Property Division and Equalization

What is an Equalization Payment?

If you are married and are separating from your spouse, you are entitled to an equalization of your family property. This is the notion that the property acquired during the course of the marriage should be split between partners equally. Equalization ensures that when people are leaving a marriage, they both have the same net worth, as the law views marriage as an equal partnership.

This does not mean however that the property itself is split equally; just their value. A major misconception with separating spouses is that you have to split all the property in half in order for it to be fair. For example, just because you have a pension and are separating from your spouse, it does not mean that your spouse automatically can have half of your pension transferred to them. Since it is only the values of each person that is to be equalized upon separation, you and your former spouse can agree to divide your assets and property in different ways while still ensuring that you both leave the relationship on the same financial footings. A lawyer can help negotiate with your former partner or their lawyer to come up with solutions for dividing your property in a way that works for both of you.

How do I know if I should be getting an Equalization Payment?

In order to determine what the equalization payment should be and which spouse is to receive the payment, it is necessary to determine what each person’s Net Family Property Value is.

Each of your net family property values are determined by taking a “snapshot” of what each person was worth/owned on the date of marriage and what each person was worth/owned on the date of separation. The more property and assets involved, the more confusing and complex it can be. There are also special rules regarding matrimonial homes, inheritances and gifts, which can affect each person’s net family property value. A lawyer can help to ensure that all assets accumulated throughout the marriage are included, while all other property is treated properly and protected.

How is property divided if I am not Married?

If you are not married, or are in a common-law relationship and have separated from your partner, division of property is different compared to married couples. There is no entitlement to equally sharing property for common-law couples upon separation, and usually each person keeps the property they had when the started the relationship and the property they got when they were in the relationship. You are only obligated to share your property with your former common-law partner when the property is owned together.

You may however be entitled to a division of your former partner’s pension depending on the individual pension plan and how long you have been together.

What if it is Unfair that I am not Entitled to my Ex’s property?

If you believe that you should be entitled to your former partner’s property, despite not being on title to the property or not owning it together, you may want to speak to a lawyer about a constructive trust claim based on unjust enrichment. To be able to be successful in your claim to their property based on unjust enrichment, you must show:

  1. your partner received a benefit from your contribution
  2. you suffered a corresponding loss; and
  3. there is no juristic claim to explain the benefit and corresponding loss.

If you are able to prove unjust enrichment, the court can make either one of two different orders. The first is an order for a constructive trust, the notion that your former partner was holding some of the property on your behalf and therefore you have an actual interest in the property. The second option is a monetary award, to compensate you based on your contributions, however you do not receive an actual interest in that specific piece of property.  A monetary award is going to be more likely ordered if you are not able to prove that a constructive trust is appropriate.