Part of getting a divorce requires equalization property division between the divorcing couple. The Family Law Act ensures that all couples who do not have a prenup – marriage contract – go through the equalization process to divide property between the couple.
Property includes any type of real property, real estate, bank accounts, retirement accounts, businesses, and so on. The type of property that is excluded from equalization is rather narrow.
What does equalization of property mean for divorcing couples?
Under the terms outlined in the Family Law Act, each party is entitled to a fair distribution of property the couple owns when they separate and get divorced. As soon as you are married and your marriage license is signed, you and your spouse have entered into an agreement where if you get divorced, you will equally divide any property.
Under the terms outlined in the Family Law Act, some types of property that may require an equalization between the divorcing couple could include:
- The Marital Home (Matrimonial Home) – You may have to share the entire value of the home you lived in while married, even if you owned it prior to getting married.
- Inheritance and Gifts – If you received a substantial inheritance or gifts of any value, your spouse could be entitled to a share of their value, even if they were not intended for them. (however, in some circumstances, these may be excluded)
- Investments – If you have an RRSP, TFSA or other investment, this would get divided.
- A Business You Own – If you own a business, even if your spouse does not physically participate in its operation, you could be required to share the value of the business with them when you get divorced.
What if I want to avoid sharing property if I get divorced?
While you must go through the equalization of property process during a divorce, things are handled differently when you have a marriage contract in place. The marriage contract outlines what your intentions are for various types of property and assets. Our Ottawa family lawyer will guide you in detail about the types of marriage contracts.
The marriage contract allows you and your spouse how to handle the division of property in the event of a divorce. For example, your marriage contract could protect inheritance and gifts left just to you and not equally for you and your spouse. You can also protect your business, investments, and even real estate acquired before your marriage.
Equally, your spouse can use the marriage contract to protect their property and assets. The marriage contract even allows you and your spouse to decide the terms of the division of property, as well as the divorce agreement.
Even if you are already married, you and your spouse may still be able to protect certain property and assets with a marriage contract. To find out if a marriage contract is right for you and if you are looking for help drafting and creating a legally binding marriage contract in Ottawa, contact Davies Law Firm at (613) 688-0462 today, for the legal advice and guidance you need, to protect your interests.