Property Division upon Separation and Divorce or Death of a Spouse



What level of government has jurisdiction over property rights?

Under the Canadian constitution, Provinces have the right to set out the rules for property division for married and common law couples when there is a relationship breakdown or death.

The information below relates only to the law of the Province of Ontario. In Canada, each Province has its own property legislation which in some cases is similar to that of Ontario but not necessarily the same.

Property Division upon Separation and Divorce

For the rules about dividing property, does it make a difference whether the couple were married or living common law?

Yes. For most family law issues, it does not matter if you and your spouse were legally married or living common-law. But when it comes to the rules about property, there are some important differences. When couples separate, the way their property is divided depends on whether or not they are legally married.

Married couples automatically share the value of their property if they separate or if one spouse dies. This is not true for common law couples

What’s the difference between being married and living common law?

“Married” means a couple who had a legally recognized marriage ceremony.

Living “common-law” refers to couples who live together as spouses, but have not legally married each other.

Living together for many years, having children together, or referring to each other as “husband”, “wife”, or “spouse” does not make them legally married to each other.  Couples who are unmarried but live together as if married are called “common law” couples primarily because it is the common law, and not Ontario legislation, that governs their property rights on relationship breakdown. Ontario has no legislation that deals with the property rights of common law couples.

What is property?

Under s. 4(1) of the Family Law Act, R.S.O. 1990, c. F.3,

“property” means any interest, present or future, vested or contingent, in real or personal property and includes,

(a) property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself,

(b) property disposed of by a spouse but over which the spouse has, alone or in conjunction with another person, a power to revoke the disposition or a power to consume or dispose of the property, and

(c) in the case of a spouse’s rights under a pension plan, the imputed value, for family law purposes, of the spouse’s interest in the plan, as determined in accordance with section 10.1, for the period beginning with the date of the marriage and ending on the valuation date[.]

Property includes everything you own. Examples are:

  • your home and any other real estate
  • your car and other vehicles
  • personal items, such as clothing, jewellery, books, and music
  • household items, such as furniture, appliances, and electronic equipment
  • bank accounts, RRSPs, TFSAs, investments, pensions, insurance policies, stock options, and other financial assets
  • future commissions
  • any businesses.


What is the general principle of property division for married couples?

The law says that married spouses share responsibility for household management, earning income and childcare during their marriage. A marriage is considered an equal partnership. When a marriage ends, the partnership ends and property has to be divided.

To recognize the equal contribution of each person, the general rule is that the value of any property that you acquired during your marriage and that you still have when you separate must be divided equally, 50-50. All the wealth that the couple accumulated during their marriage is to be divided equally between them; it must be shared. Only property that was acquired by the joint efforts of the couple is to be shared. The difference between the net worth of property at the date of separation and its net worth at the date of marriage constitutes the wealth that accumulated during marriage and is called “net family property” (defined in s. 4(1) of the Family Law Act).

Ontario’s Family Law Act regulates the rights of spouses and dependants regarding the division of property for legally married couples, matrimonial home, support, inheritance, prenuptial agreements, separation agreements, and other family law matters. When a married couple separates, generally each spouse keeps their own property but they share any increase in the value of their property that occurred during their marriage. This usually means that one spouse must give the other spouse an “equalization payment” (see below).

The law here is complicated. A family lawyer can help you understand your property rights.

How does the current Family Law Act fundamentally differ from the previous Family Law Reform Act which it replaced?

The Family Law Act (FLA) replaced the previous Family Law Reform Act (FLRA) in 1986.  Under the FLRA, all assets were deemed to be “family assets” regardless of ownership. Subject to certain restrictions, they were equally divided between spouses, regardless of which spouse had title.

In 1986, a fundamental philosophical change in the division of property occurred with the introduction of the current Family Law Act. As a result, legal title was recognized for property division purposes.

The legislators included specific provisions about the matrimonial home to protect certain rights of a non-titled owner/spouse, including possession and exclusive possession. The matrimonial home is not deemed to be jointly owned.  An owner accounts for the full value of the home for property division purposes, but each party has an equal right to reside in the home (see further below).

What property is excluded from the property division rule?

Section 4(2) of the Family Law Act defines “excluded property”. It includes:

  • gifts you received during your marriage from someone other than your spouse
  • property that you inherited during your marriage
  • money that you got or that you have a right to get as a result of a personal injury, like a car accident
  • money that you received from an insurance company because someone died.


If property is acquired by one spouse from someone outside the marriage by way of a gift or by way of inheritance, for instance, then the value of that particular property is not shared because it is not the product of the contributions made by the couple during the marriage.

