Almost every settlement letter eventually points at one number — the amount one spouse is supposed to pay the other — but that number is the output of a formula, not a starting point, and understanding the formula changes how you read every offer that follows.
The phrase people hear is '50/50,' but in most Canadian provinces the math doesn't touch on individual assets one at a time. Instead, each spouse's net family property is calculated — everything they own, minus what they owe, minus certain excluded amounts — and then the two totals are compared. The spouse with the higher net figure typically owes the other roughly half of the gap between them. That payment is what people mean by 'equalization.' The house, the car, and the pension don't each get cut in two; the overall balance sheets get evened out, and how each spouse actually keeps or divides individual property is a separate negotiation layered on top.
This distinction matters because it explains why a letter can propose one spouse 'keeping' the house and 'keeping' most of an RRSP and still call the deal fair — the equalization payment is doing the balancing in the background. If a letter's numbers don't seem to add up, the first question is usually whether you're looking at the same net family property figures the other side used.
Every equalization figure rests on three moving pieces for each spouse: the value of what they own on the relevant date, the debts they owe on that date, and any property that gets excluded from the calculation entirely — commonly things brought into the relationship, inheritances, and gifts from third parties, though the exact exclusion list is set by each province's family property legislation. Subtract debts and exclusions from total assets, and what's left is that spouse's net family property.
The date those values get pinned to — the 'valuation date' — is its own fight in many files. Some provinces default to the date of separation, others to the date of trial or settlement, and a few allow the spouses to agree on a different date entirely. Because property values move over time, a letter that quietly assumes one valuation date over another isn't a neutral drafting choice — it can meaningfully change both net figures before a single asset is discussed.
Exclusions carry their own math problem: it's rarely enough to claim money was inherited or brought in — the exclusion generally has to be traced to something the spouse still owns. Money that went into a joint account, a renovation, or a shared investment can lose its excluded status if the paper trail doesn't survive the years in between.
Say Spouse A's net family property, after debts and exclusions, comes out higher than Spouse B's. Call the difference between the two figures 'the gap.' In the equalization approach used in several provinces, Spouse A owes Spouse B roughly half of that gap — the payment that closes the distance between the two balance sheets. Everything upstream of that single subtraction is where the real disagreement usually lives: which valuation date was used, whether an inheritance was properly excluded and traced, whether a pension was valued using a proper actuarial approach rather than a rough estimate, and whether debts (a line of credit, a tax liability, a business loan) were assigned to the right side of the ledger.
This is also why two lawyers can look at the same house, the same pension, and the same bank statements and arrive at meaningfully different equalization figures — they're not disagreeing about the formula, they're disagreeing about the inputs that go into it. When a letter states a number without showing its net family property work, that's the part worth asking for.
A handful of categories generate most of the disputes: pensions, which usually need a formal valuation rather than a statement balance; businesses and corporations, where value depends on assumptions a specific valuator has to make; excluded property that wasn't kept separate enough to trace cleanly; and the valuation date itself, especially when property values have moved a lot since separation. None of these are exotic — they show up in an ordinary file, and each one is a place where a letter's proposed number can shift depending on which position you accept.
Support calculations run on a different, more standardized formula tied to income, and are generally handled separately from the property equalization math — it's worth keeping the two straight when a letter bundles both into one settlement figure.
The formula itself is simple subtraction. What makes settlement math hard in practice is that every input — an asset value, a debt balance, a claimed exclusion, a valuation date — arrives buried in a letter, an attachment, or a verbal conversation, weeks or months before anyone sits down to calculate anything. The letter that first proposed a particular valuation date, the email that first mentioned an inheritance, the statement that first valued the pension — those are the documents an equalization dispute eventually turns on.
This is the gap SortMyDivorce is built to close: it reads your letters and pulls out the dates, positions, and figures that end up feeding the math, organized with the exact quote behind each one, so nothing you'll need later is buried in an inbox. A dedicated settlement calculator that walks through this equalization math using your own organized numbers is coming next.
Generally no. Courts typically compare each spouse's net family property (assets minus debts minus exclusions) and have the higher side pay roughly half the difference — individual assets are usually divided separately by agreement, not automatically split in two.
It's the date used to value property for the calculation — commonly separation or settlement/trial, depending on the province. Because asset values move over time, the chosen date can meaningfully change both spouses' net figures, so confirm which date a proposal is actually using.
They're often excludable, but generally only if they can be traced to something the spouse still owns — money that got mixed into joint accounts or shared property can lose that protection. Confirm the specifics with a local family lawyer.
SortMyDivorce turns your legal letters into one organized case, with every date, position, and figure quoted straight from the source — the exact inputs an equalization calculation depends on. A built-in settlement calculator that runs the math on your organized numbers is coming soon. $39/year.
This guide is general information, not legal advice. Laws change and differ by jurisdiction — confirm specifics with a local family lawyer or your court's official website. If you use SortMyDivorce, your letters stay confidential — never shared, never sold.