Parties in a divorce often go to great lengths to ensure they are treated fairly when dividing assets. The New York Post recently reported that Gabriel Villa took it one step further than most by immediately divorcing his wife abroad following their wedding in the early 90’s allegedly to protect his assets, while continuing to live with her and raise a son. His “wife” discovered this recently when the couple received a tax bill in the mail that was only in Gabriel’s name.
While most couples do not go to such extremes, many would benefit from understanding how an equalization of assets works in divorce. As this process can be complicated, it is important to consult with one of the trusted family law firms in Barrie, such as Epstein & Associates.
The Basics of Dividing Assets
The government and courts generally recognize that both couples contribute equally to a marriage. As recognition of the parties’ contribution to the life built together during the marriage, assets are generally divided equally upon separation, even if one partner earned a higher income than the other during the marriage.
The first step is to obtain a valuation of the property on the date of separation, such as the home’s value from a property appraiser, the value of registered plans from your securities dealer or bank, and the value of vehicles from the Blue Books or by visiting a reputable car dealer.
The assets included in the division are those which are acquired in the course of the marriage. The assets acquired prior to marriage are deducted, though any growth in the value of those assets during the marriage is also part of the couple’s property.
Certain assets acquired during the marriage may be excluded from the division of assets provided these are kept separate and not used towards the matrimonial home. These assets include insurance proceeds from an accident, gifts from friends or family, and inheritances. Otherwise, if these funds are comingled, they form part of the division of property.
Typically, the largest assets to divide are the matrimonial home, registered plans, pensions, any non-registered investments and any motor vehicles. The matrimonial home is treated differently than other types of property in a few ways, including that you do not receive any credit for the home when you separate if you owned it prior to the marriage. To learn more about how the matrimonial home is treated during divorce proceedsings, read last month’s blog where we discussed a case review of divorce and the matrimonial home.
Dividing the Matrimonial Home
Because of the special role a home has in our lives, the rules for the division of assets are different for the family home than they are for other assets. The default rule for married couples is that both parties have a right to reside in the family home. In rare circumstances, if one party is violent or dangerous in some way and the other spouse makes a court application and is successful, he or she could obtain exclusive possession of the home.
Usually the parties come to a mutual agreement about who can stay in the family home. Sometimes, this agreement is developed with the assistance of an arbitrator or mediator. If the parties cannot decide, they must seek an order from the court.
Often in a separation, the matrimonial home is sold with the parties dividing the proceeds, as parties cannot maintain two similar households on the same income they earned prior to separation.
Contact Epstein & Associates, Divorce Lawyers in Barrie and Aurora
Next week we will continue our discussion and look into the division on investments, pensions, & RRSPs. The division of assets during divorce proceedings can be a stressful and complicated affair. We believe that our trusted family lawyers can help you navigate these strenuous times by offering expert and compassionate advice. Our family lawyers in Barrie, Newmarket, Bradford, Richmond Hill and Toronto can work with you and your spouse’s lawyer to try to resolve matters amicably. Contact Epstein & Associates today for family law services in Barrie or call Epstein & Associates at 1-866-463-2266.