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Divorce or separation: division of property - who gets what?

Divorce or separation: division of property - who gets what?

The most complicated and contentious question that arises when a couple divorces or separates is ‚Äúwho gets what?‚ÄĚ While the decision can sometimes be left to the discretion and negotiation of the two parties involved, there are also legal guidelines governing the division of property. This is especially useful on those occasions when the couple struggles to reach a settlement. Let‚Äôs review the most common matters that arise around division property after a divorce or separation.

What is marital property?

Marital property - sometimes called matrimonial property - refers to assets acquired by both partners before or during the marriage. The most important example of marital property is the matrimonial home in which the couple lives. However, it includes a lot more than that as well. The term also encompasses the content of the home - furniture, appliances, etc. It can also include pensions held by either spouse or the debt that either one might owe.

When does the law divide property?

The laws governing the division of property differ between the various provinces and territories. In general, however, laws require that all marital property should be divided equally between the spouses, and all assets that each partner brought into the marriage separately is theirs to keep. The matrimonial home is the only exception - in this case, it does not matter which of the two spouses is the legal owner of the property; it must be divided equally regardless of whether one of the spouses owned it alone prior to the marriage, or both partners have their names on the title deeds. These general laws are applicable after any divorce or end of a common-law relationship. It is not always necessary to take the matter to court, however. In most cases, the division can be carried out by the partners and their legal representation, using the laws as a guideline.

Factors relevant to division of property

In order to determine the appropriate division of assets, each partner is required to account for all the assets and debts they have accumulated over the course of the marriage. The net value of each spouse’s property is then deducted from the net value on the date of separation in order to determine each partner’s net family property. If one spouse has more net family property than the other, that spouse is required to pay one half of the difference between the two net values to the other spouse.

Division of pensions

Pensions are regarded as family property, which means that each spouse is entitled to a share of the benefits. However, the division is not always a straight 50/50 split. It is best to speak to your pension administrator. In the case of the Canada Pension Plan (CPP), a credit split is carried out, giving each partner one-half of the credits accrued during the years of marriage.

Division of debts

All family debt is to be divided equally between the two partners, except if an alternative agreement has been reached beforehand. Family debt includes all debt taken on by both spouses or either spouse during the marriage. These could include mortgages, credit card debt, income tax, loans, and overdrafts.

What is excluded property?

Any property that either partner-owned prior to the marriage is excluded from family property and can be kept by the partner in question. Excluded property is not included in family property and so does not have to be divided. Other excluded property includes gifts or inheritances awarded to only one of the spouses as well as any and all property owned by each individual spouse prior to the marriage - with the exception of the matrimonial home.

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