Separation and divorce can have a huge financial impact on both spouses. It is therefore in the interest of both parties to engage qualified professionals to assist with the division of assets, property and matrimonial home. As a Midtown Toronto family & divorce lawyer , I’ll work on your behalf to achieve the best possible outcome.
Following a separation, you are typically entitled to keep any property you brought into the marriage. However, you are obliged to share any increase in that property’s value over the course of your time together, as is your spouse. In most cases, this means that one of you will have to pay the other what’s referred to as an equalization payment.
The way the equalization payment works is essentially as follows: You and your spouse each prepare a statement of your assets at the date of separation, less your debts. You then each deduct the net value of your assets at the date of marriage. The total is considered your net family property. The spouse with the higher net family property pays the spouse with the lower net family property an equalization payment of one half the difference between the two values.
When calculating equalization payments, full financial disclosure is required from both parties – a process that is as complex as it is time-consuming. It’s worth noting that equalization payment claims must be made six years after the date of separation or two years after a divorce, whichever comes first.
Be it your primary home, family cottage or ski cabin, a matrimonial home is any property that you or your spouse have an interest in and have occupied as a family residence. The terms of property division discussed above do not apply when dividing a matrimonial home after separation.
Given the role the matrimonial home plays – not only to each spouse but also to their dependents – it is given special treatment. For example, neither spouse can legally sell the home without the other’s permission. Both spouses are entitled to live in the home, regardless of who has legal ownership of the property. Furthermore, the property division rule entitling you to deduct from the calculation of your net family property any property you brought into the relationship does not apply to a matrimonial home.
Upon separating, both married and common-law spouses may be entitled to receive or obliged to pay spousal support. Unlike basic child support, which is the right of the child and somewhat pre-determined in terms of amount by provincial guidelines and other criteria, there is more discretion when it comes to spousal support.
Ultimately, both spouses are expected to become financially independent as soon as they can after separation. However, in certain situations, this may be unrealistic. For example, one spouse may struggle to find work because of a lengthy absence from the work force, say because of having been a stay-at-home parent.
Ideally, with the assistance of your lawyers, you and your spouse will be able to successfully negotiate a separation agreement outside of court that sets out the amount of spousal support to be paid, as well as the duration. Should you be unable to reach an agreement, however, this becomes a matter for the courts.
Combining strong negotiation skills with a solid understanding of all rules and processes pertaining to the division of assets, property and matrimonial homes, I’ll work on your behalf to achieve the best possible outcome.