Separation

Equalization Payment

Property acquired by a legally married couple during their marriage will need to be catalogued, valued, and apportioned to ensure each spouse leaves the marriage with an equal amount of the wealth that was accumulated during the marriage. At Licata Law, our lawyers have been assisting clients with simple and highly complex property equalization. We have a combined in-house experience managing the division of complex business assets, stock options, pensions, and situations involving multiple matrimonial homes in a separation or divorce. We work with each client to develop a comprehensive account of all assets of the marriage early in the process to ensure their rights with respect to all family property are preserved.

The Family Law Act provides an equalization formula to divide family property and assets upon separation. It requires separating spouses to identify and disclose all assets and debts on certain dates, the nature and source of the assets and debts, and values on these dates. Business interests, family trusts, pensions, the matrimonial home and all other property and assets must be taken into consideration. Many assets owned by spouses in a marriage will need to be valued and divided to ensure each spouse exits the relationship with a fair allocation of property and/or value. This includes the following:

Bank accounts, including investments, savings and other financial assets.

The matrimonial home, which can be applied to more than one real property. For example, if one spouse also owns a cottage which the family regularly used, this may also be included in the equalization.

Business interests, including a private family business, or stocks and stock options in publicly traded corporations and other corporate and business investments.

The value of pension plans, if applicable.

Certain property acquired during the marriage does not have to be included as family property for equalization.

Any property other than a matrimonial home acquired by one spouse as a gift from a third party during the marriage.

Any income generated or any accretion in value of assets generated from the gift received during the marriage if it exists on the date of separation in the name of the donee.

Inheritances received during the marriage.

Note that income from the inheritance is NOT excluded unless a provision is specifically found in the Last Will & Testament of the deceased donor.

Common law spouses are generally not entitled to the same property rights as married spouses. As a rule, each spouse will leave the relationship with the assets they own in their own names. Property purchased jointly will be shared. In addition, the concept of a ‘matrimonial home’ does not apply to common law relationships. If one spouse holds title to the home, s/he is not obligated to share the value with the other common law spouse upon separation. Of course, there are exceptions to the rule. In some circumstances, a case can be made for dividing property where the non-owner spouse made significant contributions to a property. However, in most cases, each spouse will leave with the debts and assets they own independently.

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