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What Assets Are Exempt From Family Property Division Laws In Ontario?


There are numerous issues to consider and legal aspects that apply to an Ontario divorce case, but one of the most fundamental questions is how to distribute property between the parties. Under Canada’s Constitution, individual provinces have the authority to enact laws on division and equalization of marital property; Ontario’s version is contained in the Family Law Act. The relevant provisions view marriage as an equal partnership, so the contributions of each spouse are considered the same. In divorce, the statute mandates that all property acquired during the marriage must be divided equally. Assets each spouse owned before getting married belongs to that individual, though any increase in the value of these items must be equally split.

However, there are several exceptions to these basic rules on property division. The treatment of certain assets might surprise you, which is why it is wise to retain an Ontario property division lawyer to protect your rights in Canada divorce. Some information on excluded assets is also useful. 

Exceptions to Family Property Division Laws 

The dividing line for most marital assets is the date of the wedding, but there are some items that are considered exempt. They are not subject to property division – or, in the terms used by the Family Law Act – their value is not considered when calculating that party’s net family property. Excluded property includes:

  1. Items that a spouse received by gift or inheritance from a third party, other than your marital home;
  2. Income from a property that was received as a gift or bequest in a will, if the person giving it expressly stated that these amounts should be excluded;
  3. Compensation received as damage in a personal injury lawsuit;
  4. Proceeds of a life insurance policy that are payable to one spouse upon the death of the policyholder;
  5. Any assets connected to properties mentioned in #1 through #4 above;
  6. Items referred to in a prenuptial agreement or other domestic contract; and,
  7. Earnings under the Canada Pension Plan. 

Options for Resolving Disputes 

From this description of exempt property, you can see how the lines can be blurred when classifying assets. This is especially true with marriages of long duration or items that are difficult to track. Fortunately, you are not held hostage by the property division provisions of the Family Law Act. It is possible to resolve disputes without going to court and dealing with a contested hearing. For instance:

  • Spouses can enter into an agreement on property division, which identifies assets that constitute family property AND splits them between the parties.
  • Mediation is another option when parties are close to agreement, but cannot work out the final details.

Our Mississauga, ON Property Division Lawyers Will Advise You on Options

For more information on family property exemptions and ways to resolve disputes, please contact Zagazeta Garcia Lawyers LLP. You can call 905-232-0398 or visit our website to set up a no-cost consultation with a member of our team. Our firm serves Mississauga, Brampton and the Peel Region, so we are happy to advise you on details.



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