Do I have to be divorced to receive an equalization payment in Ontario?
No. You do not need to be divorced to receive or pay an equalization payment in Ontario. The right to equalization arises when the marriage breaks down — typically upon separation — not upon divorce. A spouse can start a court application for equalization as soon as separation occurs.
In practice, many couples settle equalization through a separation agreement before or without ever obtaining a formal divorce. The equalization claim and the divorce are two separate legal processes. Divorce dissolves the marriage; equalization divides the economic gains made during it.
The two processes are connected only through limitation periods: once a divorce order is granted, a two-year clock starts to file an equalization application if you haven't done so. Some couples finalize equalization quickly and delay divorce proceedings; others divorce and then address property. The optimal sequence depends on your circumstances, tax considerations, and whether either party wishes to remarry.
Key takeaways
- Equalization does not require divorce — separation is the trigger
- The two processes are legally separate and can happen in any order
- A divorce order starts a two-year clock to file an equalization application
- Most equalization matters are resolved by separation agreement before divorce