After a divorce, one of the most common questions you’ll ask is, “Who gets what?” Divorce can be a taxing process on its own, but if you add the challenge of figuring out a property settlement, the process can be much more difficult.
Although it can get overwhelming and confusing, the division of assets doesn’t have to be a painful process. To help you with your property settlement, below are some things you need to know about the division of property after separation or divorce.
Property in the Settlement Process
During property settlement, the process may include a variety of items, including:
- Your home
- Other real estates you own
- Furniture or other materials inside the property
- Pets
- Employment pensions
- Canada or Quebec Pension Plan credits
- Cash
- Registered retirement savings plans
- Investments
Below are properties that aren’t included in the settlement:
- Inherited property, except for the family home
- Assets that were gifted from someone other than your spouse
- The money you received from an insurance company after someone died
- Compensation as a result of a personal injury
- Other properties that you and your partner have agreed to exclude through an agreement
If you received the family home as a gift or as an inheritance, it isn’t considered an excluded property. If this is the case, the value of the home must be divided equally between you and your spouse, unless you both come to a different agreement.
If your home is situated on a large piece of property that is also used for other purposes, only the house and the small area around it are considered the family home. If your family home is located on a dairy farm, the whole farm wouldn’t be considered a part of the family home.
Property Settlement Rules and Process During Separation
One of the general rules is that you and your partner can keep the property you acquired before your marriage. The only assets that need to be divided up are the ones acquired during the marriage. Inherited assets are also excluded from the property to be shared.
Ontario law requires that the net value of the family patrimony must be divided equally in a divorce. Residences must also be valued and exchanged at fair market value.
During property settlement, you need to add up the value of your assets and divide it between you and your spouse.
Below are the steps to calculate what you might owe or be owed by your ex-partner.
- Add the value of the assets you owned as of the day you separated. Subtract the value of your debts and excluded property as of the same date.
- Add the value of all the property you owned on the day you got married. When your marriage ends, the value must be shared even if one of you owned the home even before you were married. Next, deduct all the debts you had as of the date of your marriage.
- Deduct the figure you get in Step 2 from the number you got in Step 1. This is your share of the value of the net family property. If the amount is negative, it is considered to be zero.
- Compare the value of your share to the value of your spouse’s share.
- Subtract the smaller amount from the larger amount, then divide the difference by two. This is the figure that the spouse with the bigger share must pay to the spouse with the smaller share.
Property Settlement in Different Circumstances
In Canada, couples in a common-law relationship can enter a cohabitation agreement. The document outlines terms once the relationship ends. These terms can include:
- How much spousal or child support has to be paid
- How assets are divided
- Who will keep the house the couple lived in
Division of property for common-law separations shares similarities with a property settlement process for a divorce. But, common-law couples aren’t mandated by law to split property they acquired when they lived together.
For common-law couples, the spouse who bought the furniture, household items, and other property can keep the items. If you paid your share to buy a property your spouse owns, you may have a right to a share of the property.
If you’re moving out, you’re entitled to get your contribution back. You may go to court if your partner refuses to pay you back.
Responsibilities of Parties Involved in Property Settlement |
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| The obligation of spouses for support | Every spouse must support themselves and their partner to the extent that they’re capable of doing so. |
| The obligation of the parent to support their children | Parents must support their unmarried child who,
A child sixteen years of age or older and has withdrawn from parental control may be excluded. |
| The obligation of a child to support their parent | Every child of age must support their parents who have cared for or provided support for them. |
If you’re unfamiliar with the property settlement process, don’t hesitate to contact the expert family lawyers from Gelman & Associates.
Property Settlement Agreement
If you and your partner cannot reach an agreement, then the court will determine the equalization payment.
You have six years from the day you separated or two years from the day your divorce is finalized to secure a decision on the amount of an equalization payment from the court.
Contact a Gelman & Associates Family Lawyer Today
The process involving a property settlement agreement can be easier if you know what steps you need to take. This can be helpful especially if you’re already stressed out by other legal hurdles that come with the separation process.
If you need legal advice regarding family law property settlement, call Gelman & Associates today. Our expert family law lawyers can help you make decisions regarding property settlement separation.
