Matrimonial Home in Ontario
Most valuable assets a family owns is their matrimonial home in Ontario
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As a generalization, one of the most valuable assets a family owns is their matrimonial home therefore when a decision is made to separate or divorce, splitting assets or the matrimonial home can be very stressful. According to the Ontario Family Law Act, the matrimonial home refers to a residence or assets that one or both spouses have an interest in buying or a home that is rented or owned and occupied by both spouses and their family, up until the day that they have officially separated. The matrimonial home can include any type of housing unit, including a condo or mobile home. It is advised to consult a professional for further assistance if you are unsure of the assets or properties you and your spouse inhabited during a marriage. In some marriages, spouses own more than one matrimonial home, in which case both residences must fulfill the requirements upon the date of separation. For example, a married couple can have a principal residence and a cottage home, which was used frequently on weekends or even throughout the week. Any assets that is not considered a primary residence but is occupied regularly can technically be considered as an additional matrimonial home under Ontario’s Family Law Act. While splitting these properties during a divorce is extremely important to make sure you have done things properly and sought a professional for help or assistance.
Within the province of Ontario, the matrimonial home legally belongs to both spouses, regardless of the individual name listed title or on the mortgage. Once a couple has officially married, the home is instantly owned by both parties. This also applies when a spouse independently purchased the home, prior to the marriage occurring. As a result of this, the matrimonial home is equally divided between both parties if found going through a separation or divorce. However, it is imperative that you understand and practice your rights when negotiating terms for the matrimonial home. According to Ontario’s Family Law Act, the matrimonial home is treated slightly different than other financial assets or properties that are individually or mutually owned. Under Ontario’s Family Law Act, the matrimonial home is granted with a unique legal status when a couple is or was legally married; therefore, the process of splitting this assets during the divorce is fairly complex. Oftentimes, it can be challenging to decide upon what to do with the matrimonial home during the division of property in Ontario, as it is typically the most valuable asset a couple mutually owns. Although, there are many rights concerning the matrimonial home for both spouses, that they would not be entitled to if they were not legally married in Ontario.
In Ontario, both spouses within a marriage have an equal and legal right to continue living within the matrimonial home, until the home is officially sold to one spouse individually, sold to a third party buyer, or until a judge legally grants a court order stating one spouse must move out of the home. With that being said, when a married couple gets a legal separation while living in their matrimonial home, it is not legally acceptable for one spouse to change the locks on their ex-partner if they decide to move out once separated; according to Ontario’s Family Law Act, there will be no legal grounds to support that decision.
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Ultimately, divorce and money go hand in hand. During a divorce, regardless of what process is taken, finances will always remain a significant aspect to negotiations, the division of assets in a divorce is a complex portion of the divorce that needs to be done properly. It is not uncommon to be anxious or uncertain about the division of assets in a divorce, as there are various factors to consider and agree upon. Typically, with many marriages, one spouse takes primary responsibility of managing the finances; therefore, when a divorce occurs the other spouse feels uncertain or unaware of the financial status of the couple or how to divide the martial assets. If this is a relatable situation, it is advised to raise any concerns and obtain a professional for financial assistance or inquire about Turning Point Family Mediation. Once a divorce is finalized, it is now the sole responsibility of the ex-spouses to take on their finances individually. It is crucial to be aware of your financial responsibilities in relation to any bank accounts, mortgage loans, credit card bills, and utility payments. In preparation of this new reality, it is essential to organize and manage all finances prior to taking on this responsibility independently. Understandably, this can be a challenging task while dealing with the physical and emotional stress of a divorce; however, without doing so, individuals can experiences great financial hardship in the near future. Although, individuals have the ability to successfully take control of their own finances after a divorce, when a proper financial settlement in Ontario is created to meet their individual needs.
Within this section, when discussing assets we are referring to; money (financial investments, cash, bank accounts, etc.), pensions, Registered Retirement Savings Plans (RRSP), insurance policies, disability benefits, real estate, businesses, frequent flier miles, and any other properties or financial assets a couple mutually possesses. Essentially, when referring to assets, we are referring to anything a couple owns, which also includes personal and business vehicles, clothing, jewelry, artwork, furniture, appliances, electronics, even family heirlooms.
