Does a Professional Degree Count in Equalization in Ontario?

Many couples make a shared sacrifice so that one person can finish medical school, law school or another long program. One spouse works, covers rent and groceries, and delays their own plans. Then the relationship ends soon after the degree is earned, and the supporting spouse asks what they are owed.

This is a hard situation, and it helps to understand how equalization is built. This article explains how the calculation works, why a degree sits awkwardly within it, and what questions to take to a lawyer.

How equalization counts things

Net family property is the value of all property a spouse owns on the valuation date, except property excluded under section 4(2) of the Family Law Act, less debts and liabilities. A deduction is also allowed for property, other than a matrimonial home, that the spouse owned on the date of marriage.

Once both spouses' figures are known, the spouse with the lesser net family property is entitled to one-half of the difference. The calculation looks at what each person owns and owes, not at who contributed what effort along the way.

Why a degree is hard to fit into that calculation

In everyday terms, a degree is knowledge and a credential. You cannot sell it, give it away or hand it over in a settlement the way you can a house or an investment account. It is not a bank balance on the valuation date. That is why many people are surprised to find that years of support do not show up as a line item.

How the law treats a degree or the future earnings it may produce is a specific legal question, and the answer depends on the facts and the current case law. A lawyer can confirm how it applies in your case. What you can do is understand what does show up in the calculation, because that is where the practical effect often lies.

What does show up in the numbers

• Savings, investments and other property each spouse owns on the valuation date.
• Debts and liabilities on the valuation date, which reduce net family property.
• Property each spouse owned on the date of marriage, other than a matrimonial home, which can be deducted.
• Property that was agreed in a domestic contract not to be included.

If the student took on loans, those are generally the sort of debts and liabilities that the calculation takes into account. If the supporting spouse used up savings or took on debt to keep the household going, those choices also show up in what each person owns and owes on the valuation date.

One caution on the home. Where property a spouse brought into the marriage is still the matrimonial home at separation, that spouse cannot deduct its marriage-date value. If it was sold before separation, the marriage-date value is deductible. A matrimonial home is property in which a person has an interest and which the person and spouse ordinarily occupied as their family residence at separation.

Remedies: where to look if the numbers feel wrong

If the standard result seems out of line with what you contributed, the law does offer limited routes. The first is the unequal-sharing provision. A court can vary the equal share only if equalizing net family properties would be unconscionable. The threshold is high, and mere unfairness is not enough.

The second is a domestic contract. Property that the spouses have agreed in a domestic contract is not to be included is excluded from net family property. If you already have an agreement that works against you, setting it aside is a two-step process. You must show one of the listed circumstances applies, such as a party not understanding the nature or consequences of the contract. That is necessary but not sufficient, because the court then decides whether to exercise its discretion to set the contract or a provision aside, and fairness is an appropriate consideration.

Other kinds of claims may exist in some situations, and whether they apply depends on facts a lawyer needs to hear. Do not assume they are unavailable, and do not assume they are available.

What to do next

Start by gathering what shows the contribution and the financial picture. Evidence is more useful than a general sense of sacrifice.

• Collect proof of tuition, student loans and any lines of credit used during school.
• Gather statements showing household expenses you covered while your spouse studied.
• List your assets and debts on the date of marriage and now.
• Find any marriage contract or cohabitation agreement and read what it says about property.
• Write a short timeline of when the program began, ended and when you separated.
• Book time with a family lawyer to ask about all the ways your contribution could be recognized.

Frequently asked questions