The family home is another exception to the general rules. When your marriage ends, the full value of the family home must be shared even if one of you owned the home before you were married, received it as a gift or inherited it.

Once money is put into the family home it must be shared, even if the money came from a gift or an inheritance or other property that the law says you do not have to share with your spouse. Unlike other types of property, you do not get to keep for yourself what the house was worth at the time of your marriage.

What is the time limit to make an equalization payment claim?

The time limit to make a claim for an equalization payment is six years after the separation or two years after a divorce, whichever is sooner. Sometimes a court will give an extension of time to make a claim.

What is the first thing I and my spouse must do in determining our respective share of the family property?

You and your spouse must first separately calculate the total value of your share of the family property according to the legal rules. You must be truthful and fair. If you go to court, you must prepare a full financial report of all your property, debts and income. You must swear that it is accurate.

How does equalization work?

If a married couple separates, one spouse usually must pay the other spouse money called an “equalization payment”. The two main steps for determining the amount of the equalization payment are described below. This is just an example to show how the general rules work. Other rules and exceptions might apply to the facts in your case. A family lawyer can advise you about this.

Step 1:

Each spouse must calculate his or her “net family property” (NFP). To do this, each spouse adds up the value of his or her property (less any debts) on the date of separation and subtracts the value of his or her property (less any debts) on the date of marriage. Here is an example:

Calculate Net Family Property (NFP)

Spouse A
Now (Separation Date) $800,000
Then (Marriage Date) $40,000
Now minus Then $760,000
So, NFP for Spouse A is $760,000
Spouse B
Now (Separation Date) $200,000
Then (Marriage Date) $40,000
Now minus Then $160,000
So, NFP for Spouse B is $160,000


Step 2:

The spouse with the higher NFP then pays the other spouse half of the difference. This is the equalization payment. For example:

Calculate Equalization Payment
Spouse A NFP $760,000
Spouse B NFP $160,000
Spouse A minus Spouse B $500,000
$500, 000$500,000 divided in half = $250, 000
Equalization Payment:
Spouse A pays $250, 000 to Spouse B


As Spouse B in the above example, I am entitled to a payment of $250,000. Do I get this in cash?

Possibly. The payment can be paid in cash. It can also be made by giving you property worth $250,000. How the payment will be made is one of the things that you can arrange in your separation agreement or that the court can decide.

What is the nature of my right upon equalization?

You have a right to a payment, not a right to property.  There is now a debt owed from one spouse to the other. Like any other debt, if the party owing the debt goes bankrupt, then the party to whom the debt is owed loses out.

Are there any special rules?

Yes, as noted, for matrimonial homes and for gifts and inheritances.

What is the special rule for matrimonial homes?

A “matrimonial home” is a home where a married couple had been living together just before they separated. There can be more than one matrimonial home; for instance, a cottage could be included.

When calculating a spouse’s NFP, the value of his or her property on the date of marriage does not include any home that is a matrimonial home on the date of separation. This means if the same spouse still owns the home on the date of separation, his or her NFP will include the home’s entire value, not just its change in value during the marriage. This can have a huge effect on how much the equalization payment will be, or who must pay it.

It is hard to know in advance if a particular home will be considered a matrimonial home because a couple may not know where they will be living if and when they separate.

What is the special rule for gifts and inheritances?

Any gift or inheritance that a spouse received during the marriage is not usually included in their NFP calculation. But if the gift or inheritance was used to buy or help pay for a matrimonial home, it is included.

I built an addition to my house that cost $10,000 and added $20,000 to the value of the house. Upon separation can I get the $20,000 back?

No. The law says you have to share the full value of your family home with your spouse. It doesn’t matter if you put work or money into your home. There are some very limited exceptions to this rule.

During my marriage my mother gave me an expensive painting. If I sell the painting, is the money I get for it part of the property I must share with my spouse if we decide to separate?

Not necessarily. If you keep the money separate, for instance, in a bond or GIC, so that you can trace it to the sale of the painting, it will be excluded from the property you must share at the end of your marriage.

As noted, there is an important exception to this general rule that affects the family home. If you use the money from the sale of the painting to pay down the mortgage on your family home or to renovate it, you must share the full value of the family home with your spouse if you separate. Money put into the family home must be shared, even if the money came from a gift or an inheritance or other property that you generally would not have to share with your spouse.

My wife left me for another man. Why must I share the value of my property with her now?

Your wife’s new relationship has no effect on the division of property at the end of your marriage. The law on dividing family property has nothing to do with why your marriage has ended. At law a marriage is an equal partnership. When it is over, the financial benefits of the partnership must be divided evenly and fairly. The calculations are made without considering who is at fault or who is to blame.

