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Property Division


Equalization of Property

In Ontario, the Family Law Act treats a marriage as an equal economic partnership and requires spouses to “equalize net family property.” 


Upon separation or death, spouses are required to account for the value of all assets and debts in their name, including the increase in the value of property brought into the marriage and partial interests in jointly owned property. 


The parties’ assets, less their debts on date of separation, less equity held on date of marriage (other than in the matrimonial home) creates an amount referred to as “net family property (NFP).”  The spouse with the greater NFP pays the spouse with the lesser NFP one half the difference. This is called the equalization payment.   


Valuation Issues

In certain situations, it may be necessary to retain experts to valuate assets for completion of NFP calculations.


If one or both spouses own a business, it will be necessary to have it valuated. The value of the business at date of marriage and/or date of separation is an asset that will impact a spouse’s NFP.   


If one or both spouses have a provincial pension plan (not currently in pay), its value must be included as an asset for the purposes of equalization. On January 1, 2012, amendments were made to the Pension Benefits Act and the Family Law Act to require valuations of pension assets to be calculated by the pension plan administrator. Either spouse may apply to the plan administrator for a Statement of Family Law Value.

Matrimonial Home


The matrimonial home is given special status under the Family Law Act and is treated differently than other assets upon the equalization of net family property. If the matrimonial home is brought into the marriage by one of the parties, its value on the date of marriage cannot be deducted from the value of assets owned by that party on the date of separation.


In most marriages, the matrimonial home is the single most valuable asset the parties own and also the centre of family life. It is also possible for there to be more than one matrimonial home. 


Married spouses have equal rights to occupy or live in the matrimonial home unless the parties agree to a different arrangement or a court orders otherwise. Regardless of how legal title is held, neither party can mortgage the matrimonial home, rent it, sell it, or change the locks without the other party’s permission.    


The Importance of Financial Disclosure

Full financial disclosure is mandatory pursuant to the Family Law Rules and there are significant penalties associated with not providing it. Each spouse has an obligation to provide full disclosure of all assets and liabilities as of the date of marriage, the date of separation and the current date, whether solely or jointly held. 


Parties will need to gather information pertaining to assets and liabilities as at the three key dates - date of marriage, date of separation (also known as “valuation date”) and current date - including but not limited to:


  • the matrimonial home(s)

  • furniture and household contents

  • rental properties

  • vehicles

  • investments and bank accounts

  • pensions

  • life insurance policies

  • business ownership

  • mortgages

  • lines of credit

  • credit card debts

  • outstanding property taxes and/or utilities


Once the above disclosure has been gathered, a document known as a Form 13.1 Financial Statement is completed which incorporates the information. (Form 13 Financial Statements are used in cases involving only support claims). The Financial Statement must be true and accurate, as it is a sworn evidentiary document.

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