Find a lawyer to help you answer your legal questions.

  • My Legal Briefcase

    How is the equalization payment calculated?
    Notice: Undefined property: stdClass::$post_date in /var/www/webapp/ui/mlb_faq.php on line 96

    An economic snapshot is taken of the value of the assets owned by each party on the date of the marriage and on the date of their separation. Everything is counted and valued as at each of those two dates.

    Once you have the values of the things you brought into the marriage (less any debts) you subtract that from the value of the things you owned at separation date, unless you got them during marriage as a gift or inheritance (after subtracting your valuation date debts) and end up with your Net Family Property (NFP). Do the same with your spouse's assets and debts to figure out his or her NFP. Then you deduct the lower NFP from the higher one and divide the difference in half. That figure is the amount of the equalization payment because, once it is paid by the richer to the poorer party, they will each end up having assets of the same value.

    This is complicated by the fact that there are certain things that aren't included in the calculations. The value at separation date of any inheritance or gift received by a party after marriage is excluded from his or her NFP. If you inherited $10,000 from your great aunt a few years before separating and spent it on a vacation or paid off the mortgage, none of it is left at separation and there is nothing to value or exclude. But if you put that money into a separate bank account, bought a painting or invested in stocks with it you could then value the bank account, painting or stocks as at the date of separation and would be able to exclude that amount. Sometimes the amount of the exclusion is greater than the value of the gift or inheritance when you got it because it has gone up in value in the meantime. There are other exclusions to keep in mind and special rules setting out when you can or cannot deduct the value of the matrimonial home in your name. Because of the importance these deductions and exclusions will have on figuring out any equalization payment, make sure you contact a knowledgeable family law lawyer to be clear about your rights and entitlements.

    Disclaimer: Content on this website is provided for informational purposes only and does not constitute a legal advice.

Document Banner