Dividing Marital Property in Ontario: What You Need to Know
                     2024-10
Dividing Marital Property in Ontario: 
 What You Need to Know
DivorceGO.ca
What is Considered Marital Property in Ontario?
In Ontario, marital property includes almost everything acquired 
 during the course of a marriage, regardless of whose name it’s  
under. The Family Law Act ensures that each spouse is entitled  
to an equal share of the value of these assets upon separation.
However, certain nuances apply depending on the nature of 
the  assets, ownership structure, and liabilities involved.
Types of Assets Considered Marital Property
When dividing marital property, the following types of assets 
 typically fall under the umbrella of marital property:
 The Matrimonial Home: In Ontario, the matrimonial  
home holds a special status. Regardless of when the home  
was acquired or whose name is on the title, both spouses  
have an equal right to live in the home and share its value  
upon separation. Even if one spouse owned the home prior 
 to the marriage, it is treated as marital property.
 Investments: Any investment accounts or stocks acquired
during the marriage are considered marital property and  
subject to division. If the investments were purchased  
before the marriage but grew in value during the marriage, 
 the increased value is also subject to division.
 Retirement Accounts and Pensions: Retirement accounts, 
 including RRSPs and pensions, are considered marital  
property if contributions were made during the marriage.  
These assets can be complex to divide, especially if the
accounts are tied to employment benefits or future pension 
 payments.
 Personal Belongings: Personal assets such as vehicles, art 
 collections, jewelry, and even household goods acquired
during the marriage may also be considered 
marital  property, depending on their value and 
usage.
Excluded Property: What’s Not Considered Marital 
 Property
Items That Are Excluded From Marital Property
While most assets acquired during the marriage are considered 
 marital property and subject to division, there are specific  
exceptions outlined in Ontario law. The following items are  
typically excluded from the equalization process:
 Inheritances: If a spouse receives an inheritance during the 
 marriage and keeps it separate from marital assets, it is  
generally considered excluded property. However, if the  
inheritance is used to purchase jointly owned property,  
such as the matrimonial home, it may lose its excluded  
status.
 Gifts: Similar to inheritances, gifts from third parties to one 
 spouse are excluded from marital property. This exclusion  
applies only if the gift is not co-mingled with jointly owned 
 assets or used for marital purposes.
 Pre-Marital Assets: Assets acquired by a spouse before  
the marriage are also excluded from equalization, with 
one
significant exception: the matrimonial home. Even if one  
spouse owned the matrimonial home before the marriage, it 
 is treated as marital property and subject to division.
 Damages or Settlements for Personal Injury:
Compensation received for personal injuries, such as pain 
 and suffering, is usually excluded from marital property. 
 However, if the settlement includes compensation for 
lost  wages or medical expenses incurred during the 
marriage,  these amounts may be subject to division.
Division of the Matrimonial Home
The Special Status of the Matrimonial Home Under Ontario 
 Law
In Ontario, the matrimonial home is treated uniquely under  
family law, and its status plays a significant role in property  
division. According to the Family Law Act, the matrimonial  
home is any property that was ordinarily occupied by the  
spouses as their family residence at the time of separation. This 
 special status applies whether the home is a house, condo, or
even a cottage, provided it served as the family’s main 
 residence.
The matrimonial home is unique because:
 Equal Right of Possession: Both spouses have an equal  
right to live in the matrimonial home, regardless of whose 
 name is on the title or mortgage. This right exists even if  
one spouse owned the property before the marriage.
 No Exclusion for Pre-Marital Ownership: Unlike other  
assets, the value of the matrimonial home is not excluded  
from division, even if one spouse brought it into the  
marriage. The entire value of the home is included in the  
equalization of property, meaning both spouses are entitled 
 to share in its value upon separation.
How the Matrimonial Home is Divided, regardless of 
 Ownership
One of the most important aspects of dividing the matrimonial  
home is that ownership does not dictate how the home is  
divided. Under Ontario law, both spouses are entitled to an 
equal  share of the value of the matrimonial home, regardless of 
who  legally owns the property or whose name is on the title.
 Equalization Process: When dividing the value of the  
matrimonial home, the equalization process applies. This  
means that the net value of the home is divided equally  
between both spouses. If the home is sold, the proceeds are 
 split equally, unless there are special circumstances that  
warrant an unequal division.
 Possession of the Home: Even though both spouses have
an equal right to possess the matrimonial home, one spouse 
 may remain in the home after the separation, particularly 
if  there are children involved. In such cases, the court may 
 grant exclusive possession to one spouse, which does not
affect the division of the home’s value but determines who 
 has the right to live in the home temporarily.
Importance of Determining Occupancy Rights and 
 Ownership after Divorce
Determining who gets to stay in the matrimonial home and what 
 happens to the property after divorce is a key issue for  
separating couples. The following considerations are crucial:
 Occupancy Rights: Both spouses have equal rights to live 
 in the matrimonial home, even after separation. However, 
 in some cases, the court may grant one spouse exclusive  
possession of the home. This decision is often made in the 
 best interests of the children if they are involved. It is  
important to note that exclusive possession is temporary
and does not affect ownership or the division of the home’s 
 value.