Does a spouse’s behaviour affect how property is divided?

Usually not.

If I win the lottery the day after I separate, must I share my winnings with my spouse?

No (unless your spouse helped you buy the ticket).  The law in Ontario is only interested in the value of property accumulated during marriage; that is, the change in values of property owned by each partner from the date of the marriage to the date of the separation. Only the value of property accumulated during the marriage gets shared.

What is the general principle of property division for common law couples?

The rules about property division in the Family Law Act do not apply unless you are legally married. If you are in a common law relationship, the property you bring into the relationship, plus any increase in its value, usually continues to belong to you alone. If you and your spouse separate, there is no automatic right to divide it or share in its value. Only married couples have an automatic legal right to half the value of family property.

Anything you buy for yourself with your own money during the relationship and own in your name usually belongs only to you. Things that you and your spouse buy together during the relationship belong to you both jointly. If you separate, the things you own jointly will be divided or their value shared.

You can ask your spouse to pay you back for your contribution to property that your spouse owns. If your spouse does not agree, you can go to court to make your claim. But the claim will be based on another area of law, not family law. A lawyer can advise you about possible causes of action.

It is a good idea to keep receipts, registrations, and other proof of ownership in case you later disagree about who owns what.

Ontario courts have historically granted common law spouses entitlement to compensation, monetary or property, against another common law spouse on the basis of the equitable principles of unjust enrichment, quantum meruit and, formerly, resulting trust.

If you have contributed financially or in some other way to your spouse’s property, you might be able to claim a share. For example, you might have done unpaid work at home so your spouse could do paid work, or you might have worked in a family business. A court would look at whether your spouse was “unjustly enriched” at your expense.

Unjust enrichment relief will be granted when a claiming common law spouse can prove:

  1. that the claiming spouse has provided enrichment or benefit to the other spouse;
  2. that the claiming spouse suffered a corresponding economic deprivation;
  3. that there was an absence of juristic reason (i.e. no reason in law or justice) for the common law spouse claimed against to retain the benefit conferred by the claiming  spouse.

If you are awarded a share of your common law spouse’s property, the size of the share may be based on the size of your contribution or on how much your contribution increased the value of your spouse’s property.

What is a “joint family venture” within a common law marriage?

The Supreme Court of Canada in the important case of Kerr v Baranow, 2011 SCC 10, labeled common law relationships in which unjust enrichment entitlement arises as “joint family ventures” (“JFV”).  The court held that the claiming spouse must show that there is a joint family venture and that there was a link between his or her contribution to the venture and the accumulation of wealth. In other words, a claiming spouse might have a right to the other party’s property by having legal title or a right to that party’s property over the years as a result of a joint family venture.

Some of the factors listed in establishing that a common law relationship was a joint family venture are:

  1. the pooling of efforts
  2. the decision to have and raise children together
  3. the length of the relationship
  4. the joint contribution to a common financial pool
  5. the use of parties funds entirely for family purposes
  6. the extent of economic integration of the family such as the sharing of expenses and amassing common savings
  7. the priority of family (ie: contributing spouse leaving the workforce to raise children   or relocating to benefit the other spouses’ career.
  8. What are the rules about living in or selling the family home?

The rules about who gets to stay in the family home, and who can sell it, depend on whether you were married or in a common law relationship.

Married couples

A “matrimonial home” is a home where a legally married couple had been living together at the time of their separation. The matrimonial home is defined as “every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his spouse as their family residence” (s. 18(1), FLA).  The couple can have more than one matrimonial home, such as a cottage, condo, farm or chalet.

Each married spouse has an equal right to stay in the matrimonial home until it is sold or until there is a court order or agreement, even if the legal title to the property is only in one of their names. You cannot put anything in your marriage contract to change this. Neither spouse can sell or mortgage a matrimonial home without the other spouse’s written permission.

Common law couples

The rules for matrimonial homes do not apply to common law spouses. A common law spouse does not automatically have the right to stay in the family home if it is not in his or her name. If one common law spouse owns the home they can sell or mortgage it without the other spouse’s permission.

What are the rules about debts?

In both married and common law relationships, you are usually responsible for repaying only your own debts, unless you have an agreement saying who is responsible for which debts.

But if you both signed a loan agreement, you are both responsible. This is true for any two people who sign a loan together, whether or not they are spouses. Either one of you can be held liable for repaying the entire debt. Even if you did not benefit from the loan, you might have to repay the entire loan if the other person does not pay it.

In a legal marriage, debts are taken into account when each spouse’s NFP is calculated (see Equalization above).

Can we make a binding written agreement about property division?

