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FAQs: Asset Division

Here are the most common pitfalls in asset division in a divorce process:

  • Failing to fully disclose all assets and debts — courts can reopen settlements and impose penalties
  • Co-mingling inherited or gifted funds with joint accounts or the matrimonial home, causing them to lose excluded status
  • Underestimating pension value — often the largest asset in the marriage
  • Missing provincial deadlines for making property claims (Ontario, for example, has a six-year limitation period from separation and a two-year period from divorce)
  • Agreeing to a settlement without understanding the tax consequences of what you're receiving
  • Agreeing to a settlement without confirming that you are approved for any necessary financing.

Not exactly. For married couples, Canadian law presumes equalization of the growth in net family property during the marriage. Common-law partners do not automatically share property. In rare cases where equal sharing would be unconscionable, courts can order unequal division.

Title is largely irrelevant. Both spouses have an equal right to possession of the matrimonial home regardless of whose name appears on title. The full value of the home is included in the equalization calculation, and neither spouse can sell, mortgage, or transfer it without the other's consent.

Yes, but only if it has been kept separate and can be traced. Once an inheritance is deposited into a joint account or used toward the family home, it may lose its excluded status. The growth in value of an excluded asset during the marriage is also typically shared, even if the original amount is protected.

Debts as of the valuation date are included in the Family Property calculation, whether they were held individually or jointly. However, your legal liability to a creditor does not change because of a separation agreement. If your name is on a loan, you remain responsible to the lender regardless of what the agreement says about who will pay it.

Yes. Any growth in the value of a pension or business during the marriage is divisible. It is recommended to get a professional valuation by an actuary for defined-benefit pensions, or a certified business valuator for business interests. However, many people proceed without getting professional advisors

It depends heavily on your province. In BC, common-law partners who cohabited for two years or more have similar property rights to married couples. Alberta extends significant protections after three years. In Ontario, Quebec, and most other provinces, common-law partners have very limited automatic rights to property that is in the other person's name, though court claims based on unjust enrichment are sometimes available.

Courts have tools to address this. Judges can impute a value to hidden assets, adjust equalization in favour of the wronged party, award additional costs, and impose penalties. Hiding or dissipating assets is a serious legal risk.

A defined-benefit pension is valued by an actuary and either split at source — meaning each spouse receives their share directly from the pension administrator — or offset against other assets in the settlement. The value of a pension is often far higher than people expect, making it one of the most important assets to appraise properly.

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