Know your Separation Date before you start Divorce

Separation date determines net family property calculation

When a marriage ends, the date that the parties separated must be established for the purpose of determining the division of property and assets accumulated during the marriage.  Under the Family Law Act, the date of separation is referred to as the “valuation date”, with the most commonly used date being the date that “the spouses separate and there is no reasonable prospect that they will resume cohabitation.”

What if you disagree on the date of Separation (Valuation Date)?

If spouses are in disagreement as to the date of separation, the court necessarily has to make a determination by analyzing the specific facts of the situation and cannot arbitrarily choose a date of separation.

Calculating the Net Family Property and Equalization Payment

Once the date of separation is determined, the net family property of each spouse is calculated.  “Net family property” is the value of all the property that a spouse owns on the date of separation (“valuation date”), which is subject to certain exemptions and deductions for debts, liabilities, and pre-marital property.

Upon the breakdown of the marriage, each spouse is entitled to half of all property acquired during the marriage regardless of ownership.  Entitlement is based on the legal assumption that each spouse equally contributes to a marriage, whether in the form of caring for the children, managing the household, or by earning an income to cover the family’s expenses.

Pursuant to the Family Law Act, a court will deviate from the equalization of net family property when it is under the opinion that an equal division would be “unconscionable” based on a number of factors including: the duration of the marriage, whether any of the property was a gift or inheritance received by one spouse, or whether a spouse intentionally or recklessly depleted his or her net family property.

When the difference between the net family properties of each spouse is calculated, the spouse with the higher net family property pays to the spouse with the lower net family property one half of the difference. This payment is referred to as the “equalization payment”.

Determination of the date of separation upon the breakdown of a marriage is critical to the net family property calculation.  Contact a Family Lawyer who can assist you in understanding all of your rights and obligations before filing for divorce.

Call Niren and Associates at 416 222 4555 or email us at info@divorcesupport.ca.

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By candice - Last updated: Tuesday, November 24, 2009
Filed in Divorce, Divorce Lawyer, Family Property Division, Separation Agreements • Tags: ,