Where the parties lived in Ontario and separated in Ontario the Family Law Act governs the division of property, of assets and liabilities. Under this act common law spouses do not share property. In simple terms married couples share in the increase (or decrease) of their properties during the marriage. This net family property is calculated for each spouse by adding the assets (less the debt) at the time of separation and deducting the value of the assets (less the date) at the time of the marriage. These net family properties are 'equalized'. The spouse with the higher net family property is required to make a payment to the other spouse to equalize the properties. Sometimes the result is just to divide up debt.
Naturally there are exceptions.The first exception deals with the matrimonial home. If a spouse brings a home into the marriage and they still occupy it at separation, the entire equity of the home goes into the pot for the purposes of division, no exceptions. However, if they have moved on to a second home, the spouse who brought the original home into the marriage does get credit for it.
With some exceptions, gifts or inheritances kept separate do not go into the marriage pot, likewise damages to one spouse in personal injury or
tort settlements kept separate. Income from gifts or inheritances are treated in similar fashion.
The cash surrender value of a life insurance policy goes into the pot while life insurance amounts payable on the death of a spouse, do not.
Sample (Simplistic) Division
|Asset #1 $5000||Asset #1 $3000|
|Asset #2 $2000|
|Total Assets $7000||Total Assets $3000|
|Debt #1 $3000||Debt #1 $1000|
|Difference = $4000||Difference = $2000||Net Family Property of Husband = $4000||Net Family Property of Wife = $2000|