Divorce Financial Settlement in Ontario
Financial Settlement After Divorce in Ontario
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Typically, it is best to discuss a divorce financial settlement prior to filing for a divorce. As mentioned on the ‘Divorce and Property in Ontario’ page of our website, divorce financial settlements that are written in a Separation Agreement are crucial for ensuring you can move forward knowing your finances are resolved and nothing is outstanding.
Generally speaking, a divorce financial settlement involves coming to an agreement on property division and child and/or spousal support. Specifically, key issues discussed during a divorce financial settlement include:
- Sale or Transfer of title of the Matrimonial Home
- What to do with your bank accounts, both individual and joint
- Division of registered assets in Ontario, pensions
- Allocation of debt
- Pre-marital assets/debts
- Spousal support
- Child Support
- Life Insurance
In many cases discussions on the above topics occur during the joint mediation sessions.
Divorce Process for a Financial Settlement Agreement in Ontario
How Mediation Assists With Divorce in Ontario
Family Mediator in Ontario
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The divorce process for a financial settlement begins with providing one another and your mediator with full financial disclosure. This includes but is not limited to tax returns, other income information, bank account statements, property valuation(s), debt statements, as of your Date of Marriage (if applicable) and Date of Separation.
A divorce financial statement also known as a Net Family Property Statement is created so that all property can be laid out in a spreadsheet like form. A version of a divorce financial statement that we use in mediation is called a Net Family Property Statement. Each asset and debt are listed individually on a divorce financial statement. Completing a financial statement in full is crucial for the separation and divorce process and helps to ensure your Separation Agreement is valid.
If choosing mediation to help you and your spouse/partner come to a financial settlement after divorce/separation, it is best to try and work together to submit your financial disclosure to your mediator. Doing so can save money, time and added stress, as for some this can be a daunting task.
When all financial disclosure has been provided, you can begin to have educated and informed discussions on how you will divide property, who will retain what assets/debts, what will you do with the matrimonial home, what will happen with the family business etc. You will also discuss matters regarding child and spousal support and extraordinary expenses for the children.
Discussions and negotiations happen during this time in the mediation/divorce process.
Financial Settlement After Divorce in Ontario
Settling Divorce Finances The Easy Way in Ontario
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A financial settlement after divorce/separation will look different for everyone. It may mean that one party is keeping the matrimonial home and removing the other party from the title, or you may have sold the home and equally received the proceeds.
If one party is wishing to be “bought out” of the matrimonial home as part of the divorce financial settlement, then you should start with agreeing upon the value of the matrimonial home. This involves having a real estate agent or appraiser estimate the value on the property, so you can work in mediation to come to an agreement on the valuation. For a lot of couples, the matrimonial home is the most valuable on their financial statement and is a very important item of discussion.
If part of the divorce financial settlement involves a RRSP rollover, where registered funds are being transferred from one party to the other, you may need to fill out a T2220 Transfer Form. A T2220 Transfer Form is used to transfer money from one party’s unmatured retirement account to their former spouse or former common law partner’s retirement account. The transfer will take place on a tax-deferred basis, as long as the funds remain in the RRSP or RRIF.
Another form of a divorce financial settlement could be a cash payment from one party to the other to equalize Net Family Property.
Calculating and agreeing upon child support and spousal support amounts is also part of the mediation process and financial settlements. Please visit our ‘Child Support’ page and ‘Spousal Support’ page for more information.
Divorce Finances in Ontario
Assistance With Drafting a Divorce Financial Statement Near Ontario
Ontario Family Mediation
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When the decision has been made to separate and divorce, emotions run high. In many cases, the new reality will look different; physically (being in a new home for example), mentally, emotionally, and financially.
Many families during a time of separation and divorce will now experience living in two separate homes, with each their own bills to pay and monthly expenses. Starting the process, it is important to understand your finances and spending the time to go through them to ensure you have a good understanding of your assets and debts, as well as your incomes.
A divorce financial settlement can involve receiving a certain amount in child support and/or spousal support each month. Working within your own budget is a good idea to make sure you can stay on top of the monthly expenses. Topics of divorce finances and budgets are part of the discussions, during the mediation process.
Again, it is crucial that both parties have a good understanding of their finances during divorce, both at the time of creating a Separation Agreement and after it is signed. The goal for many couples in mediation is to try and reach resolution on all matters and feel that the agreed upon resolutions are fair. The hope is that couples can use mediation as a way to finalize the division of property in Ontario, during their mediation process.