Calculating family property and equalization payments - Zukerman Law

A Guide to Calculating Family Property and Equalization Payments

Separation is a difficult time, filled with emotional and financial challenges. Dividing family property can be particularly stressful, as you navigate what is fair and how to move forward financially.
When going through a separation, it is important to understand how net family property is divided and equalization payments are made. These legal processes help ensure a fair division of assets accumulated during your marriage.
At Zukerman Law, we understand the complexities involved and are here to guide you through every step. This blog post will provide a clear overview of calculating family property and equalization payments, empowering you to make informed decisions during separation.

What is the Division of Property and Equalization?

What is the Division of Property and Equalization?

The division of property and the equalization process determines the distribution of assets and liabilities between spouses separating or divorcing. Under the current law, each spouse must equally split assets acquired during the marriage or common-law relationship.
This encompasses various possessions, including the family residence, investments, bank accounts, cars, furniture, retirement savings, and other valuable assets.
Liabilities, such as mortgages and debts, are also divided equally unless it can be proven otherwise. The Family Law Act outlines criteria for equalization payments, including staying updated on each spouse’s net family property.

Process for Equalizing Net Family Property

Process for Equalizing Net Family Property

The following six steps aim to help you comprehend how the Family Law Act addresses property matters. It’s a rather complicated procedure that needs legal counsel.

#1 Determine the Value of Each Spouse’s Property at the Valuation Date

Making a list of all of their assets is the first step towards determining property rights under the Family Law Act for each spouse. Personal property, real estate, bank accounts, company stock, and pensions, such as RRSPs, may fall under this category.
A spouse’s property must also be valued as of the separation date, which is typically the day the couple decides to stop living together. Most assets have an easily calculated value when compared to their current fair market value.
However, determining the worth of some assets—like pensions or stock in privately held businesses—can be extremely difficult. You may need the help of both an accountant and a lawyer.
Not every property is taken into account. For instance, assets or money obtained as a gift from someone other than your husband or as an inheritance after marriage are excluded. It is not necessary to add money obtained from life insurance policies or compensation for personal injuries.
Note: Consult a lawyer for specific cases, as there are limitations on the exemptions. Money from these sources may lose the exemption if used to purchase a matrimonial home or pay down a mortgage on a matrimonial home.

#2 Subtract all Debts from the Total Assets as of the Separation Date

Creating a list of all your debts as of the separation date is the next step. If you and your spouse have joint debts, it is advisable to consider half of the debt as your personal responsibility.
Next, you subtract the total amount of debt you owe from the total value of everything you own as of the separation date. This will provide you with the overall property value on the day of your separation from your spouse.

#3 Determine the Value of All Assets that Each Person Brought into the Marriage

Next, you should create a comprehensive list of all your assets and debts on the day of your marriage to your partner. Add up the total value of everything you possessed on the day of your marriage. Remember that “value” refers to the value on the marriage day, not the current value.
Subtract the value of all your debts on the day you were married.

#4 Subtract #3 from #2

It is now possible for you to calculate your net family property. To summarize, you add up the whole value of your possessions on the separation date.
After that, you figure out how much your property was worth, subtract any debts from it on the day you were married, and subtract any debts from the day you and your spouse separated. Your net family property is determined as a result, and it can never be zero or less. In other words, it cannot be a negative number.

#5 Subtract Compensation for Personal Injury, Inheritances, and Proceeds of Life Insurance

When dividing property after separation, there are certain things you can exclude from the calculation of your net worth. This is to ensure a fairer division that reflects the value built together during the marriage. Here’s what you can generally keep out:

  • Gifts and inheritances: Money or property you received from someone other than your spouse during the marriage.
  • Injury compensation: Money you were awarded by a court for a personal injury.
  • Life insurance proceeds: Payouts you received from a life insurance policy.

It’s important to note that there can be exceptions. For instance, if you used money from these sources to buy your family home or pay down the mortgage on it, the exemption might not apply. To be sure about what you can exclude and avoid any confusion, it’s always best to consult with a lawyer. They can help you navigate the specifics of your situation.

#6 Subtract the Lower NFP from the Higher One and Divide the Difference in Half

The Family Law Act requires a spouse with a higher net family property amount to pay the spouse with the lower total half of the difference between them. For instance, if a wife has a net family property of $20,000 and a husband has a net family property of $30,000, the difference between them is $10,000. The husband would have to pay the wife $5,000, as half of $10,000 is $5,000.
The money that the spouse with the higher total has to pay the spouse with the lower total is called an “equalization payment”.


Dividing property after separation can be a complex process, but understanding the concept of net family property and equalization payments is a great first step. Remember, this guide provides a general overview, and every situation has its unique aspects.
For a smooth and fair outcome, consider contacting one of our family lawyers at Zukerman Law Group. They can help you value your assets and debts accurately, navigate any exceptions to the rules, and ensure you receive what you’re entitled to. With professional guidance, you can approach this process with confidence and move forward to the next chapter of your life.


1- How do you calculate equalization?

Each spouse must calculate their individual net family property (NFP). The spouse with the higher NFP then pays the other spouse half of the difference. This is the equalization payment.

2- Does my spouse have any right to my house if I owned it before marriage?

Premarital properties are often not regarded as marital assets and are not subject to equalization. The matrimonial home is an ex-exception to this general rule, though. A home owned by one spouse before marriage that becomes the matrimonial home after marriage will be included as marital property.

3- Can my ex-wife claim my pension years after divorce in Canada?

Benefits under the Canada Pension Plan (CPP) may be split after a year if you separate or are divorced. For every year that you were together, you both received half of the CPP contributions that you made.


Stuart Zukerman

Stuart Zukerman, a graduate of the University of British Columbia, has over 32 years of experience in litigation with a focus on Family Law, Personal Injury, Wrongful Dismissal claims, and Collaborative Divorce & Mediation. He has extensive trial experience in divorce, child custody, spousal support, asset division, and ICBC injury claims. As an accredited Family Law Mediator, he helps resolve disputes without court intervention. Stuart has also authored papers on family law and lectured at CLE courses.