Support and Asset Divison Calculation
In Ontario, the division of assets and property when a couple separates is calculated using rules set out in section 7(1) of the Family Law Act (FLA). The aim of this process is to ‘equalize’ the division of property and assets that have been acquired during the marriage.
The calculation, according to Section 8(1) of the same act, takes into account several factors, including:
- Property, debts, and other liabilities
- Deductions claimed as ‘net family property’ (including debts and liabilities at the time of valuation, and the value of all property owned when the marriage began)
- Any property that either party claims should be excluded from the calculation
- All property that has been disposed of during the previous two years or during the marriage, whichever period is shorter
Demystifying Property Division
These calculations can be confusing at the best of times, and divorce or separation is by no means the best of times! Understanding the numbers helps our clients navigate a difficult transition with more peace of mind.
Clarity For Both Parties
At Separate Simply, we work with our clients to make sure all parties understand the kinds of information involved, although in cases of arbitration we recommend that both parties meet with a lawyer so that they can get the clearest legal information possible.
Important Terminology
Below, we explain some of the important terms used in the calculation of support and asset division.
We help our clients avoid getting lost in the woods of confusing jargon.
Support and Asset Division Calculation
What is The Date of Seperation?
The Family Law Act defines the ‘valuation date’ as the earliest of the following dates:
- The date of the final separation, after which point there is no reasonable expectation that the partners will continue living together
- The date divorce is granted
- The date the marriage is declared null and void
- The date one of the spouses is granted a ruling of ‘improvident depletion’, where one party is reasonably concerned that another party will unfairly decrease the value of shared assets
- The date preceding the death of one spouse
Most calculations will use the first date, the day of the official separation. The other dates are only taken into account if this first date of valuation is contested or under other special circumstances.
Mediation works best in cases where both parties agree on the date of separation and the date of valuation.
Whats Counts as Property?
The Family Law Act includes a definition of property that is, by necessity, very broad. This definition includes property:
- That a spouse has sole or partial control over (e.g., business interests or real estate)
- That has been disposed of by a spouse but that the spouse maintains a power to revoke this disposal or a power to consume or dispose of the property (such as a trust, equity, or bonds)
- That includes rights under a pension plan that the spouse has made contributions toward
It is important that both parties provide a full and accurate account of their assets and property, to make the process of support and asset division as quick and straightforward as possible.
Next Steps
At Separate Simply, we can help talk you through the different elements of the support and asset division calculation, and help both parties come to an agreement that works for everyone involved.
We recommend consulting with a lawyer as a supplement to the process, but mediator-assisted financial separation is a low-conflict alternative to family court, and as such has become increasingly popular with families in Ontario.