Providing Equalization, Assets & Liabilities in Brampton
Property values and investments can change in value over time, so you may need legal representation to help build a fair distribution of these items. There is a big distinction in the law as it applies to married and unmarried spouses.
Married couples are entitled to a presumptive 50% share in the value of the combined family assets less any exemptions. This is also referred to as equalization of net family property. Typically, assets include the matrimonial home, real property such as Pensions, Mutual Funds, RRSPs or savings, vehicles, personal property including art and jewellery, and other property. Exemptions may apply to property brought into the marriage, inheritances, compensation received among others. Proving exemptions can be complex, and may require tracing funds through accounts or assets, or both. There are special rules for Matrimonial homes, inheritances, gifts, severance pay and CPP.
At times, division of property can become very complex, particularly where a business is involved or exemptions/ excluded properties to deal with or tax consequences. It’s a good idea to start making a list of your assets and liabilities as of the date of marriage and separation early in the process.
Common Law Spouses
The rules about property division in the Family Law Act do not apply to common-law couples. If you are in a common-law relationship, the property you bring into the relationship and any increase in its value, usually continues to belong to you alone. Upon separation, there is no automatic right to divide it or share in its value. For those who are co-habitating they must rely on the concept of common law gift and trust claims to assert and prove an entitlement. A common-law spouse does not automatically have the right to stay in the family home if it is not in his or her name. If one common-law spouse owns the home they can sell or mortgage it without the other spouse’s permission.
The below tabular column is an oversimplified explanation of the concept of Equalization
|Calculation of Net & Family Property||Spouse A||Spouse B|
|Date of Separation Assets (DOM)||$100||$55|
|Date of Marriage Assets (DOS)||$20||$25|
|Net family Property (NFP): DOS-DOM||$80||$30|
|Calculation of Equalization Payment||Payment|
|Spouse A NFP||$80|
|Spouse B NFP||$30|
|Spouse A-Spouse B||$50|
|Spouse A pays Spouse B $25 or half of $50 as Equalization payment|