When obtaining a divorce in Ontario and discussing the division of assets in a divorce, any asset that was acquired during a marriage will be divided amongst both spouses evenly. Typically, if your spouse owns any assets or other assets that are more valuable than the assets or additional assets that you own, your spouse must provide you with the difference in financial value. This expectation is to ensure that both parties are exiting the marriage with fairly equal finances. Ontario divorce and property disputes can be extremely challenging for some couples to agree upon; therefore, couples can allow the court to decide upon these terms for you, although this can get extremely expensive. If a couple decides to let the court divide their assets, properties, and debts, they must claim this within six years of being legally separated or within two years of a divorce being finalized. According to the law within Ontario, everything must be divided equally, regardless of who paid for it in the past or whose name is legally listed. There are professionals and online resources that can assist couples in calculating the equalization of assets and properties during a divorce, which will support spouses in determining how to equally divide their assets and assets and record it on their finalized Separation Agreement.
In Ontario, a family patrimony is the term used when considering a group of assets shared between partners who decide to terminate their marriage. In some cases, the rules for the family patrimony can even apply to common-law relationship; although it is not as common in the eyes of the law. Within the rules of the family patrimony, the assets that are automatically equally shared, regardless of who they originally belonged to or were purchased by, include:
- The matrimonial home or homes
- Vehicles used for family purposes
- Any finances acquired in a pension plan during a marriage
There are a few assets and properties that might be excluded from the family patrimony or the division of assets in a divorce in Ontario. The assets or assets that are excluded from the family patrimony include; income properties, bank accounts, stocks, bonds, jewelry, financial investments, and other personal assets. The rules for this can even apply to money, investments, and assets that was gifted or inherited by one spouse in the relationship from a third party outside of the marriage. Although, it is important to note that if any gifted or inherited money is used to purchase anything during the marriage, then it is challenging to trace; therefore, the gifted or inherited money used to make previous purchases cannot be excluded from the Net family property (NFP) calculations.
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Once the division of assets agreement has been created and all financial matters have been agreed upon and settled it will be time to start the distribution of assets. Some assets can be distributed by the individuals but other times banks as lawyers will need to be used especially with the matrimonial home and debts.
Regardless of what option is decided upon, both spouses must be aware that any final decisions about the matrimonial home must be included within a finalized Division of Assets Agreement or the Separation Agreement. A formal Division of Assets Agreement / Separation Agreement is crucial when changing homeownership of the matrimonial home, as it clearly outlines the financial terms of the divorce relating to the division of assets and other assets. In addition to this, during a legal divorce or separation a Separation Agreement is essential for real estate transactions, as it will direct the real estate attorney towards the handling of sales and the distribution of proceeds from the sale of the matrimonial home. As previously stated, if a formal Separation Agreement is not finalized prior to selling the home; the funds will be placed within the real estate lawyer’s trust account until this document is successfully completed.
Pensions, if being transferred from one individual to another, will also need to be done by the pension provider by reading the instructions in the Separation Agreement / Division of Assets Agreement.
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A Net Family Property Statement is a form used to calculate our clients’ Net Family Property. A vital document for couples going through the separation process, the form lists all assets and debts as of the “Date of Marriage” and “Date of Separation”. Once both parties have disclosed their financial statements, we calculate the “equalization payment” – the payment to be made from the spouse with the higher value to the spouse with the lower value – to put both spouses at an equal position.
Our mediators will walk you through every step of this process, to help you make the most informed and confident decisions during the process as long as you have provided the proper financial disclosure. Financial disclosure is a broad term that is used to describe the process of providing access to all of one’s financial information. During a separation, one must provide their mediator and partner with all information regarding their assets and debts as of their “Date of Separation” (e.g. a bank statement or Visa statement showing the account balance as of the date of separation).
