Division of property is a topic that’s often spoken about, whether jokingly before a marriage or during a divorce. But is saying “I do” really another way of saying “I do agree to give you half”? Let’s talk division of family property and how it works during times of separation.
Understanding Family Property
When discussing family property, lawyers are referring to any property that is acquired in a specific window of time, from the date of marriage to the date of separation. Family property does not concern itself with who acquired the property, but rather whether it still exists at the date of separation. Any property acquired after the date of separation is not considered family property.
Generally, the date of marriage is easily evidenced by a marriage certificate. However, the date of separation can become hotly contested as assets and liabilities can change greatly day to day. Knowing and being able to evidence your date of separation is very important.
The Significance of Valuation Date
For most people, the valuation date is the date of separation where there is no reasonable prospect of reconciliation.
Understanding the Net Family Property Calculation
In a divorce, each party is entitled to one half of the value of the net family property. The net family property is the value of all assets less any liabilities at the date of separation. The entitlement is to the value of the property, and not the property itself.
A Net Family Property Statement is used to determine whether either spouse owes an equalization payment. An equalization payment is made if someone’s assets are larger than the other. Ultimately, the goal is to ensure that each party leaves the marriage on equal footing.
If someone chooses to keep the home, or any specific asset, generally this is accounted for, and property or money is exchanged to ensure an equal division between the spouses. It is a common misconception that one spouse (generally the wife) will get to keep everything for no consideration. Ultimately, the objective is to ensure an equitable departure for each party following the conclusion of the marriage.
What is the matrimonial home and why is it so important?
Property division is governed by the Family Law Act (“FLA”). The Matrimonial Home is treated uniquely under the FLA. This is because when calculating the net family property, the matrimonial home is not given a date of marriage valuation. This means that if one partner owned the matrimonial home prior to the marriage, they do not get any credit for the value they had in the matrimonial home at marriage. Similarly, if someone had assets that were converted into the matrimonial home, they will not get any credit for these assets either.
Claiming a Division of Property: Time Limitations
A claim for equalization of net family must be made within the earliest of:
- Six (6) months following a spouse’s death;
- Two (2) yearsfrom the date of divorce; or
- Six (6) years after the date of separation.
At PJKJ Law, we understand the intricacies of family property division and the emotional weight it carries. We’re here to guide you through this challenging time. Give us a call at 905-523-6464 or email info@pjkjlaw.ca.
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