There are rules for dividing family property
Sometimes it’s 50/50 and sometimes it isn’t.
Part of separating is dividing what you own between you and your spouse. It can be difficult to figure out who keeps what and how to rebuild your physical world after starting over with less than what you had before.
You and your spouse can divide your family property however you agree to. If you don’t agree, family property division will be decided based on the law. It’s a good idea to know the legal principles that will apply. Provincial legislation governs family property not federal.
The Family Property Act governs the division of your family property, if you and your spouse separated after January 1, 2020, whether you’re married or unmarried and an adult interdependent partner.
If you separated before January 1, 2020:
- The Matrimonial Property Act governs your family property division if you and your spouse marry;
- Common law governs your family property, not a statute, if you and your spouse do not marry.
The law of property division for married couples is very much the same, regardless of when you separated. The law for unmarried spouses changed with the new Family Property Act.
On this page, we talk about the Family Property Act and not the law that applied to spouses who separated before January 1, 2020. Please contact a lawyer to learn more about which law applies to you.
Now, family property law is the same for married and unmarried spouses.
In order for the law of family property division to apply to you, if you did not marry, you and your spouse must meet the criteria for Adult Interdependent Partners.
The Adult Interdependent Relationships Act defines this term. It can be a complex definition. Generally, it means that you and your partner have lived together in a “relationship of interdependence”:
- For at least 3 years, continuously ; or
- For a period of some permanence, if you and your partner have or adopted a child together; or
- As set out in an agreement.
The extent to which you and your partner share one another’s lives, emotional commitment, and function as an economic and domestic unit are factors that determine a “relationship of interdependence.”
Family property includes all your and your spouses assets and liabilities, wherever it’s located.
Assets often includes your home, land, vacations homes, time-share interests, household goods, vehicles, pensions, RRSPs, investments, stocks, bonds, stock options, corporations, contingent interests, gifts, intellectual property, and possibly trust interests. Liabilities often include your mortgage, lines of credit, car loans, credit cards and other debts.
Depending on your circumstances, property acquired after separation may be family property that is divided.
Alberta Courts are somewhat limited in what they can order related to property outside the jurisdiction. They can take its value into account in the division of property held in Alberta but there are limitations.
Presumptively, family property acquired during the relationship, that isn’t exempt, is divided equally.
Presumptively, family property is divided equally, unless it falls within three possible exceptions:
- exempt property,
- growth or other factors; or
- unusual circumstances that justify an unequal division.
There is certain property that you and your spouse do not share the value of.
Family Property that falls within the category of “exempt”, including:
- the property you or your spouse had before you began living together in a relationship of interdependence;
- a gift you received individually from another person (as opposed to a gift that was given to you and your spouse);
- your inheritance; and
- awards for settlement for your individual law suit or insurance claim.
You do not share the value of exempt property at the start of your relationship of interdependence or when you received it, whichever is later.
Whether the property remains exempt depends on what happened with it during the relationship. For example, if you and your spouse hold the asset in joint title, or mixed with joint assets, a portion or all of the exemption may be lost.
The asset also has to continue to exist, although it can be traced if it has changed forms.
For example, if you inherit $30,000 and use those funds to buy a car in your sole name, that car remains exempt. However, if you spent the $30,000 on bills or a trip and none remains, there is no exempt property.
Your and your spouse divide the increase in the value of exempt assets based on what is “just and equitable.”
The value of exempt assets may increase between the time you receive them and your final resolution, based on market growth, interest accumulation, debt paydown and other factors. A Court will consider a number of factors when deciding how to divide this value increase, including the length of the relationship and contribution.
You or your spouse may argue against a legal presumption, in consideration of a number of factors set out in the statute.
In Alberta, the date of the trial or settlement determines the property value.
Although uncommon, property may be valued as of a different day.
You and/or your spouse have the option to hire a experts to help value certain property items. This may include a home appraisal, a business valuation, or a pension valuation. Competing valuations can be complex to resolve.
You and your spouse have to fully disclose all relevant property information.
The law is clear about the obligations of spouses to fully disclose financial and other relevant information related to family property.
This includes common disclosure requirements such as a sworn statement of income, assets and liabilities, bank account and credit card statements, investment statements, business financials, ownership documents, and property transaction documents.
Most spouses agree to voluntarily exchange their disclosure by a certain date, to avoid going to court on this issue. There may be costs or other consequences for not disclosing. Moreover, gathering and organizing your documents early on can help make the disclosure process smoother.
You and your spouse divide your property based on any valid Cohabitation and Prenuptial Agreements.
If you and your spouse entered into a valid Cohabitation or Prenuptial Agreement that dealt with family property division, your family property will be divided based on those Agreements.
A division of property does not mean that everything needs to be sold.
You and your spouse may negotiate for specific things you want to keep. The values of those items will be taken into account when the total value of the property you and your spouse each keep is determined and offset.
You and your spouse need legal advice to finalize your Property Agreement.
Once you and your spouse reach a settlement, it is important to capture it in a written Agreement. In order for a Property Agreement to be legally binding, you and your spouse must obtain independent legal advice and meet certain technical requirements.
There are time limits to apply in Court for property division.
You and your spouse each have two years from your date of separation or divorce to apply to the Court for division of your Family Property. However, if you do not apply within two years, the Court is unable to help you.
Your or your spouse may apply to live in your family home without the other person.
This is called “exclusive home possession”. There are several factors that a court looks at to assess whether or not one spouse may live in the home exclusively, including the availability of other accommodation. It also looks at the financial and other circumstances of the spouses.
There are other property considerations and issues.
You and your spouse may need to plan for the effects of your death on your property and think about how to preserve it until it is divided.
The Family Property Act does not apply to all cohabiting couples.
If the parties are not “adult or former adult interdependent partners”, then a property claim may be based on the theory of “unjust enrichment”. This is a claim based on contribution: direct or indirect. Therefore, in very basic terms, the claim is based on establishing that one party was “enriched”, the other had a “deprivation” and there was no “juristic reason” for this to occur. It also looks at any benefits received by the spouse who is bringing the claim.
Again, there are time limits to bring a claim for property, and failure to do so can mean a potential claim is lost.
Family Property division is a complex area, and the comments on the above page are of a general nature only. Please consult with a lawyer regarding your own specific situation.
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