Even in an amicable divorce, dividing property can be a difficult task. Partners enter a marriage with property and then acquire property together as a couple. There can be homes, vacation homes, vehicles, pensions, RRSP’s, artwork and much, much more.
Who gets what? Determining the answer to that question can be complicated. At Galbraith Family Law, our equalization and division of property experts can help you find a fair solution.
We have considerable knowledge in this area of the law and significant experience representing clients in family financial matters, including property division.
To learn much more about how we can help you with property division, call (705) 302-1102 (Barrie) or (289) 802-2433 (Newmarket) or click here to schedule a consultation.
Will I Need to Go to Court for Property Division?
As with many things in a divorce, this depends on a number of factors, including whether the split is amicable or contested.
In cases where the divorce is amicable, the division of property can often be done outside of the courtroom with the partners and their lawyers coming to an agreement that is welcomed by both sides.
In contested divorces, division of property can be a much lengthier and more complex process. Nonetheless, it is good to have knowledgeable experts, like our family law lawyers, on your side making sure your best interests are being looked after.
In general, there is a legal rule for division of property in Canada. In short, the increased value of any property that you and your spouse or partner acquired during your marriage and that you still have when you separate, must be divided equally between spouses.
Typically, property brought into your marriage is yours to keep. However, any increases in the value of this property during the duration of marriage must be shared.
Depending on the complexities of your divorce and the amount of your property and assets, the property division process could be lengthy. Our experienced lawyers can walk you through every step.
One of the big issues is the value of the assets. Once that is determined, the resolution is often simple.
What are the Three Steps of Property Division?
Here are the steps of property division:
Step 1 - Identification of property.
All of the property owned by the couple is identified and recorded.
We need to know the property and debt as of the date of separation and the property and debt as of the date of marriage. Property acquired or sold during the marriage is not relevant. We just need a snapshot of the assets/debts on the date of marriage and the date of separation.
You keep property in your name. Your spouse keeps property in their name. You share property that you jointly own.
Common law separations are different. They do not follow this formula.
Step 2 - Valuation of property.
The fair market value of all assets on the date of marriage and date of separation needs to be determined. Often this can be determined by agreement. If there is not agreement, each spouse’s lawyer will present evidence, such as valuations done by an expert, as to the fair market value of the property and assets as of the date of marriage and date of separation.
Step 3 – Calculating each spouse’s networth.
Your net worth for equalization purposes is the value of your assets on the date of separation, less your debt on the same date, less the assets (less debt) you had on the date of marriage. So you can see this is the increase in your net worth during the course of the marriage.
We do the same calculation for your spouse.
If your net worth is more than your spouse’s net worth, you owe one half the difference. Once you pay one half of the difference, you will each have the same net worth.
For example, if your net worth is as follows:
Assets on date of separation: $800,000
- Debt on date of separation: $100,000
- Assets – debts on date of marriage: $50,000
Your net worth is: $650,000.
If your spouse’s net worth is $550,000, then the difference is $100,000. Therefore, you would owe your spouse $50,000. Then, after you pay your spouse, you would both have $600,000.
Note: you would own all the assets in your name and owe all the debts in your name. You just owe an equalization payment of $50,000.
If the home is jointly owned, then you would have to sell it and split the equity or one person would have to buy out the other person’s interest in the home. Other joint assets would have to be divided or sold.
At each step of this process, it would be to your benefit to have a skilled and tenacious property division lawyer from Galbraith Family Law on your side.
With our extensive experience and knowledge, we can help protect your assets and we’ll help you fully understand the implications of any proposed property settlements.
To learn more about how we can help you, call (705) 302-1102 (Barrie) or (289) 802-2433 (Newmarket) or click here to schedule a consultation.