Yes. If you and your spouse want to make other arrangements for sharing property if your relationship ends, you can make a written agreement. It is either a “cohabitation agreement” (if you are living together common law) or “marriage contract” (if you are legally married). In the agreement, you can specify how you want to arrange your finances during your relationship and how you want to deal with your property and debts if you separate.

Before making the agreement, you should each make a detailed and complete statement of your financial situation. You should get separate independent legal advice.

To make the agreement legal or to change it later, you both must sign it in front of a witness who must also sign it.

If your relationship has already ended, you can make a separation agreement. In it you are free to divide your property any way you want.

What is “independent legal advice”?

Independent legal advice means that you and the other party or parties involved with your case get advice from different lawyers. A lawyer should give advice to or represent only one party; if not, this is a conflict. Even if you are friendly with the other party, both of you should still get advice from different lawyers.

Can a judge change or undo a cohabitation agreement or marriage contract?

A judge will usually not change or undo a cohabitation agreement or marriage contract if just one spouse wants to change it. But in some cases a court might do this if, for example, a spouse:

  • lied about his or her finances,
  • did not understand the agreement, or
  • was under pressure to sign the agreement.


My husband has been paying into company pension plans for 41 years. If we separate, do I have a right to share his pension?

Yes. A pension is included in the calculation of your spouse’s share of the family property at separation. If an equalization payment is owed to you, you can also agree or ask the court for an order for all or part of the payment that is owed to you to be made from the pension.

As soon as you separate, you are no longer entitled to spousal benefits under pension law.

What happens to Canada Pension Plan credits?

The Canada Pension Plan (CPP) is a federal benefit plan for workers. Most workers and their employers make regular CPP contributions so that when the worker retires, or can no longer work because of disability, they can get a pension. The amount of this pension depends on the size of the contributions.

If a couple lived together for at least one year, the CPP pension credits that they both earned while they were together can be added up and then divided evenly between them if they separate. This is sometimes called a credit split or a “Division of Unadjusted Pensionable Earnings” (DUPE). If you earned less than your spouse, this may help you qualify for a pension. Or, it might increase the amount of your pension if you already qualify.

Is there a time limit to apply for a Division of Unadjusted Pensionable Earnings (DUPE) from CPP pension credits?

Usually there is no time limit to apply for a DUPE if you were legally married. But if your spouse died after you separated and you did not get divorced, you must apply within three years of your spouse’s death.

If you were in a common law relationship, you must apply within four years after separating unless both of you agree in writing to remove this time limit. Also, you must wait until you have been separated for at least one year, unless your spouse died in that first year after you separated.

Property Division upon Death of a Spouse

What happens to property if a legally married spouse dies?

If there is a will:
If your spouse to whom you were legally married dies leaving a will saying how his or her property is to be divided, you have a choice. You can either take the property left to you in the will and property that you receive that was owned jointly or you can divide your family property using the same rules that apply in the case of separation (above).

Using these rules may be to your financial advantage if your husband or wife left most of his or her property to other members of your family or to other people.

You will have to make a list of all your property in the same way that you would if you separated. You must value your property according to what it was worth the day before your spouse died.

If the deceased had legal obligation to support a child, a former spouse, or other dependants, the will must leave enough to take care of them. If it does not, they can ask the court to change the will to give them support.

If there is no will:
Legal rules, called “intestacy” rules (in Ontario, the Succession Law Reform Act) say how property is to be divided among the surviving family. The surviving spouse can accept the property division according to that law, or can divide the property using the rules that apply on separation (above).

What are the inheritance rules for married spouses?

As noted above, if you are legally married and your spouse dies leaving a will, you can choose whether to claim an equalization payment or receive what was left to you in the will.

If your spouse dies without leaving a will, you can choose whether to claim an equalization payment or inherit your share according to the “intestacy” rules. These rules give married spouses and children the right to inherit property when there is no will.

What are the inheritance rules for common law spouses?

Common law spouses do not inherit any of their spouse’s property unless it was left to them in a will. If your common law spouse dies without leaving a will, the intestacy rules will give their property to their children or other relatives, not to you. So if you are in a common law relationship, each of you must make a will if you want to choose what you want done with your property when you die.

What are the rules about joint property?

If your spouse dies, you usually become the sole owner of any money or property that you both owned jointly. This is true whether or not you were legally married. For example, you usually have the right to all the money in any joint bank account and you become the sole owner of any real estate that the two of you held in “joint tenancy”. This is not affected by a will or the intestacy rules.

Similarly, you would also inherit life insurance money and RRSPs if you are listed as a “beneficiary” in the insurance policy or RRSPs.

