What Are Various Types of Excluded Property?
Posted on October 25, 2024
In Ontario, under the Family Law Act, spouses are legally required to split all property evenly following the principle of equalization. Calculated on the date of separation, the person who has the larger net worth pays an equalization payment to the other spouse. The equalization payment is designed to balance out any financial discrepancies in a marriage. While this is the case for most property during a divorce in Ontario, there are some types of assets which are not calculated when determining the net worth of each spouse. If you have some property types that are excluded, it’s a good idea to book a legal consultation with a family lawyer who is also an experienced civil litigation lawyer. At Karrass Law, Robert Karrass and his team of experienced legal professionals will help you protect your financial interests during the challenges of divorce.
Here are the various types of property that are excluded in divorce. For more insight into the complex division of assets, contact the Karrass Law team.
Gifts or Inheritances
One of the most common types of excluded property in divorce cases is gifts or inheritances that a spouse receives during the marriage. For example, if you inherit a sum of money or receive a valuable gift from a relative, that property is generally excluded from division. For you to ensure that your other spouse has no claim to a gift or inheritance you received over the course of your marriage, it’s imperative that you refrain from mixing it with any marital assets. When used to buy shared family property, the gift may no longer be protected as an excluded asset. To ensure that these assets remain excluded during a more complex division of assets, consult with a trusted family lawyer at Karrass Law.
Property Owned Before Marriage
If it is not your family or marital home, property owned before marriage can be considered an excluded asset. However, depending on the situation, any appreciation in the value of that home or other investments may be subjected to division.
If you do have properties outside of your marriage, at the time of asset division, an experienced family and civil litigation lawyer can help assess how much of the property’s increase in value should be divided, ensuring a fair and accurate valuation.
Personal Injury Settlements
Personal injury settlements received by one spouse during the marriage are also considered excluded property. If a spouse receives compensation for injuries, this settlement is typically excluded, as it is meant to cover personal pain and suffering or other individual damages. However, if the settlement includes compensation for lost wages or income, that portion may be divisible between the spouses, as that would have been for the marriage or family unit.
The complexity of personal injury settlements and their division requires the guidance and insight of an experienced legal team. Working with Karrass Law will help ensure that only the appropriate portions of the settlement are excluded from the asset division.
How Excluded Property Complicates Division of Assets
Division of assets is typically a contentious and complicated time of divorce. Depending on when certain assets were acquired or how they were used, it can alter the property’s status and where it fits under the Family Law Act. To ensure you are left with what you are rightfully owed, work with our family lawyers and legal experts at Karrass Law.
What to Do When Your Spouse is Hiding Assets?
On the other hand, sometimes, one party may decide that they do not want to split the entirety of their net worth in half and pay out the equalization payment, so in advance of the division of assets, they may hide assets. If you suspect that your spouse is hiding assets, contact a family lawyer who specializes in civil litigation right away. As experienced civil lawyers, we understand how to navigate this situation to advocate your financial interests. Our team will make strategic legal maneuvers to protect what you’re rightfully owed.
Trust Our Family and Civil Lawyers at Karrass Law
Don’t get lost in the complexities of asset division in Ontario. Our experienced, trained, and well-versed legal team will help guide you through the process and represent your best interests. We can offer litigation as well as mediation services to help you leave your marriage with what you deserve. To learn more, book a legal consultation with our team.
Contact Us Today.