Divorce in Ontario: General overview on property division
Divorce in Ontario: General overview on property division
One of the most important parts of a divorce settlement is coming to an agreement on the division of property. If you are divorcing in Ontario, you probably have many questions about how your property will be divided. SplitEasy’s goal is to make the divorce process easy, which is why we have compiled this guide to property division. By addressing some of the myths surrounding divorce and offering clear guidelines on how to reach an agreement with your spouse, this overview will assist you in finalizing your DIY divorce.
How long is the divorce process in Canada?
Even if you and your spouse reach an agreement and draw up your settlement quickly, divorce is still a legal process that needs to follow the prescribed rules. The office of the Ontario Attorney General says that the average divorce in the province takes between four and six months, provided all your divorce forms are completed correctly, in the right order and on time.
Is there an advantage to filing for divorce first?
Although property division does not depend upon which spouse files for divorce first, being the one to file first does give you an advantage. If you file first, you can decide when the divorce will be adjudicated, control the schedule and direct the process. You also get the chance to present your case to a judge first. The disadvantage to filing first, however, is that you showcase your demands, evidence and arguments so that your spouse will see them and be able to develop a response.
6 myths about divorce in Canada
If you’re considering divorce, you may be making projections on the basis of generally held perceptions about divorce, many of which may not actually be true. If you believe any of these six common myths about divorce, it’s best to learn the truth before moving forward.
1.MYTH: “The court will be on my side because my spouse cheated on me. ”
There once was a time when courts sympathized with the person who was wronged in the marriage and considered that in deciding the outcome. However, this is no longer the case. According to the Divorce Act (a federal statute making divorce proceedings similar across the country), divorce and property division is treated as a ‘no-fault’ matter and courts do not make their decisions about the division of property on the basis of infidelity.
2.MYTH: “I can’t get divorced because my spouse won’t agree to a divorce.”
It is simply not true that you need your spouse’s agreement to finalize a divorce. If you have satisfied all the grounds for divorce and/or if you have been separated from your spouse for over a year, you can apply for a divorce and property division, with or without your spouse’s consent.
3.MYTH: “We don’t have to worry about dividing assets because we’re just common-law.”
In Ontario, once you have been in living together for three years, you are in a common-law marriage. Once you reach this point, your relationship has a legal status which is comparable to - though not identical to - marriage. The legislation grants common-law spouses support rights but not property rights. There may be a legal remedy to common-law spouses if one spouse made contributions to the other spouse’s property or business; but those claims are more challenging and generally require lawyers and court. The outcome will depend on several factors, including the contribution each spouse made to create that asset. Some cases need a lawyer. When a common-law spouse seeks property division, they need a lawyer.
4.MYTH: “I get to keep the matrimonial home because I bought it before I was married.”
Even if you are the sole owner of your matrimonial home and bought it before you got married, it will likely still be shared with your spouse under Ontario law. This law was created to protect married spouses who are not on title to their matrimonial home. A prenuptial agreement or a cohabitation agreement may protect your ownership of the matrimonial home.
5.MYTH: “If I move out of our matrimonial home, I’ll lose it in the divorce.”
Generally, moving out of your matrimonial home does not means you give up your right to ownership or occupancy of the home. However, if you do vacate your home, do not think that moving back will be possible or easy.
6.MYTH: “I’ll keep my pension and my ex will keep theirs if we get divorced.”
Pensions are counted alongside all your other assets and divided up accordingly. However, only the portion which accrued during the years of your marriage will be divided and shared. Any portion earned prior to marriage or after separation is yours alone.
What are my rights if I get separated or divorced?
When married spouses separate, each spouse is entitled to share the property accumulated during marriage. This right is called an equalization of net family property. This right only applies to married spouses.
Will I get financial support?
There are cases in which one spouse will be required to pay child support or spousal support to the other spouse. Whether you are married, or in a common-law relationship, the laws of support are the same. The laws for child support differ from the laws for spousal support. For one, child support is not taxable, whereas spousal support is tax deductible by the payer and taxable to the recipient. Child support is automatically payable upon separation, whereas spousal support will depend on a long list of factors such as the contribution and sacrifices made during the relationship. Child support usually ends when the children are no longer dependents. Spousal support can be shorter or longer in duration.
What about our property?
Unless you have a prenuptial agreement that specifies how property will be divided after separation, then the general practice is that each married spouse is entitled to 50% of the asset growth during marriage. An equalization payment balances out each spouse’s net family property.
How does divorce or separation affect Canada Pension Plan (CPP) contributions?
CPP contributions are dealt with through a practice called credit splitting. The credits that you and your spouse have accrued during your marriage are added up and divided equally between you. The Government of Canada provides a form that spouses can fill out and submit to split the CPP credits.
Is marriage considered an economic partnership?
Federal and provincial legislation treats marriage as a financial partnership. The key dates in this economic partnership are the date of marriage and the date of separation, which is usually the date on which one or both spouses decides to end the partnership, even if they continue to live in the same home. When this happens, each spouse is entitled to half of the accrued assets minus liabilities. The key point here is that only wealth that has been accumulated during marriage is divided.
Assets that each spouse owned separately before the marriage or after separation are not shared with rare exceptions such as a matrimonial home. The Family Law Act directs a division of property through the mathematical concepts of ‘net family property’ and ‘equalization payment.’ A balance sheet of assets is drawn up for each spouse as of the date of valuation. These assets are added up and any debts or liabilities are then deducted from the total, together with the value of any property minus debts or liabilities that each spouse brought into the marriage, except for the matrimonial home.
The final figure is each spouse’s net family property value. The difference between the net family property values of each spouse is calculated and the spouse with the higher net family property value must pay the difference to the other spouse. The sum owed to the spouse with the lower net family property value is called the equalization payment.
Common-law couples & property division
If you are in a common-law relationship, the rules governing the division of property are very different from those applied to married couples. Some cases need a lawyer. When a common-law spouse seeks property division, they need a lawyer.
Ease the process with SplitEasy
Divorce is hard, but the process doesn’t have to be. SplitEasy can provide you with the cheapest and easiest divorce process in Ontario. If you choose a DIY divorce, a divorce without the help of a lawyer, and you are not sure how to proceed, which divorce forms you need and how to complete them, and what steps to take once the paperwork is done, SplitEasy’s simple online solution is for you. Start the process by telling us whether you are in court or out of court, asking us which divorce forms you need, and allowing us to customize your divorce forms within 72 hours and tell you what you need to do next. For the most affordable divorce in Ontario, contact SplitEasy.