 Selling or Buying Out: In many cases, the matrimonial
home is sold, and the proceeds are divided equally between  
the spouses. Alternatively, one spouse may choose to buy  
out the other’s share of the home. This allows one spouse to 
 keep the home while compensating the other for their share 
 of the property’s value. The decision to sell or buy out  
depends on various factors, including the financial situation 
 of both parties and whether the home is necessary for  
maintaining stability for any children involved.
 Ownership After Divorce: If one spouse buys out the  
other’s share of the matrimonial home, the title to the  
property will be transferred solely to that spouse.  
Ownership after divorce is typically formalized through  
legal documentation, ensuring that the spouse who retains 
 the home holds clear legal title.
Disputes over Marital Property: How to Resolve Conflicts
Common Disputes That Arise During the Division of Marital 
 Property
Several disputes frequently occur during the division of 
marital  property, which can complicate the separation process. 
These  conflicts often arise due to differing perceptions of 
ownership,  valuation of assets, or emotional attachments to 
specific  property. Some of the most common issues include:
 Valuation of Assets: Disagreements often occur over the  
value of marital assets, particularly when it comes to high-  
value items such as real estate, businesses, or investment  
accounts. Spouses may have different opinions on how  
much an asset is worth, especially if its value has 
fluctuated  over time.
 Ownership Disputes: Even though most assets acquired  
during the marriage are considered marital property,  
disputes may arise over whether certain items should be  
included in the division. One spouse may claim that an  
asset is personal property or should be excluded due to its 
 pre-marital or gifted status.
 Emotional Attachments: Certain assets, such as the family 
 home, heirlooms, or items with sentimental value, can  
trigger disputes when both spouses wish to retain  
ownership. These emotional attachments can make it  
difficult to come to a fair agreement on who should keep  
the property or how it should be divided.
 Debt Division: Disputes can also arise over who is  
responsible for marital debts. Spouses may disagree on how 
 liabilities such as credit card debt, loans, or mortgages  
should be divided, particularly if one spouse feels they did  
not benefit equally from the debt.
Role of Mediation and Arbitration in Resolving Property 
 Conflicts
When disputes over marital property arise, mediation and  
arbitration are two alternative dispute resolution (ADR) methods 
 that can help spouses resolve conflicts without going to court.
These approaches offer a more flexible and less adversarial way 
 to settle disputes, often leading to quicker resolutions and 
lower  legal costs.
 Mediation: Mediation involves a neutral third-party  
mediator who helps the spouses communicate and negotiate 
 a fair agreement regarding the division of their property.  
The mediator facilitates discussions but does not make  
decisions for the parties. Mediation is particularly effective  
when both spouses are willing to cooperate and work  
toward a mutual solution. In Ontario, mediation can be  
voluntary or court-ordered, and it often helps to avoid the  
emotional and financial strain of a lengthy court battle.
 Arbitration: Arbitration is a more formal process than  
mediation but still provides a private and efficient way to  
resolve property disputes. In arbitration, both spouses  
present their case to an arbitrator, who then makes a  
binding decision on how the marital property should be  
divided. The arbitrator's decision is enforceable, similar to
a court order, but the process is typically faster and more  
flexible than going through the courts. Arbitration is a good 
 option when the spouses cannot agree on key issues and  
need a definitive resolution.
When Court Intervention Is Necessary to Settle Property 
 Disputes
While mediation and arbitration are effective for many couples, 
 there are situations where court intervention becomes 
necessary  to resolve disputes over marital property. In Ontario, 
the court  may be required to settle property conflicts when:
 Mediation or Arbitration Fails: If attempts at mediation  
or arbitration do not result in a resolution, or if one spouse  
refuses to participate in good faith, the case may need to go 
 to court. The court will make a legally binding decision on 
 the division of property based on Ontario’s Family Law  
Act.
 Complex Financial Situations: In cases involving  
complicated financial arrangements, such as business  
ownership, significant investments, or hidden assets, court 
 intervention may be necessary to ensure a thorough and  
equitable division of property. Courts have the authority to 
 order financial disclosures and conduct in-depth  
investigations if necessary.
 Domestic Violence or Power Imbalances: In situations
where there is a history of domestic violence or a  
significant power imbalance between the spouses, the court 
 may need to intervene to ensure that one spouse is not  
unfairly disadvantaged during the property division
process. The court can provide protections and ensure that 
 the division is carried out fairly and safely.
 Non-Compliance with Agreements: If one spouse fails to 
 comply with a previously agreed-upon property division,
such as not transferring assets or refusing to sell jointly  
owned property, the court can step in to enforce the terms
of the agreement or impose new terms if necessary.
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