When calculating the equalization of property and assets during a divorce in Ontario which is done by creating the Net Family Property Statement, it is important to remember that each spouse is entitled to half of the cash value of the family patrimony that was acquired during the marriage. There are two main factors to consider when determining who will be receiving an equalization payment and the total value of that payment. Firstly, each spouse must calculate their Net Family Property (NFP) by adding the value of everything they own. With this amount, each spouse must then subtract the value of whatever they owned prior to the marriage, while also including their individual debts, inheritances, and/or gifts. Each spouse is responsible for determining the market value of any of their assets, to devise accurate calculations. Second, the couple must mutually calculate the amount that will constitute the equalization payment. The equalization payment is a payment provided by the spouse with the higher Net family property (NFP), to their ex-partner, which is also known as a settlement payment. Typically, this payment is half of the total difference between each spouse Net family property (NFP). For example, if the difference between both spouses individual Net family property (NFP) is $50,000, then the spouse with the higher Net family property (NFP) will pay the other spouse $25,000 to settle. However, it is important to keep in mind that this formula may not always be accurate. In some cases, the Ontario court system can order a spouse to pay the other more or less than previously calculated or anticipated. Oftentimes, this is based on a judges personal belief that the equalization payment is utterly unfair or if the couple had previously signed a marriage contract or another agreement outlining the divorce division of assets. In the case where a marriage contract or other agreement had been previously signed, the court will ensure that you follow the agreements previously created and agreed upon, unless the judge deems the contract unfair. There are various factors that a judge will consider when deeming an equalization payment as fair or not:
- Whether or not one spouse hide their debts prior to a marriage
- Whether or not one spouse recklessly accumulated debt during a marriage
- Whether or not one spouse intentionally reduced the value of their assets prior to a divorce or separation
- Whether or not the Net family property (NFP) of one spouse includes all major gifts from the other spouse
- If a married couple lived together for less than five years, and the equalization of payment does not reflect a fair share of their assets
According to the Family Law Act, the rules for splitting assets differ from the rules that spouses must follow when splitting the matrimonial home. For the matrimonial home, if the spouses purchased their home together, then the total equity must be divided in half for each spouse once the relationship has ended. However, for other assets, such as personal bank accounts, the rule for calculating an entitled value of money for each spouse differs. When referring to bank accounts specifically, each spouse must consider the following formula to determine their entitlement; the bank accounts value at the date of separation, minus the bank accounts value at the beginning of the marriage, then cut that amount in half. It is advised to consult a professional, if you remain unsure of your personal entitlement to your spouses’ finances and/or your spouses’ entitlement to your personal finances.
When involved in a common-law relationship, both partners are not automatically entitled to one another’s assets. However, both partners can request a court to order them entitlement to some of their partner’s assets by providing evidence of contribution to that asset. In other words, if one partner can demonstrate how they physically or financially contributed to their partner’s ability to acquire that assets or financial wealth, then they may be granted with some entitlement. In order to make this claim, it must be done within two years of separating from your partner. As previously stated, when a couple in a common-law relationship decides to separate, each partner tends to leave the relationship with what they entered the relationship with. The only asset that is equally divided amongst a common-law couple includes any asset that is listed under both partners’ names. A general agreement that common-law couples create is a Cohabitation Agreement or even a Separation Agreement; evidently, by possessing a formal and detailed agreement, the process of splitting assets and assets will be easier to handle once the relationship ends.
It is important to note that when seeking assistance from the court, they may take into consideration the unpaid labor that is done around the home, such as; caring for a family and attending to the home. This can increase a partner’s ability to obtain entitlement to an asset or any other assets under review.
- Both partners cannot agree on how to divide an asset that was purchased together
- Both partners had previously agree to mutually share assets that is only listed under one of their names
- A assets is under one partners name, but the other partner made it possible for them to acquire the assets and have been suffering financially as an outcome
- One partner has added value to a assets that is in the name of only one spouse
It is important to note that when seeking assistance from the court, they may take into consideration the unpaid labor that is done around the home, such as; caring for a family and attending to the home. This can increase a partner’s ability to obtain entitlement to a assets or any other assets under review.
