Equalization of Net family Property

When couples separate in Ontario, they need to the equalize their Net Family Property. This process involves calculating each spouse's Net Family Property by reviewing their assets and liabilities at the time of separation and marriage. The spouse with a higher Net Family Property (the “NFP”) will pay an equalization payment equal to half of the difference.

Financial disclosure is a legal obligation for both spouses in a family law matter. Alongside the NFP equalization, spousal and child support must also be established. The support amount (if any) is based on each spouse's income, which may be determined through tax returns, pay stubs, or with the assistance of a financial expert. Transparent financial disclosure is crucial for determining support obligations and NFP equalizations.  

Financial disclosure is a mandatory requirement for both parties in a family law case and ensures each party has a full understanding of the other's financial situation as of the date of separation for fair negotiations and so that the parties can reach a mutually acceptable agreement. The first step to resolving any family law matter is for each party to complete a Financial Statement, including all necessary financial disclosure and supporting documentation.  

As lawyers, our role is to ensure proper financial disclosure has been exchanged and that the financial statements are completed correctly. This step of the separation agreement process can be frustrating, but it is important to remember that the goal of financial disclosure is to ensure for accurate and fair negotiations.