1. What happens if my spouse transfers assets to third parties prior to our separation?

If a spouse transfers assets to a relative, friend, corporation, trust, or other third party before

separation, the key issues are usually:

 whether the transfer was legitimate;

 whether fair market value was received;

 whether the transfer was intended to defeat the other spouse’s equalization claim;

 whether the asset should still be treated as part of the transferring spouse’s net family

property; and

 whether the court should make an unequal equalization order.

Ontario equalization is based on each spouse’s net family property, generally calculated by

valuing property owned on the valuation date, subtracting debts, and deducting certain marriage-

date property. If a spouse intentionally depletes property or acts in bad faith, the court may order

more or less than the usual equalization amount where equal sharing would be unconscionable.

Possible remedies may include:

 financial disclosure orders;

 tracing of funds;

 preservation orders;

 injunctions or restraining orders against further depletion;

 forensic accounting;

 setting aside improper transactions in appropriate cases;

 an unequal division claim under the Family Law Act; and

 costs consequences.