the Family Law Act excludes inheritances to a spouse made during the course of a marriage. Inherited property is excluded outright, whereas income from such property is excluded only if the person who gave it (i.e. the donor or testator) said that they didn’t want the income to be included in the recipient’s net family property.
equalization of net family property
This is the second of a series of blog posts about prenup or prenup agreements in Ontario. In my first blog, I talked about how property is usually divided when married couples separate under the EQUALIZATION OF NET FAMILY PROPERTY REGIME under the Family Law Act. Here, I’m going to talk about how pre-nups, marriage contracts, and separation agreements can change the way that property is divided when married couples separate.
So the basic idea is that, under section 5(1) of the Ontario Family Law Act, when a married couple gets a divorce (or through a court order declaring the marriage a nullity) or is separated and there is no reasonable prospect that they will resume cohabitation, then their NET FAMILY PROPERTY is divided in half. OK so what is NET FAMILY PROPERTY and how do you calculate it? That’s where this blog comes into play.
When a marriage breaks down, the Ontario Family Law Act kicks in with an EQUALIZATION OF NET FAMILY PROPERTY REGIME.