Finally, regardless of if a couple was married or in a common-law relationship, each party is individually responsible for any debt that was accumulated in their own name or jointly during the relationship. If a couple was married, the debt that is owed will be subtracted from the total amount of the assets value when calculating the equal division of assets.
Undoubtedly, debt is just as significant to the divorce assets division, as financial assets and income are. Equal to a marriages shared finances, any existing debt is equally distributed during a divorce as well. Actually, debt is one of the first aspects of a relationship’s finances that must be properly addressed within a Separation Agreement. Evidently, any financial ties to your ex-spouse must be negotiated and addressed in writing to prevent any future complications. Even if your ex-spouse verbally agrees to cover a portion of debt, you must request that in writing and remove your name from any official document marking you as financially responsible. This also applies for any debt that you may not have been aware of during the course of the marriage. Although, if the proper legal actions are taken to address this you may be able to cut all financial ties from your ex-spouse, while protecting your own finances. Ultimately, when you are going through a divorce, your marriage is being terminated, not your shared financial responsibilities.
During a divorce, the last thing an individual may consider is their individual future credit score. Unfortunately, the divorce process can greatly impact your finances and credit history, as it aligns with extreme unplanned costs. With that being said, during a divorce it is vital to follow the legal steps towards properly separating your credit from your ex-spouse’s within a Separation Agreement to ensure it is legal, binding, and enforceable. It is important to protect and/or restore your individual credit, as your future financial reputation is on the line. Evidently, obtaining a low credit score can greatly impact the success of your future as an independent party.
Divorcing couples usually seek the quickest and cheapest route to finalize their divorce; hence, they do not want to spend a lot of money during this process. However, it is important to remember that the success of your future depends on how you manage the divorce process prior to it being finalized. Therefore, the amount of time and money you spend during a divorce will be rewarding in the future. It is crucial to spend the appropriate amount of money and time needed to successfully develop a legal, binding, and enforceable Separation Agreement; by not doing so, ex-spouses will see themselves revisiting court in the near future to correct any mistakes made.
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Matrimonial assets refers to the assets and debts that were acquired during an individual’s marriage, to which should be divided equally amongst spouses. During a divorce, the separation of assets is set out in the Net family Property Statement; a document the mediators uses to show the individuals what it looks like for them to leave the marriage with the exact same amount of money excluding any excluded assets. The division of matrimonial assets is an important part of the separation and divorce process, so it is important to seek advice on the topic from a professional. The separation of assets during a divorce can be extremely challenging for some couples to agree upon; therefore, couples can allow the court to decide upon these terms for you. If a couple decides to let the court divide their matrimonial assets, they must claim this within six years of being legally separated or within two years of a divorce being finalized. According to the law within Ontario, everything must be divided equally, regardless of who paid for it in the past or whose name is legally listed. There are professionals and online resources that can assist couples in calculating the equalization of assets and properties during a divorce. This will support spouses in determining how to equally divide their assets and debts and record it on their finalized Separation Agreement.
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Our process for mediation is simple, efficient, and effective. We offer convenient scheduling through our online booking platform, strive to remain responsive at every step of the way, and always ensure your utmost confidentiality throughout the entire process.
Discover our straightforward step-by-step process below.
30-45 minute joint meeting with your mediator
Both parties must attend of their own accord
Any questions are answered
Discuss the process, costs, as well as your respective wants & needs
Confidential one-on-one session with your mediator
Screening for domestic violence and power imbalances
Screening of suitability for mediation
Opportunity to discuss your feelings regarding the separation, your anxieties, worries, and goals
Your mediator guides you through discussions regarding division of property, child and spousal support calculations, and parenting plan
Agreed upon terms drafted into a Separation Agreement
On average between 2 to 3 two-hour sessions
We will draft your Separation Agreement, Net Family Property Statement, Parenting Plan, and supporting calculations based on your agreed upon terms
We will review your draft documents together prior to finalizing them to ensure all the information discussed in mediation is covered in the document
Discussion of your next steps and options for moving forward
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Toronto, ON M5X 1A9
Tel: (905) 552-9515
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