Does Equalization Include Cryptocurrency and Investments in Ontario?

Many people hold more than a bank account and a house. Stocks, mutual funds, stock options and cryptocurrency can all be part of what you and your spouse own when you separate.

This article explains how those assets fit into Ontario's equalization rules and what you will be expected to disclose. How a particular asset is valued is often a question of evidence and can vary from case to case.

Are crypto and investments counted?

Yes, in general. Under the Family Law Act, property means any interest, present or future, vested or contingent, in real or personal property. That wording can capture assets such as unvested stock options, investments and crypto-assets.

For pensions, property includes the imputed value, for family law purposes, of the spouse's interest in the plan for the period from the date of marriage to the valuation date.

How the calculation works

Net family property is the value of all property a spouse owns on the valuation date, minus excluded property, minus the spouse's debts and other liabilities, and minus the net value of property, other than a matrimonial home, owned on the date of marriage. The spouse with the lower net family property is entitled to one-half the difference.

Equalization is a payment of money. It is not a split of each asset. So you will not necessarily divide the crypto wallet or the brokerage account itself.

• Debts such as lines of credit, loans and mortgages on the valuation date are deducted.
• If a spouse's net family property is less than zero, it is deemed to be zero.
• Values are calculated as of close of business on the valuation date or the date of marriage.

The valuation date and who must prove what

The valuation date is the earliest of several dates, including separation with no reasonable prospect of resuming cohabitation and the date a divorce is granted. This matters most for volatile assets such as crypto and shares, because their value can change sharply.

The person claiming a deduction, such as date-of-marriage property, or an exclusion has to prove it. Some investments may be excluded, for example property received by gift or inheritance from a third person after the date of marriage, but income from that property is excluded only if the donor or testator expressly said so.

There are no official Ontario rules written specifically for valuing crypto-assets or stock options. How they are valued, including any allowance for tax and the treatment of unvested options, varies by case and often depends on valuation evidence. A lawyer or valuator can advise on your situation.

Disclosure in a court case

A party making a property claim must serve and file a financial statement in Form 13.1. For a Part I Family Law Act property claim, the party must also serve listed documents no later than 30 days after the financial statement is due, including the statement issued closest to the valuation date for each account at a financial institution.

Before a settlement conference or trial, each party to a Part I property claim must serve and file a net family property statement, Form 13B. A party must correct or update served documents once they find them to be incorrect.

If you are worried a spouse may hide or move assets, the court may make an order restraining the depletion of a spouse's property that would impair or defeat a claim. It may also make preservation orders in an equalization application.

What to do next

• List every investment, exchange account, wallet and option grant, including those in your spouse's name.
• Save statements and transaction histories, especially those closest to the date you separated.
• Record the value of each asset on the date of marriage if you may claim a deduction, since you must prove it.
• Ask a family lawyer, and if needed a business valuator, how your assets should be valued.

Frequently asked questions