Who gets what when you separate in Ontario? Ken and Sarah explain net family property, the equalization payment, how to protect an inheritance, pensions and CPP credits, and the special rules for the matrimonial home.
About this episode
One of the first questions people ask when they separate is, who gets what?
In Ontario, the answer starts with the Family Law Act and the idea of marriage as an equal partnership. Ken and Sarah explain how it works: you don’t split each item, you compare values. Each spouse works out a net family property, and the spouse with the higher figure pays the other half of the difference. That’s the equalization payment.
They cover how debts are handled, how pensions and Canada Pension Plan credits are shared, and which property can be kept out of the split, including gifts and inheritances, and how easily that protection is lost if an inheritance is mixed with other money or put into the home.
The matrimonial home gets special treatment: both spouses have an equal right to it, it can include a family cottage, and a home owned before marriage gets no date of marriage deduction if it’s still the matrimonial home at separation. They also explain when an unequal split is possible, and why a story about two kids and one apple shows what mediation can do that a court can’t.
In this episode
Marriage as an equal partnership under Ontario’s Family Law Act
Net family property (NFP) and Form 13.1
The equalization payment: half the difference
How debts are divided
Pensions and Canada Pension Plan credits
Excluded property: gifts, inheritances, and more
How to keep an inheritance protected, and how it’s lost
The matrimonial home: equal rights, cottages, and the date of marriage rule
When an unequal division is possible
The apple story: why mediation can find better answers
Chapters
0:00 Introduction
1:11 Who gets what?
2:18 Ontario’s equal partnership rule
3:02 Net family property and the equalization payment
4:13 How debts are divided
4:33 Pensions and CPP credits
5:09 What isn’t divided: excluded property
5:33 Keeping an inheritance protected
6:16 The matrimonial home
6:53 Cottages, and how a judge decides
7:39 When an unequal split is possible
8:49 The apple story: why mediation helps
9:45 Recap: five things to remember
11:06 Wrap-up
One idea to take with you
“You don’t split the things themselves. You compare values.”
Sarah, Season 3, Episode 3
Key takeaways
Ontario treats marriage as an equal partnership, so you share what you each gained during the marriage.
You don’t split each item. You compare net family property, and the higher spouse pays half the difference.
Gifts and inheritances can be excluded, but only if you keep them separate and out of the matrimonial home.
Pensions and CPP credits earned during the marriage are shared.
The matrimonial home has special rules, and they only apply to legally married couples.
Resources and further reading
The original article: https://divorcethesmartway.ca/property-division/division-of-assets-in-divorce-ontario/
More about Ken’s work and separation resources: Divorce the Smartway
About your host
Ken Maynard works in family mediation and divorce financial planning. His educational work focuses on the questions, choices, and conversations that arise during separation.
Episode transcript
[0:03]Host Emily Bell: If you’re navigating divorce or separation right now, you’re probably feeling overwhelmed, uncertain, and maybe even a little lost. You’re in the right place. This is the Soft Landing Divorce Podcast, where we prove that even in the midst of ending a marriage, you can move forward with dignity, clarity, and yes, peace. Today’s episode, Who Gets What? How Property Is Divided in an Ontario Divorce, will open your eyes to things unseen by most. Ken and Sarah are going to share solutions and strategies that the divorce industrial complex never talks about, the approaches that can save you time, money, and emotional turmoil, but that traditional divorce professionals won’t tell you exist. Whether you’re just starting to consider separation or you’re deep in the process, our goal is simple: to help you and your children land as softly as possible on the other side. So grab your coffee, get comfortable, and let’s dive in with Ken and Sarah.
[1:11]Ken: Hey everyone, welcome back... I’ve got something really practical for you today on the Soft Landing Divorce Podcast. We’re doing a deep dive into the question everyone asks when they separate... who gets what? It’s something I wrote about on the Divorce the Smartway blog, and, Sarah’s here to help me unpack it.
[1:36]Sarah: Hi Ken! Oh, this is the big one, it really, really is. And in Ontario, the answer can sound confusing at first. But once you see how it works, it, it actually makes a lot of sense.
[1:46]Ken: Right. And for anyone new to the show, Sarah Bates is a Certified Divorce Specialist, with over a decade in family law and a background as a freelance law clerk. She’s the guide behind Naked Divorce Filer by DTSW, and she believes divorce is a reset, not a battle. Sarah, welcome back.
