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Net family property and the equalization payment

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  • #31
    Equalization | CLEO (Community Legal Education Ontario / Éducation juridique communautaire Ontario)

    Special rule for matrimonial homes:
    When calculating a spouse's NetFamilyProperty, 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 big effect on how much the equalization payment will be, or who must pay it.


    Regarding the above, does this mean that when calculating equalization, the matrimonial home is not factored into the assets/liabilities for either spouse on the date of marriage? The total value of the home is imputed for whomever owns the home on the date of separation (if a valuation was done soon after separation)?

    Here's my struggle: common law couple X and Y live in a home for 10 years. 1990-2000. Home is in X's name, both X and Y make monthly payments towards mortgage. In 2000 they get married and X puts 60k to pay down mortgage; the value of home is 300k and mortgage left is 100k. Seems to me that equity should be $200k on X's side on date of marriage.

    Fast forward 5 years, the title of the home is transfered from X to Y. Fast forward another 5 years, X and Y divorce/separate, the value of the home is $600k.

    So according to the above link, none of the figures I mentioned on the date of marriage are relevant to the assets/liabilities calculation on the date of marriage, and in this case Y will get imputed $600k into their assets side of the equalization calculation.

    Is this accurate?


    • #32
      Interesting spreadsheet. Thanks. Has this calculation passed review by a lawyer? That is, can people place faith that it will pass muster in their legal negotiations?


      • #33
        Could you explain lines 85, 86, and 87?

        So my question is, why does the spouse owe you for the mortgage principal payments, property tax payments and house insurance payments since separation? I thought that it was up until the separation date. Please explain.


        • #34
          about separation agreement

          Here is the case:
          1. We have a matrimonial home with heloc and mortgage on it.
          2. I have another condo and semi-detached house.
          3. Ex has other investment

          The only asset we should split is matrimonial home. Since I have sole custody of child, I will take over matrimonial home to help my child stay the same house. To be able to buy him out, I need to sell my condo and let him take over the semi-detached house at the estimated market value in Nov. 2019. The agreed settlement date is August 2020.

          Due to COVID situation and I am not able to sell condo before August 2020, we agreed to postpone the settlement date to Jun 2021. Here are two questions:
          1. Can I request the settlement date to be postponed again with the COVID getting worse?
          2. Should those property numbers to be recalculated based on current market value and remaining mortgages?
          3. Do I need legal document from lawyer?


          • #35
            3. Do I need legal document from lawyer?
            You need advise and documents from a lawyer. Your situation has layers of complexity.


            • #36
              Help! I can't open the ZIP file, I tried Winzip and it gives error!


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