Divide Foreign Property When You Divorce in Ontario

Published on 29 August 2022, 07:22:56 AM

That charming little Sri Lankan guest house your immigrant husband owns is missing from his asset list. Now that you’re divorcing, what’s his is yours. So you’ve heard.  

Foreign Asset Property Rules

You’re right about that. Assets outside Canada are within your legal reach. When you divorce, your spouse must list all their assets, including those in the U.S., Mexico or abroad. 

Equalizing Family Property in Ontario

Ontario couples getting a divorce divide assets equally (called equalization of net family property). Almost all assets acquired while married are shared 50/50. Any increase in value of things you owned before you married is also shared equally. Personal property, real estate, bank accounts, corporate shares and pensions, including RRSPs, qualify. Personal gifts or inheritances may be excluded, as are life insurance payouts or compensation for personal injuries. 

No Equalization for Common-Law Couples

When you have a common-law spouse, you get only what you brought into the marriage or bought together. You may also pursue your spouse for special contributions you made, such as caring for their home and children. You qualify for child or spousal support if you require it and a cohabitation agreement could give you a share of your spouse’s pension. You may even be included in their will.

Uncovering Hidden Assets

Married couples with foreign assets may find a breakup even more overwhelming. The need to report all your property and possessions during divorce requires digging deep to find assets anywhere in the world. While the urge to “forget about” foreign property can be appealing, it’s usually unwise. 

Pensions Divided as Income

For a Turkish couple who broke up after 24 years, divorce got way more expensive after the appeal. The couple married in Turkey in 1980 and moved to Alberta. By the time they separated in 2004, they had nine-year-old triplets and a four-year-old child. The wife got sole custody in 2006, plus $9,500 a month for child support, spousal support and orthodontic bills. The husband was semi-retired, with pension income. The judge treated his pensions as ongoing income for now and investments to be shared 50/50 once he was fully retired. The case could have stopped there.  

Legal Costs Go Up on Appeal

Unhappy about the outcome, the wife appealed. It was a costly decision. Not only did it drive up the couple’s legal fees, but the appeal uncovered apartment units the husband owned in Turkey. He had referred to the properties at the divorce trial, but his statements were not admitted. 

Turkish Delight for Ex-wife

This time, the full story came out. The apartments were valued at $150,000. She got $75,000 under Canada’s Matrimonial Property Act. Since the apartments were in Turkey not Canada, the court couldn’t force their sale. But it could count their value when the couple’s assets were divided.

Non-disclosure is Contempt of Court

The husband had disclosed the apartments, but they got overlooked in the divorce settlement. Good thing he did. As a Canadian wife with Zimbabwe rental property discovered, not disclosing foreign assets is contempt of court. While a Canadian court couldn’t make the wife give up her property, it had legal jurisdiction over whether she disclosed it. Rent is income and just like her Canadian assets, she had to report it, regardless of where the property was. 

Location is No Defence

Locating foreign assets can be a hassle, but it’s your right to have their value included in calculating how your marital property will be divided. The discovery process of your divorce trial reveals what assets you and your spouse have or share. Withholding assets, hiding them or lying about their value is contempt. 

Why Couples Hide Foreign Property

Hiding foreign property can be a mistake or it can be deliberate. Couples who owned assets overseas before they came to Canada may simply forget about their old investments. Finding legal papers can be time consuming. Valuing foreign property can also be tricky. International property is subject to laws and taxes where it is located. Requesting a valuation may require taxes to be paid. Still, all that aside, withholding information can cause legal problems later on.

What to Do About Disclosure

If a spouse is balking at releasing information, you have remedies. Judges can accept an approximate valuation based on similar property here in Canada or require your spouse to hire a foreign appraiser. While countries with strict privacy laws may be a challenge, you can always make a quick trip to check out your spouse’s story and come back with a wealth of riches. When your spouse is withholding foreign assets, an Ontario family lawyer can help you locate the property and value its worth. They’ll arrange a fair agreement before or after you go to court. Now that was definitely worth doing.

Foreign Property Advice for Ontario Couples

Talk to an Axess Law family lawyer in advance if the foreign property is an issue in your divorce. Our virtual family lawyers can advise you on any aspect of foreign asset valuation and property division. Day or evening appointments are available in person or by video call 7 days a week, at times convenient for you. Dial toll-free at 877-522-9377 or in Greater Toronto at 647-479-0118 or use our online booking form. In-person appointments with licensed Ontario lawyers are available at our Ottawa, Toronto, Scarborough, Vaughan, Etobicoke, Mississauga Winston Churchill or Mississauga Heartland law offices.
Click here to learn more about Axess Law’s family law services.