In dividing property on separation, the first assumption is that people should have an equal share of property gained by the efforts of each partner. In most cases, contributions of a homemaker and an income-earner are treated the same. Some property is not equally divided. Exempt property includes property owned before marriage, gifts from someone other than your spouse, inherited property, and property which is the subject of a written agreement. But the amount any exempt property has increased in value since it was acquired may be shared equally between married spouses.
‘Matrimonial Property’ is all property acquired by spouses during the marriage. Generally, matrimonial property is divided equally between spouses when a marriage ends, unless the result would be unfair. Certain kinds of property acquired before the marriage may not be divided when a marriage ends. This is called ‘exempt property’. However, sometimes the increase in value of exempt property may be considered ‘matrimonial property’. Nonetheless, this increase in value may not automatically lead to an equal split. The Court will make a decision based on what is just and equitable.
No claim by the other spouse can be made on the property listed above, unless it has been brought into the marriage. An example of this would be taking a home purchased by one spouse before the marriage and putting it under both spouse’s names.
Pensions are considered property under the Matrimonial Property Act. There are two types of pensions: private pensions (by employment) and the Canada Pension Plan. Certain pensions may have legislation that determines how the pension will be divided when a marriage ends. Contact your pension administrator to find out if this kind of legislation applies to you.
Division of the Canada Pension Plan is automatic unless both spouses agree otherwise. The reason behind this is to provide some financial protection to a spouse who did not work outside of the home and/or could not reasonably have contributed to the plan. Note that taking money out of CPP can have significant tax implications.
For non-married partners the rules are more uncertain. A non-married partner may or may not be entitled to share in the other partner’s property depending on the particular circumstances involved. If you are in this situation, you should have your lawyer carefully review your circumstances.