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Frequently Asked Questions
What is property equalization in Ontario?
Property equalization is the process of dividing the increase in value of each spouse’s net worth accumulated during the marriage. The spouse with the higher net family property pays half the difference to the other spouse.
How is net family property (NFP) calculated?
NFP is calculated by subtracting the value of assets and debts on the date of marriage from the value of assets and debts on the date of separation. Certain exclusions and deductions (like inheritances or gifts) may apply
What property is excluded from equalization?
Excluded property includes inheritances, gifts from third parties, personal injury awards, and certain insurance proceeds, if kept separate from joint assets. The matrimonial home is not excluded, even if it was inherited or owned before marriage.
Does property equalization apply to common-law couples in Ontario?
No. Property equalization under the Family Law Act applies only to married spouses. Common-law partners are not automatically entitled to a share of each other’s property and must rely on trust claims or specific agreements.
Can spouses agree to divide property differently than equalization rules?
Yes. Spouses can negotiate their own terms in a separation agreement, which can differ from what the law provides, as long as both parties disclose their finances and the agreement is fair and voluntarily entered into.