Family Mediator in Ontario
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Division of Assets in a Divorce
Why Division of Assets in a Divorce
Ultimately, divorce and money go hand in hand. During a divorce, regardless of what process is taken, finances will always remain a significant aspect to negotiations, the division of assets in a divorce is a complex portion of the divorce that needs to be done properly. It is not uncommon to be anxious or uncertain about the division of assets in a divorce, as there are various factors to consider and agree upon. Typically, with many marriages, one spouse takes primary responsibility of managing the finances; therefore, when a divorce occurs the other spouse feels uncertain or unaware of the financial status of the couple or how to divide the martial assets. If this is a relatable situation, it is advised to raise any concerns and obtain a professional for financial assistance or inquire about Turning Point Family Mediation. Once a divorce is finalized, it is now the sole responsibility of the ex-spouses to take on their finances individually. It is crucial to be aware of your financial responsibilities in relation to any bank accounts, mortgage loans, credit card bills, and utility payments. In preparation of this new reality, it is essential to organize and manage all finances prior to taking on this responsibility independently. Understandably, this can be a challenging task while dealing with the physical and emotional stress of a divorce; however, without doing so, individuals can experiences great financial hardship in the near future. Although, individuals have the ability to successfully take control of their own finances after a divorce, when a proper financial settlement is created to meet their individual needs.
Within this section, when discussing assets we are referring to; money (financial investments, cash, bank accounts, etc.), pensions, Registered Retirement Savings Plans (RRSP), insurance policies, disability benefits, real estate, businesses, frequent flier miles, and any other properties or financial assets a couple mutually possesses. Essentially, when referring to assets, we are referring to anything a couple owns, which also includes personal and business vehicles, clothing, jewelry, artwork, furniture, appliances, electronics, even family heirlooms.
When obtaining a divorce in Ontario and discussing the division of assets in a divorce, any asset that was acquired during a marriage will be divided amongst both spouses evenly. Typically, if your spouse owns any assets or other assets that are more valuable than the assets or additional assets that you own, your spouse must provide you with the difference in financial value. This expectation is to ensure that both parties are exiting the marriage with fairly equal finances. The division of assets in a divorce and property can be extremely challenging for some couples to agree upon; therefore, couples can allow the court to decide upon these terms for you, although this can get extremely expensive. If a couple decides to let the court divide their assets, properties, and debts, they must claim this within six years of being legally separated or within two years of a divorce being finalized. According to the law within Ontario, everything must be divided equally, regardless of who paid for it in the past or whose name is legally listed. There are professionals and online resources that can assist couples in calculating the equalization of assets and properties during a divorce, which will support spouses in determining how to equally divide their assets and assets and record it on their finalized Separation Agreement.
In Ontario, a family patrimony is the term used when considering a group of assets shared between partners who decide to terminate their marriage. In some cases, the rules for the family patrimony can even apply to common-law relationship; although it is not as common in the eyes of the law. Within the rules of the family patrimony, the assets that are automatically equally shared, regardless of who they originally belonged to or were purchased by, include:
- The matrimonial home or homes
- Vehicles used for family purposes
- Any finances acquired in a pension plan during a marriage
There are a few assets and properties that might be excluded from the family patrimony or the division of assets in a divorce in Ontario. The assets or assets that are excluded from the family patrimony include; income properties, bank accounts, stocks, bonds, jewelry, financial investments, and other personal assets. The rules for this can even apply to money, investments, and assets that was gifted or inherited by one spouse in the relationship from a third party outside of the marriage. Although, it is important to note that if any gifted or inherited money is used to purchase anything during the marriage, then it is challenging to trace; therefore, the gifted or inherited money used to make previous purchases cannot be excluded from the Net family property (NFP) calculations.