[2:10]Sarah: Thanks, Ken. And understanding this topic is such a big part of that reset, because it takes a lot of the fear out of it.
[2:16]Ken: So, let’s start simple. How are things split in Ontario?
[2:21]Sarah: It falls under Ontario’s Family Law Act, and it’s built on the principle of all things equal. Under Ontario law, a marriage is treated as an equal partnership. Both spouses are seen as contributing equally, even if one earned the income and the other ran the household. So the idea is that you both leave the marriage on relatively equal footing.
[2:42]Ken: Okay, but how does that actually work? Do you, split every item down the middle?
[2:50]Sarah: No, and this is where people get surprised. You don’t split the things themselves. You compare values, using something called a net family property calculation. NFP for short.
[3:01]Ken: Net family property. Walk me through it.
[3:03]Sarah: Okay. Each of you fills out a form, Form 13.1. First... you add up all your assets and subtract your debts, as of the day you separated. Second... you work out the net value of what you each brought into the marriage, as of the date of marriage, and you subtract that. That wealth you brought in usually isn’t divided. And third, you subtract certain excluded property, which we’ll get to. What’s left is your net family property.
[3:32]Ken: And then you compare the two numbers.
[3:34]Sarah: Exactly, exactly. The spouse with the higher NFP pays the other half of the difference. That’s called the equalization payment. So if one partner has an NFP of $100,000 and the other has $30,000, the difference is $70,000, and the higher one pays $35,000.
[3:54]Ken: Oh, so it’s not... it’s not a cheque for half of everything. It’s half the difference.
[4:00]Sarah: Right. Another example: if one spouse is worth $200,000 and the other is worth $100,000, the first pays $50,000. And that brings both of them level, at $150,000 each.
[4:11]Ken: Okay, that’s clearer. Now, what about debts? That’s, a big worry for a lot of people.
[4:18]Sarah: I think this is one of the fairest parts of the law. In Ontario, the debts in your name are assigned to you. If you share a debt, with both names on the account, then you split it. And that helps protect spouses who might be victims of financial abuse.
[4:33]Ken: So let’s get to pensions. People always ask me, will my spouse get half my pension?
[4:38]Sarah: Pensions earned during the marriage are property, so they’re part of your NFP calculation. If you started earning a pension before you got married, the value is calculated between the date of marriage and the date of separation, and a pension administrator can do that for you. The same idea applies to your Canada Pension Plan credits. What you earned while married can be split, and that applies to common-law couples too, as long as you lived together for a full year. You can get a CPP split application from Service Canada Centres.
[5:09]Ken: What about things that aren’t divided? I keep hearing about, inheritances.
[5:15]Sarah: Gifts and inheritances from a third party can be kept out of the division. They’re what’s called excluded property. The list also includes damages for personal injuries, the proceeds of a life insurance policy, and property you’ve both agreed to exclude in a marriage contract.
[5:33]Ken: So if I inherit money, it’s just... mine?
[5:36]Sarah: Not automatically. You have to take specific steps. First, you have to show the funds still exist. Second, you need to show you didn’t mix them with your other money. Ideally, an inheritance goes into a separate account. If it goes into a joint account or your everyday chequing account, it becomes really hard to prove, and you usually lose the exclusion.
[5:57]Ken: And what if someone puts it toward the house?
[5:59]Sarah: Then the exclusion is gone. If you use it for a down payment, a mortgage payment, or even renovations on the matrimonial home, you can’t exclude it anymore. The matrimonial home is never excluded property, no matter how it was acquired.
[6:13]Ken: That’s... that’s a really important detail. So tell me more about the house, because I know it’s treated differently.
[6:21]Sarah: It is. The matrimonial home has a special status under the Family Law Act. Both spouses have an equal right to it, even if only one name is on the deed. And it’s still the matrimonial home even if one of you bought it before you met, as long as you lived in it together as a family. And here’s something people often miss. If you owned the home before the marriage and it’s still the matrimonial home when you separate, you don’t get to deduct its date of marriage value. Its full value goes into your net family property.
[6:53]Ken: Does that only mean the main house?
