Equalization… There’s No Time Like the Present
When a marriage ends, it is likely that both parties will want to leave the relationship with a fair share of what they’ve accumulated throughout the relationship. The best way to do so is to divide assets and debts so that This process is called equalization of net family property and is an important part of family law. In Ontario, the Family Law Act (“FLA”) sets the rules for how spouses can claim equalization.
If you’re in Ontario, it’s important to know your rights under the FLA to make sure you receive what you’re entitled to and understand what your obligations are.
Property Equalization Under The Family Law Act
The FLA outlines the situations that allow you to claim equalization[1]. These situations include, divorce, marriages declared invalid, separations with no prospect of reconciliation, and concerns about one spouse recklessly spending their shared property[2].
Time Limitations
There are also time limits to consider. An equalization claim must be made within two years of the marriage ending through divorce or annulment, within six years of separation with no chance of getting back together, or within six months of the first spouse’s death[3].
Who Can Make a Claim & The Exceptions
The FLA affords spouses, former spouses, and deceased spouses’ personal representatives the ability to apply for equalization of net family property[4]. For the purpose of equalization, a “spouse” is defined as either of two persons who are married to each other or have together entered into a marriage that is voidable or void, in good faith[5].
Therefore, common law partners are not considered “spouses” for the purpose of equalization and are not entitled to claim equalization of assets in the event of a separation. Nevertheless, it is important to note that common law partners are not left without any remedy. If you are in a unmarried relationship and wish to understand your rights concerning common law property division, the article Property Division for Unmarried Spouses may provide valuable insight.
While the FLA generally makes equalization claims a personal matter between married spouses, there are exceptions[6].
Exception 1: If one spouse starts an equalization application before they pass away, their estate can continue the claim even after their death[7]. Likewise, if a spouse starts a claim, and their former spouse later passes away, the former spouse’s estate can continue to defend against the claim[8].
Exception 2: In cases where one spouse has accumulated more wealth during the relationship and then passes away, the surviving spouse can initiate an equalization application against the deceased spouse’s estate.
Timing Is Everything
When it comes to equalization claims in family law, timing is everything. If a spouse starts the process for equalization BEFORE they pass away, their estate can carry on the claim[9].
However, it is important to keep in mind that the law does not permit a deceased spouse’s estate to COMMENCE an application for equalization AFTER their passing[10]. In other words, if a claim for equalization has not been started before a spouse’s death, it’s too late to initiate one. In essence, death serves as an absolute barrier to starting a claim for equalization.
Let Us Help You
Understanding your rights to claim for an equalization upon the breakdown of your marriage is crucial during separation and divorce. Knowledge of your rights can empower you to navigate legal proceedings confidently. Due to the complexities surrounding equalization, it is highly recommended to seek professional legal counsel. Each case is unique, and specific circumstances can affect your claim to equalization.
Why Choose Hummingbird Lawyers LLP
Taking the first step toward resolving your legal matters is as simple as reaching out to us at Hummingbird Lawyers LLP. We offer a comprehensive range of legal services, including Family law, Real Estate Law, and Wills & Estate Law. These interconnected legal matters can significantly impact the separation and divorce process.
To make things even more convenient for you, we have offices in Toronto and Vaughan. Our dedicated team of qualified, skilled, and experienced lawyers is committed to providing you with the utmost convenience, expertise, and guidance you deserve.
With our extensive experience in family law, we carefully analyze each case to determine whether litigation or mediation is the better approach.
Our priority is establishing decision-making responsibility and parenting plans early on to safeguard the best interests of children.
Our dedicated team of qualified, skilled, and experienced lawyers is committed to providing you with the utmost convenience, expertise, and guidance you deserve.
Don’t hesitate to contact our office to learn more about how we can assist you with your family matters.
Contact Us
Hummingbird Lawyers LLP has two offices for your convenience. Providing qualified, skilled and experienced lawyers in Toronto and lawyers in Vaughan, we are committed to giving our clients the convenience, expertise and guidance they need. If you’re seeking an experienced divorce lawyer to discuss equalization of net family property fill out the form and we will reach out to you as soon as possible.Related Articles:
References and Footnotes
- Panangaden v Panangaden Estate [1991] CarswellOnt 538, at para 9 ↩
- Family Law Act, R.S.O. 1990, c. F.3, s.5(1), s.5(2), and s.5(3) ↩
- FLA, s.7(3) ↩
- FLA, s.7 ↩
- FLA, s.1(1). ↩
- Bradford Estate v Kingdon [2022] ONSC 6204, at para 34(a); FLA, s. 7(2)(a) & s.7(2)(b) ↩
- FLA, s.7(2)(a). ↩
- FLA, s.7(2)(b). ↩
- Bradford Estate, at para 35 ↩
- Rusinek & Associates Inc. v Arachchlage [2021] ONCA 112, at para 53 ↩
