How does the court deal with family property?
The property regime for married couples (not common law couples) is governed by the Family Law Act in Ontario. (There are no automatic rights to share property granted to non-married people, these are governed by trust principles.)
The basic premise is that the parties will “equalize” their net family properties. This means that one spouse will pay the other half the difference between their respective net family properties calculated as of the date of separation.
For example, if the husband had $100K in assets and $20K in debt, his net family property would be $80K (i.e. 100-20=80). If the wife had $90K in assets and $20K in debt, her net family property would be $70K (i.e. 90-20=70).
The husband in this scenario would have to pay the wife half of the difference of $80K-$70K = $10K divided by two = $5K.
The individual items of property would usually remain the property of the person in whose name it is registered. Property owned before the marriage remains the property of that person and its value at the date of marriage is deducted from his/her net family property.
Some property is excluded, such as gifts, or inheritances from third parties, that exist on the date of separation or property that can be traced to that gift. However, if the gift or inheritance was, or is now, a matrimonial home, it is not excluded.