Page 10 - Demo

PROPERTY DIVISION
Excluded property (as distinct from non-excluded property) acquired during cohabitation under the marriage is not part of the property that must be given a dollar value for the purpose of calculating the property payment. It is put to one side and ignored in the calculation. It is property itself that is excluded, not a particular value. Since the property and not just a particular value is excluded, the original value and whether the value has increased or decreased over time is not relevant for division purposes. (However although excluded property is not part of the calculation of the property payment and does not need to be valued for this purpose, it must be valued for support purposes.)
Non-excluded property (Net Family Property) is property acquired during cohabitation under the marriage that is appraised (either informally or formally) and given a dollar value for the purpose of calculating the property payment. As mentioned, the usual division is in equal shares and in these cases the payment is called an equalization payment.
All non-excluded property acquired in the period after the marriage and before the crystallizing events (that is, during cohabitation under the marriage), is valued and the total value for each spouse is used in the calculation of the property payment.
Property in this context is understood in its broadest sense. It is de ned as meaning “any interest, present or future, vested or contingent, in real or personal property.” This includes, among other things, “in the case of spouse’s right under a pension plan that have vested, the spouse’s interest in the plan including contributions made by other persons.” Examples of property items covered by this de nition are real estate, furniture, automobiles, jewelry, case surrender value of insurance policy, interest in trusts, registered retirement savings plan, and pensions.
This non-excluded property used in the calculation of the property payment is given a value and is what is called, “Net Family Property.” A precise de nition of Net Family Property is given in the Family Act as:
• “the value of all the property, except [excluded property] that a spouse owns on the valuation date” less “the spouse’s debts and other liabilities” owing on that date,” after deducting...
• “the value of property, other than a matrimonial home, that the spouse owned on the date of marriage, after deducting the spouses debts and other liabilities, calculated as of the date of marriage.”
A matrimonial home is not excluded from Net Family Property - even if it is acquired by one or both of the spouses by way of gifts or inheritance. And, as is seen from de nition for Net Family Property, if brought into the marriage by one of the spouses; that spouse is not allowed to deduct its value when calculating the property payment. Therefore, (see discussion on marriage contract below) a matrimonial home can be neither excluded nor deducted when calculating the equalization payment.
It is only property owned on two dates that is used to determine a spouse’s Net Family Property. These are the opening date (the date of marriage) of the period cohabitation under the marriage and the closing date (the valuation date). Property acquired and disposed of between these dates is not considered. The peaks and valleys in the spouses’ fortunes in the period between the dates is ignored. For example, a spouse’s fortunes in the period which makes him or her a millionaire, but lose it all on the stock market before the separation is ignored. The million dollars is gone and not counted in calculating the spouse’s Net Family Property.
A spouse may own more non-excluded property in terms of value on the date of marriage than on the valuation date. In this case, his or her Net Family Property is zero.
The usual property payment is an “equalization payment” which brings the levels of the spouse’s Net Family Properties into balance. The amount of the equalization payment is determined by subtracting the lesser
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