[6:56]Sarah: Not always! It can also apply to places where you spend time as a family. Your lake cottage, for example, can be considered a matrimonial home too. And you both have access to it until you agree on who keeps it, or a judge decides.
[7:10]Ken: And if a judge does decide?
[7:12]Sarah: They look at any written agreements about the property, what’s best for any children, how much each spouse earns and will take away from the marriage, and whether each of you has somewhere else to live. One important note, though. The matrimonial home rules only apply to legally married couples. Common-law partners don’t have that automatic entitlement, although a victim of domestic violence may be able to stay in the home even if they’re not on the deed.
[7:39]Ken: So is it always 50/50 in the end? Or are there, exceptions?
[7:46]Sarah: Equal is the strong default. To get an unequal division, you have to show that an equal split would be more than just unfair on its face. Your article puts it as evidence that shocks the conscience of the court. Saying one spouse earned more isn’t enough.
[8:01]Ken: So what kind of situations would qualify?
[8:04]Sarah: Things like one spouse hiding a large debt they brought into the marriage. Or secret gambling, or credit card spending without the other’s knowledge. One spouse deliberately running down their property to avoid a big equalization payment. A very short marriage, under five years, where equalizing would give someone a disproportionately large payment. And financial abuse, like one partner not allowing the other to work, or taking their earnings.
[8:31]Ken: And a marriage contract can change all this too, right?
[8:34]Sarah: It can. If a marriage contract, or prenup, sets out how property is divided, the court will respect it.
[8:41]Ken: Okay, so we’ve established how the rules work. But Sarah, in my experience, people still walk out of this feeling, cheated sometimes.
[8:55]Sarah: They do, and that’s the thing. Sometimes the conflict isn’t really about the money. It’s about things that run deeper, and court processes just aren’t built to deal with that. Which is where I love the apple story from your article.
[9:07]Ken: Oh, tell it. I love that one.
[9:09]Sarah: So a mother sees her two kids fighting over one apple. Some parents would send them both to their rooms. Others would cut it in half. But this mom asks each child why they want it. One wants to make applesauce. The other wants the peels for baking muffins. So one gets the inside, the other gets the peels, and both walk away satisfied.
[9:32]Ken: And a court would have just... cut the apple in half.
[9:35]Sarah: Or sold it and split the money! That’s the difference with mediation. When people talk about what they want, and why, you can often find a solution where everyone comes out ahead.
[9:45]Ken: So as we wrap things up... let’s recap. What should someone remember about dividing property in Ontario?
[9:53]Sarah: Okay. One... it’s built on equal partnership, and you share what you each gained during the marriage. Two... the tool is your net family property, and the equalization payment is half the difference. Three... gifts and inheritances can be excluded, but keep them separate, and never put them into the matrimonial home if you want to protect them. Four... pensions and CPP credits earned during the marriage are shared. And five, the matrimonial home has special rules, and they only apply to married couples.
[10:27]Ken: And on that note... if you’d like help working through your own numbers, you can book a Get Acquainted Call with Divorce the Smartway.
[10:35]Sarah: And remember... fairness is possible. It just starts with understanding the rules, and talking about what you really need.
[10:43]Ken: I love that. So to everyone listening, here’s something to think about. What would your net family property look like today, and what do you need to keep separate? Stay curious, keep those questions coming, and until next time... keep building toward your fresh start.
[11:06]Host Emily Bell: And that’s a wrap on today’s episode. If there’s one thing to take with you, it’s this: in Ontario, you share what you each gained during the marriage, through your net family property. Divorce doesn’t have to be as complicated, costly, or drawn-out as the industry often makes it seem. You have more choices than you’ve been told, and more strength than you may realize. If today’s conversation resonated with you, subscribe to the Soft Landing Divorce Podcast so you never miss a new episode, and leave us a review, because it helps other people who need this information find us. And if you know someone who’s struggling through separation or divorce, please share this episode with them. Sometimes the kindest thing we can do is let someone know they’re not alone. All our resources, show notes, and connection links are in the podcast description. Until then, keep moving toward your soft landing. You’ve got this, and we’ve got you. That’s Ken and Sarah, and they’ll see you next time. Disclaimer: The information provided in this podcast is intended for general informational purposes only and does not constitute legal advice. For legal guidance specific to your situation, please consult a qualified legal professional in your jurisdiction.
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