When you are dividing (in Ontario we say “equalizing”) your “net family property” as part of your divorce, fixing a dollar number to some assets and liabilities may prove to be especially challenging. In some cases, these complexities could derail an otherwise peaceful process or create obstacles that require more time and effort to overcome.
Knowing what these challenges are and why they can present obstacles if not faced head on can help you plan ahead if you divorce or separate in Ontario.
Laws (both statute law and caselaw) set standards to guide people through their property issues. These guidelines direct us in matters such as excluded property (ie. what does not count as part of your “net family property”) and unequal division, and they can be far more complicated than people might realize at first.
Further, these laws change over time. For instance, revised laws have changed how parties divide pensions and retirement funds. New cases that are published also influence just how we approach these issues. It’s best to have a family law lawyer on your side to guide you through the process.
One can value different assets quite differently. Qualified experts may disagree, especially where the nature of the asset or business is unique. Valuation of property such as real estate or a piece of jewelry is generally more straightforward (but even for these, there is room for disagreement). However, property like monetized social media accounts or action figure collections or stock options can be viewed quite differently by various professional valuators and these assets can certainly fluctuate in their value and change based on a number of factors.
Working with a forensic accountant and specialized appraisers/valuators can be quite necessary to pinpoint a fair, accurate valuation.
Misrepresentations and oversights
You cannot divide property you do not know about. (Or, please let us use the proper Ontario terminology and say: you cannot accurately equalize net family property without all the assets and liabilities identified and valued both at date of marriage and date of separation.) If either party fails to disclose an asset or liability as of either or both those dates, then this misrepresentation or oversight can create problems (to put it mildly).
Depending on whether your misstep was intentional or not, there could be significant consequences for concealing assets and liabilities or “misvaluing” them (I think that I just made up that word, but you know what I mean.) And even if you failed to disclose or value quite innocently, the court might not believe you. So disclosure is a must – complete, accurate and timely – those are the bi-words. Failure to disclose can also create trust issues that make mediation efforts unsuccessful.
Getting a fair settlement despite these challenges
I have described issues here that can create complications when equalizing net family property in an Ontario divorce or separation. However, knowing the issues and anticipating challenges can help you be fully prepared and have more control over the outcome.
No matter how complex your assets and liabilities may be, you deserve a fair settlement. With preparation and the help of a lawyer, financial professionals and others, you can pursue this outcome as amicably and swiftly as possible.