The equalization of net family property is triggered “when a divorce is granted or a marriage is declared a nullity, or when spouses are separated and there is no reasonable prospect that they will resume cohabitation” (s. 5 (1) Act). However, if the spouses are cohabiting and have not yet separated, a court can still provide some recourse if there is “serious danger that one spouse may improvidently deplete his or her net family property” (s. 5. (3) Act). Note that the section uses the term “serious danger.” There must be legitimate and genuine concern that the other spouse will spend, take, or destroy the specific assets in question. If you suspect your cohabiting spouse may deplete his or her net family property, contact a Toronto divorce lawyer as soon as possible. With the help of a skilled lawyer, you can protect your own assets as well as those that you would be entitled to upon your future separation or divorce.
It should also be noted that section 5. (6) of the Act states that if one spouse has intentionally or recklessly depleted the net family property, the court may award an amount that is more or less than the expected amount to account for the spiteful or irresponsible behaviour. The court has the discretion to make variations on the equalization calculation based on the individual circumstances at hand. A Toronto divorce lawyer will expertly assess your situation and be able to present you with your best options.
You may have heard the term, “freezing assets.” In the family law context, freezing assets refers to orders of preservation. The Act mandates the court to bestow two types of orders of preservation under section 12. The court may make an interim or final order if it is deemed necessary to protect the spouse’s financial interests. These orders may request:
(a) restraining the depletion of a spouse’s property; and
(b) for the possession, delivering up, safekeeping and preservation of the property.
The objective of orders of preservation or non-depletion orders is to ensure that an equalization payment can be made in a just and fair manner. If for some reason, one is not entitled to an equalization payment, then one cannot seek out a non-depletion order. Your Toronto divorce lawyer can advise as to likely success of such an application based on your particular situation.
Your Toronto divorce lawyer will likely explain that orders of preservations are essentially an encumbrance on the rights of the other spouse. The court will not hinder the rights of another without significant merit and evidence. It is critical that you recall as many details as possible and to share as much evidence as possible with your lawyer.
Relevant information includes:
- Comments made by the other spouse about being unwilling to share assets, for example: “I will never give you a penny!”
- Jokes or sarcastic remarks about hiding or spending the assets, for example: “We’ll see how much you get after I buy my dream car and dream house without you.”
- Details about the assets themselves such as their liquidity.
- The other spouse’s experience with moving around assets and relative knowledge about the family property in general.
- Any behavioral history of hiding or spending money without your consent.
Discuss with your Toronto divorce lawyer any threats to your family property as quickly as possible. Your lawyer will act swiftly and skillfully to protect your rights and your property.