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Accounting for gifts and debts in a Toronto divorce

If you are going through divorce in Toronto, then it is important to know that the division of matrimonial property involves more than totaling up your cash and other assets. To reach a fair settlement, your divorce lawyer and financial advisors should take an in-depth look at your financial portfolio to identify all divisible property, debts and any property that should be excluded from division.

Gifts and significant debts factor into many divorces, requiring careful analysis to calculate a fair equalization payment. In general, gifts and inheritances are not included in the calculation of each spouse’s net family property, which is used to determine who will make the equalization payment and how much the payment will be.

However, a gift is not always a gift. For example, if your spouse received a monetary gift from his or her parents, and the money was invested in the matrimonial home, then that money is no longer a gift. The value of the investment may be divided in the divorce settlement.

Likewise, debts must be identified and calculated. A debt owed by your spouse is generally not your debt — that is, if you didn’t sign for the debt. Elliot Birnhoim, of the Toronto firm Chitiz Pathak LLP, is experienced in locating and valuing debts, as well as hidden assets, which may be in someone else’s name but which truly belong to a spouse going through divorce.

The end of a marriage is an emotional upheaval, and divorcing spouses need someone on their side to protect their interests and focus on negotiating a favourable settlement. Divorcing spouses with property division concerns are encouraged to explore

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