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Equalization
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Equalization of Family Assets

The concept of equalization stands as one of the most intricate facets of asset division during divorce or separation. Our team of highly skilled lawyers is wholeheartedly committed to guiding you through the complexities of family law in this sensitive realm.

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What are Equalization Payments?

In the context of divorce or separation, equalization is a legal mechanism designed to divide the family property between both spouses fairly. When one spouse’s net family property is greater than the other’s, the spouse with the greater net family property typically makes a one-time payment to the other to equalize the division of assets.

Why are Equalization Payments Important?

Equalization payments rectify financial imbalances that may arise during a marriage. The objective is to ensure both parties walk away from the marriage with a fair share of the family property. This is particularly crucial in scenarios where one spouse may have sacrificed career prospects for family responsibilities. In worse cases, legal action may be necessary if one spouse refuses to make the equalization payment. Enforcement mechanisms can include the seizure of assets or property.

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How are Equalization Payments Calculated?

The calculation for equalization involves several steps:

With the help of our skilled real estate legal team Toronto, we determine the value of each spouse’s property. This includes all assets and liabilities, real estate, bank accounts, investments, and retirement savings;
During the next step, we calculate each spouse’s net family property (NFP). NFP is the value of all assets minus the value of all liabilities, excluding any property brought into the marriage;
Finally, De Krupe Law family lawyers compute the equalization payment. The spouse with the higher NFP pays half the difference between the two NFPs to the spouse with the lower NFP.

Furthermore, it’s important to note that equalization payments are typically not subject to taxation for either party. Nevertheless, we recognize that every case is distinct, so we encourage you to reach out to us for more specific and tailored information.

Exceptions and Exclusions

Certain assets like gifts or inheritances acquired during the marriage and kept separate are generally excluded from the computation of the net family property. It’s important to note that specific conditions must be satisfied for these exclusions to be acknowledged by the court. Your family lawyer will assess whether these criteria align with your particular circumstances.

In addition, the Court may deviate from the standard equalization procedure if it considers the outcome excessive or unfair to either party.

Can Equalization Payments Be Made in Installments?

In certain circumstances, a court may permit equalization payments to be made in installments over a period of time.

How We Can Help

Comprehending and calculating equalization payments can be an intricate task, necessitating a comprehensive examination of all assets and liabilities involved. Matters can become even more complex if one spouse has concealed assets that require discovery. With years of experience and specialized expertise, De Krupe Law is fully prepared to lead you through this process, ensuring a just and equitable resolution is reached.

For a personalized consultation, please contact us today at +1 (416) 901-9344.