- The spouse whose net family property is smaller is entitled to one-half of the difference between the two net family properties.
- Net family property is the value of what a spouse owns on the valuation date, after deducting debts and other liabilities.
- Gifts and inheritances from a third person during the marriage are generally excluded, but that exclusion does not apply to a matrimonial home.
When a marriage ends, many people assume everything is split down the middle, item by item. Ontario's approach is different: it compares what each spouse has built up and equalizes the difference.
This article walks through how that works, what is left out, and the time limits to watch. It is general information, and a lawyer can apply it to your facts.
How equalization works
When married spouses separate, the spouse whose net family property is smaller is entitled to one-half of the difference between the two net family properties. You do not divide each asset. You calculate each spouse's total, compare them, and the difference is shared.
Net family property is the value of property a spouse owns on the valuation date after deducting that spouse's debts and other liabilities. Debts at separation, such as credit cards, car loans and the remaining mortgage, reduce a spouse's net family property.
The valuation date and debts at marriage
The valuation date is the earliest of several dates, the first being the date the spouses separate and there is no reasonable prospect that they will live together again. Property you owned at separation is valued as of the day you separated, and property you owned on the wedding day is valued as of the date of marriage.
Debts at marriage are subtracted from property owned at marriage, except debts tied to the family home, such as a mortgage.
What is excluded, and the family home
Some property is not included in net family property.
- Property acquired during the marriage by gift or inheritance from a third person.
- Personal-injury damages.
- Property the spouses agreed in a domestic contract to exclude.
The exclusion does not apply to a matrimonial home. Ontario's guidance says the full value of the family home must be shared even if one spouse owned it before the marriage or received it as a gift or inheritance, unless the spouses agree otherwise.
Unequal division, protecting property and deadlines
A court may award a spouse more or less than half the difference if equalizing would be unconscionable. One factor is a spouse's intentional or reckless depletion of their net family property. Where needed to protect the other spouse's property interests, the court may make an interim or final preservation order restraining the depletion of property.
An application for equalization cannot be brought after the earliest of these dates.
| Event | Last day to apply |
|---|---|
| Marriage ends by divorce or judgment of nullity | Two years after that day |
| Spouses separate with no reasonable prospect of resuming cohabitation | Six years after that day |
| First spouse dies | Six months after that day |
A court may, on motion, extend a time limit in the Family Law Act if there are apparent grounds for relief, the delay was incurred in good faith, and no person will suffer substantial prejudice. Do not count on that, and get advice early.
What to do next
- List what each of you owned on the date of marriage and on the date of separation, with the supporting statements.
- List all debts as of separation, including credit cards, car loans and the mortgage.
- Identify any gifts, inheritances, injury damages or contract exclusions, and keep proof of them.
- Disclose everything honestly, because a court may set aside a separation agreement if a party failed to disclose significant assets, debts or other liabilities.
- Put any agreement in writing, signed by the parties and witnessed, since otherwise it is unenforceable.
- Contact a Family Law Information Centre, a free service giving information about separation, divorce and related issues.
Frequently asked questions
Do I get half of everything we own?
Not exactly. The spouse whose net family property is smaller is entitled to one-half of the difference between the two net family properties. Excluded property, such as a gift or inheritance from a third person, is left out.
Is an inheritance I received during the marriage shared?
Property acquired during the marriage by gift or inheritance from a third person is generally not included in net family property. That exclusion does not apply to a matrimonial home.
Does my debt matter?
Yes. Net family property is calculated after deducting debts and other liabilities, so debts at separation reduce it.
Is there a time limit to claim equalization?
Yes. An application cannot be brought after the earliest of two years after the marriage ends by divorce or judgment of nullity, six years after separation with no reasonable prospect of resuming cohabitation, or six months after the first spouse's death. A court may extend a time limit in limited circumstances.
Sources
- Family Law Act, R.S.O. 1990, c. F.3 (e-Laws) — Ontario e-Laws
- Ontario.ca – Dividing property when a marriage or common law relationship ends — ontario.ca
- Ontario.ca – Family Law Information Centres — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a family law question
Start a file online — flat, published fees, reviewed by a licensed lawyer before a dollar is owed.