You and your partner married happily and started a new chapter in life together. Unfortunately, things didn’t turn out the way they should and the marriage is now falling apart. Maybe circumstances changed, or conflicts started appearing, or the love simply died out.
Whatever the case, you have decided that the marriage should end. You have always thought about marriage as a natural event that occurs when two people fall in love and decide they want to spend their lives together, possibly with children down the road. But the truth is that most people don’t understand the significance of marriage beyond its cultural and romantic connotations. Marriage, for the most part, is significant and important because of its legal implications. These legal implications dictate the consequences of your finances, assets, and rights to children. This article tries to help people understand what the legal implications of a divorce are in Ontario.
Firstly, who can get a divorce in Ontario?
You do not have to be a Canadian citizen to apply for a divorce, but there are certain criteria you must meet.
If you want an Ontario court to officially end your marriage, you can apply for a divorce if you meet these 3 eligibility criteria:
- You were legally married in Canada or in any other country.
- You intend to separate permanently from your spouse or have left your spouse already, and you do not believe there is a possibility you will get back together.
- You and/or your spouse have lived in Ontario for at least the 12 months preceding your application.
The Divorce Act is the federal law that deals with divorce matters in Canada. If you are not legally married, divorce law does not apply to you.
There may be an exception to the residency requirement if both you and your spouse live outside Canada and you live in a country that does not recognize your Canadian marriage. You may be able to end your marriage under the Civil Marriage Act and can apply for divorce in Ontario with existing forms from the Ministry of the Attorney General.
Secondly, how is property divided in a divorce in Ontario?
A lot of people think that the way we divide property in a divorce in Ontario is by splitting everything up evenly. That is erroneous and untrue. In Ontario, there is something called “equalization.” Equalization is a legal term for a monetary payment that one spouse pays to the other to make life “equal”. A way to think about it is that we take a picture of two different times in the parties’ lives: the date of marriage and the date of separation. The law says that we have to take a picture, so to speak, of what each person’s net worth was (assets minus liabilities). We do this both at the date of marriage and the date of separation, which is also called “the valuation date.”
This is done for both parties. The law looks at the increase in net worth of each party from marriage to separation. If both parties wind up increasing their net worth by the same amount of money from marriage to separation, then neither of them owe anything to the other. Anything either of them has individually stays with that person; if there are any individual debts, they stay with that person.
There are exclusions, things that are included at the date of separation, but which then get factored out. At the end of the day, they make no difference to the bottom line – they make no difference to an equalization payment. The law has listed a few of these and determined that they should not be shared with the other spouse through equalization. Exclusions are things like life insurance proceeds, gifts a party received from a third party during the marriage, or an inheritance (or part of) that you can trace. If you have, for example, inherited $5,000 during the marriage and you used it to buy stock that’s worth $10,000 at the date of separation, then the value of the stock gets excluded for purposes of equalization.
As an example: Jeff has a net worth of $1,000,000 at marriage. The spouse, Jennifer, has a net worth of $100,000 at marriage. They are now divorcing after 5 years together. Jeff now has a net worth of $1,500,000, while Jennifer has a net worth of $200,000. Jeff has grown in value by $500,000 while Jennifer has grown by only $100,000. The difference is $400,000. To make things “equal”, Jeff needs to make an equalization payment to Jennifer of $200,000. Now, both of them would have increased their net worths by they same amount of $300,000. Of course, these calculations are broad and general. For your specific circumstances, you should consult a lawyer.
My partner and I agree to the terms of divorce. What’s next?
If you and your partner have nothing to settle or have settled all the terms of a divorce (preferably with the help of a lawyer to cover your liabilities), you may apply for a divorce. You can do so with a lawyer or by yourself using Ontario’s helpful online tool. Note that you will need a ONe-key ID. If you don’t have one, you can apply for it on the same online tool website. The application fee is $447, whether you file online or in-person at a courthouse.
You can also learn more about family law, separations, and divorces on the Steps to Justice website.
The law is complicated, it is always advisable for you to consult a lawyer to get independent legal advice.
This article is for general information only and is not legal advice.