PROPERTY DIVISION LAWYER
THE LEGAL FRAMEWORK
Learn details firsthand from a family lawyer.
THE DIVORCE ACT
The Divorce Act is a Federal statute that consists of provisions regarding the grounds of divorce, spousal support, child support and parenting time among other things.
THE FAMILY LAW ACT
The Family Law Act is an Ontario Provincial statute that deals with the provisions of family property, its division, the net family property calculation for the division of assets, spouses’ support obligations, cohabitation agreements, marriage contracts, separation agreements, paternity agreements, etc. within Ontario.
THE CIVIL MARRIAGES ACT
The Civil Marriages Act is a Federal statute that gives legal recognition to same-sex marriages retroactively in Canada.
TYPES OF PROPERTY
The property that spouses acquire between the date of marriage and the date of separation (or the valuation date) is considered to be marital property.
The assets that are held by the spouses prior to entering into a marriage are separate properties. If a spouse acquires a property during the marriage but is the sole title-holder of the same property acquired before, that property will still be considered family property, unless there is a valid marriage agreement signed between the spouses specifically stating the intention to keep separately acquired properties during marriage separate in the event of a separation.
GIFTS AND INHERITANCES
Section 4(2) of the Family Law Act provides for the list of assets to be excluded from the calculation of net family property. According to this provision, the gifts, pensions and inheritances that are given to a spouse during the marriage are to be excluded, therefore, the other spouse cannot claim any share in the same.
FACTORS INFLUENCING PROPERTY DIVISION
LENGTH OF MARRIAGE
Section 5(6)(e) of the FLA provides that the equal division of property between the spouses may be done unequally if the spouses have separated before completing 5 years of cohabitation before separating.
FINANCIAL AND NON-FINANCIAL CONTRIBUTIONS
In some cases, during the marriage, both spouses contribute towards their properties even when the title is held by only one of the spouses. Section 5(7) recognises the spouses’ financial as well as non-financial contributions to claim property.
In the landmark case of Rawluk v. Rawluk , the Supreme Court of Canada explained the constructive trust one spouse may have over their properties the title of which is held solely by their spouse. This constructive trust arises from the claimant’s spouse’s non-financial contributions, the total value of which may be established by proving the following:
- An enrichment in favour of the title-holder spouse.
- A corresponding deprivation caused to the claimant’s spouse, and
- Neither juristic nor legal reason for the said enrichment.
In many cases, the default assumption is an equal division of marital assets. However, certain circumstances may warrant an uneven split, as allowed by Section 5(6)(e) of the Family Law Act, especially if the spouses have not completed five years of cohabitation.
Assets owned by spouses before marriage fall under the category of separate property, but complexities may arise if there is a commingling or if a valid marriage agreement addresses the treatment of pre-marital assets. Careful consideration and legal advice are crucial to navigate such scenarios.
Business ownership in the context of property division falls under FLA section 4(1), which defines family property to include business assets acquired during the marriage.
The FLA provides a framework for addressing overseas assets under section 22, which grants the court authority to deal with property situated outside Ontario. This section ensures that the FLA’s principles extend to assets beyond the province’s borders.
THE PROCESS OF PROPERTY DIVISION
The legal procedure for property division in Ontario is a comprehensive process governed by the Family Law Act. It typically begins with one party filing an application for divorce or separation in the family court. The identification of assets and liabilities is a critical initial step, requiring both parties to provide a thorough list of their financial holdings, including real estate, investments, and personal property. Following this, the valuation of assets becomes paramount, often necessitating professional appraisals for properties, businesses, and other complex assets. Ontario’s principle of equalization of net family property is then applied, where half the value of accrued wealth during the marriage is calculated, and the spouse with a higher net worth may be required to make an equalization payment to the other.
Negotiation or mediation is frequently encouraged at this stage to facilitate a mutually agreeable settlement. This collaborative approach allows the parties to have more control over the outcome and can be less adversarial than going to court. However, if an agreement cannot be reached through alternative dispute resolution methods, the matter proceeds to court, where both parties present evidence and arguments. The court issues a binding order outlining the specifics of the property division, and both parties are legally obliged to comply.
Enforcement mechanisms are in place to address non-compliance with court orders, which may include obtaining a writ of seizure and sale or pursuing other legal avenues. It is essential to note that property division can be a distinct process from the divorce itself, with the finalization of divorce occurring once all outstanding issues, including property division, are successfully resolved. Throughout these legal proceedings, honest and complete financial disclosure is paramount, and seeking legal advice at each stage ensures a clear understanding of rights, obligations, and potential tax implications of agreements or court decisions.
To navigate the property division process smoothly, certain essential documents are required. These may include financial statements, property appraisals, mortgage documents, and any prenuptial or separation agreements in place. Comprehensive financial disclosure is crucial to ensure a fair division, and parties are obligated to provide accurate and complete information about their assets and liabilities
IMPORTANCE OF ACCURATE VALUATION
Accurate valuation of assets is a cornerstone of the property division process. Ontario family law courts emphasize the importance of obtaining reliable and current valuations for properties, investments, and other assets. This ensures a fair and equitable distribution based on the true value of each asset, taking into account market fluctuations and other relevant factors.
CONSEQUENCES OF NON-COMPLIANCE
Non-compliance with the legal steps outlined for property division can have serious consequences. Failure to disclose assets, provide required documentation, or adhere to court orders may result in delays, additional legal expenses, and a less favorable outcome. In extreme cases, non-compliance could lead to contempt of court charges, affecting one’s credibility during legal proceedings.
Providing inaccurate valuations during Ontario’s property division process can result in significant legal penalties. Deliberate misrepresentation may lead to contempt of court charges, fines, or even imprisonment. Financial penalties can be imposed to compensate the other party for harm caused by the inaccuracies, and the responsible party may be required to cover legal costs. Settlements may be adjusted, and support payments recalculated based on corrected valuations. To avoid these legal consequences, it is crucial to provide accurate information, act transparently, and seek legal guidance throughout the property division process.
SEEKING LEGAL HELP
WHEN TO CONSULT A LAWYER
Consulting a lawyer early in the process is advisable, especially when complexities arise between multiple properties, such as business ownership or overseas assets. Legal guidance ensures informed decisions and protects individual rights throughout the property division proceedings.
WHAT TO LOOK FOR IN A LAWYER
When seeking legal help, look for a family law expert with experience in property division cases. A qualified lawyer should possess knowledge of relevant statutes, such as the FLA, and have a track record of successful outcomes in similar cases.
In navigating the intricate landscape of property division, legal guidance is indispensable to ensure a fair and just resolution tailored to the unique circumstances of each case. Whether dealing with business ownership, overseas assets, or other complexities, a knowledgeable family lawyer becomes a crucial ally in safeguarding individual rights and facilitating a smoother transition during a challenging time
At Kozyrev Law P.C., we pride ourselves on being your dedicated legal partner, specializing in family law matters with a particular focus on property division in Ontario. Our seasoned team of experts is committed to navigating the intricacies of asset distribution, ensuring a fair and just resolution for each client. With a profound understanding of the Divorce Act, the Family Law Act, and the Civil Marriages Act, we offer tailored solutions that address the unique circumstances of your case. Whether it’s handling marital or separate properties, including the complexities of business ownership under FLA Section 4(1), we bring expertise, compassion, and unwavering commitment to guide you through the challenges of family law. Trust Kozyrev Law P.C. to be your ally in securing a brighter future during challenging times.