What Is Dissipation of Assets in Ontario Family Law?

If you suspect your spouse is spending, transferring or hiding money as the relationship ends, it is natural to worry that there will be little left to share. People often call this dissipation or wasting of assets.

This article explains, in general terms, the Ontario rules that can respond to it: disclosure duties, protective orders, and the court's power to adjust the usual equal split.

What the law says about squandered assets

The usual result is that the spouse with the lower net family property is entitled to one-half of the difference between the two. A court may award more or less than half, but only if equalizing would be unconscionable. Listed factors include undisclosed debts, debts incurred recklessly or in bad faith, intentional or reckless depletion, and a disproportionately large share of family debts assumed by one spouse.

Ontario.ca describes this as possible only in very special situations where an equal split would be extremely unfair to one spouse. Ordinary spending, even spending you disagree with, is not enough on its own.

Orders that can protect assets

In an equalization or title application, a court may make interim or final orders restraining the depletion of a spouse's property. These are called preservation orders.

The valuation date is the earliest of several dates, one of which is the date a spouse starts a successful improvident-depletion application under s. 5(3).

A person can also apply to court on a question of ownership of particular property. The court may declare ownership, order partition or sale, and order compensation if the property was disposed of. A court may order security for an equalization payment.

Disclosure and evidence

In an equalization application, each party must serve on the other and file a sworn statement of their property, debts and other liabilities. It must cover the date of marriage, the valuation date and the date of the statement, plus claimed deductions and exclusions and certain disposals of property. A party making a property claim must also serve and file a financial statement, which is Form 13.1 for property claims.

Within 30 days after the financial statement is due, a party to a Part I property claim must serve supporting documents, including statements for accounts and investments issued closest to the valuation date. A party who finds a served document is incorrect must promptly serve the corrected information.

• Bank, credit card and investment statements from before and after separation.
• Records of large transfers, withdrawals, gifts or unusual purchases.
• Tax returns and loan applications that list assets.
• Messages or emails about money.

If disclosure is missing

If a party has not served or filed a required disclosure document, the court may on motion order them to do so, and must then also order the party to pay costs. The court may order a non-party to produce a document, and may order a party or non-party to be questioned under oath.

If a party fails to obey an order, the court may make any order it considers necessary, including costs, a fine or penalty, striking out documents, barring use of undisclosed documents or a contempt order.

If you already signed a separation agreement, a court may set it aside if a party failed to disclose significant assets, debts or other liabilities that existed when it was made.

What to do next

• Save copies of the financial records you can lawfully access, and write down what you have noticed and when.
• Do not take or delete anything you are not entitled to, and avoid retaliating by spending shared money.
• Speak with a lawyer early about a preservation order if you fear assets will disappear.
• Ask a lawyer or accountant about tracing and valuation.
• Check time limits with a lawyer, because an equalization application has deadlines.

Frequently asked questions