Henderson Heinrichs LLP

Property and Pensions in Ontario

Kevin Heinrichs

Written by: Kevin Heinrichs (View All Posts • View Bio ) Published: November 10, 2014
Categorized: Pensions, Property Division.

Generally speaking, married couples in Ontario who separate must divide their property.

People who live in a “marriage like relationship” for more than three years, but who are not married, may think that just because they are “living common law”, they are also entitled to share in each other’s property if they separate. Generally, though, they do not have the same obligations and rights to property as married people do. (In some cases, they may make a “trust” claim against their partner’s property, but this is not an automatic right.)

The law in some other provinces, like BC, provides “common law” spouses with the right and obligation to share their property with their spouses when they separate. But it doesn’t work like that in Ontario because the right to share in your spouse’s property is controlled by Part 1 of  the Family Law Act in Ontario. (BC has a similar piece of legislation, also called the Family Law Act, but don’t let the similar names fool you—each province writes its own laws, and they can vary significantly from province to province.) Part 1 of the Family Law Act in Ontario uses a definition of “spouses” that includes only married people. Unmarried people are out of luck (or maybe lucky, if they have property they do not want to share).

What is “property”?

Broadly speaking, property is anything that someone owns. Things like houses, cars and even pets and coin collections are property. But intangible things, such as bank accounts, RRSPs, and even pensions are also “property”. Some of those things are easier to put a value on than others, but ultimately, if you own it and it has a value, it is property.

Some kinds of property are excluded and do not need to be divided. These include gifts and inheritances, personal injury awards, and a few other things. You should talk to a family law lawyer to find out if your property is excluded or not.

Also, married spouses get a “deduction” for the value of property they owned before they got married. This means that, generally speaking, people do not “lose half their property” as soon as they get married. Generally, if your property doesn’t increase in value (or decreases in value) during the marriage, you don’t have to share any portion of it with your spouse if you separate.

Matrimonial Homes

A house that married people live in together is a special kind of property in Ontario, though. Its value must be divided, like other property, but a spouse who owned a “matrimonial home” does not get a deduction for the value of the home that he or she owned before marriage.

This means that, unlike the general rule that you keep what you had before marriage, you do indeed lose half the value of the “matrimonial home” on the day you get married (assuming you owned it before marriage).

Pensions

As mentioned above, pensions are a kind of “property” because they have a value and a person owns them. Unlike the rest of couples’ property, pensions have an entire separate piece legislation that discusses how they are dealt with when people separate, called the Pension Benefits Act.

Pensions are notoriously hard to put a value on. There are different kinds of pensions (“defined benefit” and “defined contribution”) and for some pensions, there are many unknowable factors that must be considered (usually by professional actuaries) when calculating their values, such as life expectancy, sex, age, as well as length of time the pension plan member contributed to the pension.

The Pension Benefits Act has a very helpful section that requires pension plan administrators to calculate a “family law value” for any pension owned by a pension plan member in Ontario. Being “in Ontario” for the purposes of the Pension Benefits Act is a simple matter of having a job where you regularly report for work at a location in Ontario, or having an employer whose establishment is located in Ontario.

If the Pension Benefits Act covers you, you can get a family law value for your pension by filling out some forms ( ie. http://www.fsco.gov.on.ca/en/pensions/Forms/Pages/default.aspx#Family) and submitting them with supporting documents to the pension plan administrator. The forms can be complicated, though, and it is always a good idea to speak to a Toronto Family Lawyer before submitting them. You will also need documents related to your spouse before you can submit the forms, and in many cases you will want your spouse to sign a joint declaration to be submitted with the application. Again, it’s good to talk to a Toronto Family Lawyer before completing the forms.

The pension plan administrator may charge a fee, although some do not. In any case, the fee cannot currently (http://canlii.ca/t/51v7s) be more than:

  • $200, if the pension plan provides defined contribution benefits;
  • $600, if the pension plan provides a defined benefit; or
  • $800, if the pension plan provides a separate defined benefit and a defined contribution benefit.

An interesting note is that, if one spouse lives in a different province, like BC which does not have something like the Pension Benefits Act, but the spouse with the pension lives and works in Ontario, you can still use the Pension Benefits Act forms to get a family law value for the pension. This can help couples who are separated and living in different provinces.

Note also, that even if you do not have a right to your partner’s property because you are in Ontario but are not married, you may have a right to spousal support or child support (if you have children). It is important to talk to a Toronto Family Lawyer so he or she can give you advice about your specific situation.

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