When a married couple decides to separate and go their separate ways, it is generally expected that property and assets will be divided equally. In fact, according to the Family Law Act in Ontario, it is required that assets that have been accumulated over the course of the marriage are divided 50/50 in the divorce. There are however some exceptions which are important to note. The Family Law Act refers to these exceptions as “Variation of Share”.
How are assets divided?
In divorce cases in Ontario, assets are usually divided in the following; each spouse keeps the value of that they came into the marriage with, and assets accumulated over the course of the marriage are divided equally.
The one very notable exception to this is the matrimonial home. If one of the spouses owned the matrimonial home prior to the marriage, the home (or its value) is still usually divided equally between the two spouses upon their separation.
What laws govern distribution of assets in a divorce?
Section 5(6) of the Family Law Act covers exceptions to the rule where division of property in a divorce may not always be 50/50. These exceptions though, are very limited in scope and must pass a high level of scrutiny before the court will be willing to apply an exception. In short, the court will only apply such an exception is equal division of property would “shock the conscience of the court.”
Here are the circumstances under which the court might allow for the unequal distribution of assets:
Financial disclosure of debts
It is extremely important for individuals who are separating or who are entering into a marriage contract to fully disclose their financial situation and make the other aware of both their assets and their debts. If one spouse comes into the marriage with significant debt but fails to tell the other before getting married, the court may deem that it is not fair for the other spouse to divide assets and liabilities equally when they separate.
Another scenario might be if one of the spouses claims debts that were incurred in bad faith or through reckless spending. The spouse may have, for example, deliberately run up the credit cards out of spite during the separation in order to deliberately lower the value of the net family property. In a case such as this, the court may well determine that for both spouses to equally share that debt would be inappropriate that they may order the that the spouse responsible for the bad debts be solely responsible for paying them off.
Another reason why one spouse may get a larger share during a divorce is if a significant portion of the family property at the time of separation consisted of gifts to one particular spouse. This may be a gift from the parents of one of the spouses, an inheritance, etc. In the case of a large gift, the court may rule that the gift remains the exclusive property of the spouse that it was given to, and is not taken into account during the split of the remaining property.
When one spouse has been a reckless spender and has racked up large amounts of debt over the course of the marriage, the court may find that equal division of property is not fair to the other spouse.
Generally speaking, the court will not be accepting of reckless debt accumulation and spending and may make an exception to the 50/50 rule.
Short Cohabitation Period
If one spouse owns considerably more than the other spouse when coming into the marriage and the couple separates having only cohabitated for five years or less, then the court may also order unequal division.
Unequal debt accumulation
If it can be demonstrated that one of the spouses incurred a much greater amount of debt that the other so that they could provide support for the family, then the court may rule that spouse will receive a higher amount in order to compensate them for some of the debt that they incurred.
Are there any other factors that a court might consider in order to make an exception to the 50/50 rule? Yes, but these are a little less common. Other factors that the court might consider include:
- If there is a written agreement or contract between the two spouses which outlines division of property.
- Other factors regarding the property – specifically the circumstances under which it was bought, sold, cared for etc. might prompt the court to deem that unequal division of the property is appropriate.
A final thought
While all of the circumstances listed above could be considered exceptions under the Family Law Act and may be reason for the court to order an arrangement other than 50/50, they are not automatic exceptions. Each case must be examined and argued before the court. They must meet a high standard of scrutiny before the court will consider anything other than equal division.
If you are going through a divorce, and you believe that equal division of the net family property is unfair, then it is important to work with a professional family lawyer who can help you to build your case and, if necessary, convince a judge.
Contact Minhas Lawyers today
Divorce is never easy, but it becomes even more stressful if there is disagreement over how family assets are to be split. If you are considering or have already filed for divorce, having a good family lawyer on your side can relieve much of that stress and help ensure that you are treated fairly during the process. Contact Minhas Lawyers today to book a consultation with a family lawyer.
Minhas Lawyers Professional Corporation is a multi-practice law firm based in Mississauga. We advise and represent clients across various segments and practice areas.
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