How much time do I have to decide whether to use the law on dividing family property on separation to divide our family property after my spouse dies?

You have six months from the time of your spouse’s death to file a document with the court stating that you wish to use these laws to divide your family property. A lawyer can advise you.

Do I have the right to stay in the family home after my spouse dies?

If your spouse owned your family home and left it to someone else, that person cannot claim your home the day immediately after your spouse dies. You have a right to stay in your family home for 60 days. You will not have to pay rent during this time.

Do support payments continue after the payor spouse dies?

This depends on the situation. Your domestic contract or agreement can say that your former spouse’s estate must continue to make your support payments after death.

  1. Before 1986. Support arrangements made before March 1, 1986 or under the Divorce Act must be paid by a person’s estate only if the domestic contract, agreement or the order says they must continue after the payor’s death.
  2. From 1986. If you have been receiving support payments under a court order made under the Family Law Act (on or after March 1, 1986), your former spouse’s estate must continue to make support payments, unless the court order says something different.

If your order is made under the Divorce Act and does not say that your support payments continue after the payor’s death, or if you do not know what type of order you have, this situation is more complicated. A family lawyer can help.

Once the Family Responsibility Office (FRO) has been notified of the payor’s death, it cannot enforce a support order against the payor’s estate.

After my spouse dies, am I eligible for any government benefits?

Yes. You may be eligible for some government benefits if your spouse dies (see below).

CPP survivor’s pension

Am I eligible?

If your spouse made enough contributions, you may be entitled to a survivor’s pension under the Canada Pension Plan (CPP). This is a monthly payment. You may qualify if, at the time of your spouse’s death:

  • you were legally married to them or you had been living with them for at least one year, and
  • you were at least 35 years old (you can be younger if you have a disability or have dependent children living with you).


When must I apply?

There is no time limit to apply. CPP will give you benefits for the months dating back to your spouse’s death, but they will not go back more than one year before the date you apply.

CPP funeral and death expenses

CPP offers a one-time payment to help pay funeral and other expenses related to a contributor’s death. It goes to the person(s) who pay those expenses. This might be the person who administers the estate, or the surviving spouse, or next of kin.

Compensation benefits

Under Ontario law, you may also be entitled to other payments when your spouse dies, depending on the cause of death. For instance, if your spouse was killed on the job, you can apply for workers’ compensation benefits. If your spouse died as a result of someone else’s criminal act, you can apply for criminal injuries compensation. Each type of compensation has different detailed rules about who can qualify.

When my husband died, I received a death benefit payment from his life insurance company which I used to pay for funeral expenses. Can I now divide the family property using the rules that apply to the sharing of family property on separation?

Yes. You can still use the rules that apply on separation to divide the family property. You must subtract the amount of the insurance payment from the equalization payment you are to receive from your spouse’s estate, unless he specified, in writing, that you can receive both the insurance proceeds and the equalization payment. The estate can reimburse you for the funeral costs.

What are the leading cases on family property?

Canada (except for Quebec) is common law legal system. Thus, judges rely on previous court decisions for guidance on how to decide current cases. Previous cases can therefore provide important precedents. Knowing about these cases will help your lawyer advise you about the likely outcome in your particular case. Some leading cases on family property (mostly extracted from the Ministry of the Attorney General website) are listed below.

  1. Stone v. Stone, 2001 CanLII 24110 (Ont. C.A.) (equalization of net family property, unequal division of net family property)
  2. Rawluk v. Rawluk, 1990 CanLII 152 (S.C.C.) (equalization of net family property, resulting trusts, constructive trusts)
  3. Peter v. Beblow, 1993 CanLII 126 (S.C.C.) (constructive trusts)
  4. Best v. Best, 1999 CanLII 700 (S.C.C.) (valuation of pensions)
  5. Serra v. Serra, 2009 ONCA 105 (Ont. C.A.) (unequal division of net family property)
  6. Levan v. Levan, 2008 ONCA 388 (Ont. C.A.) (setting aside domestic contracts, unequal division of net family property)
  7. von Czieslik v. Ayuso, 2007 ONCA 305 (Ont. C.A.) (unequal division of net family property)
  8. Kerr v. Baranow, 2011 SCC 10 (clarifies the law on constructive and resulting trusts and unjust enrichment on the breakdown of domestic partnerships; joint family ventures)
  9. Schreyer v. Schreyer , 2011 SCC 35 (effects of discharge from bankruptcy on property claims)
  10. Thibodeau v. Thibodeau , 2011 ONCA 110 (impact of bankruptcy on equalization payment)

For more information and advice, please contact HLF : 330 Highway 7 East

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