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How is property divided after Divorce in Ontario?

October 14, 2020

The division of property after a divorce is often a contentious issue between former spouses, particularly if there is no marriage contract or prenuptial agreement. Expectations sometimes run counter to a spouse’s actual property entitlement, which leads to uncertainty.

What is classified as property?

The property, in this case, includes assets, debts accumulated throughout the marriage, joint bank accounts, pensions, real estate and business property.

Ontario family law states that the value of any property or asset acquired during a marriage that is still in existence at the time of divorce must be shared equally between spouses. Any appreciation in the value of property owned at the time of marriage must also be shared equally. This method of sharing the value of the assets is referred to as equalization.

The equalization process

The process of equalization involves the following steps:

  • A detailed examination is done of each spouse’s financial position at the date of marriage and the date of separation.
  • For each date, the spouses’ assets are added, and his or her liabilities or debts are deducted. This gives a net value for each spouse on the relevant dates.
  • The financial position at the marriage date is subtracted from the financial position at the separation date to determine each spouse’s net family property (NFP). From the figure generated, it is determined who has a higher NFP.
  • The lower NFP value is deducted from the higher NFP value. The difference is then divided by 2 to determine the equalization payments.

The matrimonial home

The matrimonial home receives special consideration under the Family Law Act. Regardless of whose name is on the title, both spouses have a right to the home. Hence, any sale or rental of the home has to be a consensus of both parties. It is a misconception that through a marriage contract one spouse can limit the other’s rights to the home.

If both parties cannot agree on what to do with the matrimonial home, they may need to take the matter to court for a judge to decide. This decision is usually impacted by whether children are involved and who has custody over the children.


While the method of equalization may seem simple, it is often complicated by gifts and inheritances, properties owned outside of Canada, hidden assets, businesses owned by one spouse, monies gained from an accident settlement, and proceeds from a life insurance policy that still exists after separation. These assets can and most times end up being exceptions to property division in Ontario if they were received during the marriage from someone other than a spouse, kept separate and were not used towards a matrimonial home.

Provisions in marriage contracts can provide other exceptions to property division. A marriage contract is an agreement that is drafted and can be signed at or after marriage and states a custom set of rules for handling marital issues and dividing a couple’s property if death, divorce or separation occurs. Marriage contracts can cover but are not limited to:

  • An outline of which spouse will own what and how property will be divided if parties separate.
  • A set amount of spousal support to be paid to one party if spousal support will be paid.
  • A designated property as the matrimonial home.
  • Prevention of either spouse gaining access to the other’s pension.

The division of property is not a simple task and can result in disputes between spouses. Disputes can create delays in a divorce which can make the process tedious. Employing an experienced divorce lawyer can help to simplify the process.

Are you in need of a Toronto divorce lawyer?

If you need help with property division in Toronto, consult the experienced divorce lawyers at Baker and Baker Family Law.

With 58 years of combined experience, we take care of a wide range of legal matters that may arise in a divorce. The efficiency and effectiveness of our lawyers will save you time, money, and a great deal of trouble.

Contact us today to schedule a free legal consultation. Let us assist with calculating your equalization payments and deal with other property division matters.

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