act promptly.
Common questions
Do we need to go to court?
Not necessarily. Many couples agree on the division through negotiation or mediation and sign a separation agreement.
Does it matter who is at fault?
Generally not for property division. Equalization is a calculation, not a punishment.
Who can help. Family law is for lawyers. A licensed paralegal cannot represent you in family court, but can explain general ideas and refer you.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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