Determining How To Divide Assets In A Divorce
The division of assets is often the most technically complex issue that arises when a couple who are married or in an adult interdependent partnership separates or divorces. Even determining how to assign a value to certain assets can be a complicated process. You don't have to figure it out alone! Our Edmonton family law lawyers can answer any questions you have about determining how to divide assets in a divorce.
General Asset Division Regime
The Family Property Act governs the division of assets after the separation of a couple who were married or in an adult interdependent partnership. In general, the value of property that is acquired by a couple during the relationship is divided equally between them. Similarly, they will be equally responsible for debt that is acquired during the relationship.
Some property is exempt from division, including:
- - Gifts received by one party.
- - Inheritances received by one party.
- - Property that one party owned before the beginning of the relationship.
- - Awards from a personal injury claim or insurance proceeds, in some cases.
Some property may be divided unequally, depending on what is considered fair in the circumstances. The most straight-forward example of this is when an asset owned prior to the relationship increases in value during the relationship. This increase in value may be divided equally or unequally, depending on the reasons for its increase, the length of the relationship, the financial circumstances of both parties, or other reasons the court considers relevant.
Prenuptial and Marriage Contracts
If a separating couple has a valid prenuptial or marriage agreement that deals with division of property, the procedure set out in the agreement will govern the division of property after the separation or divorce.
How to Divide Property
The first step is to identify all the property you own. Make a list of any property in your name or in your name jointly with anyone else. Property includes:
- - Real estate
- - Business interests
- - Personal property such as furniture and artwork
- - Bank accounts
- - Investments
- - RRSPs
- - Pensions
- - Vehicles
Don't forget to list your debts as well. Credit card debt, mortgages or lines of credit, and any other loans, should be listed.
The next step is to assign a value to every item on your list. Some assets, such as real property and businesses, may require the assistance of a professional to value. Then, divide the list into property that is to be divided and exempt property. Also make note of any property that you think should not be divided equally.
The last step is to divide the value of the property.
Complications can arise in this process when:
- - Documents required to value property are in the hands of the other party.
- - The parties disagree with respect to the value assigned to property.
- - The parties disagree about which property is exempt or how to divide property that is subject to unequal division.
- - The parties disagree about who will retain certain property, whether it will be sold, or how it will be sold.
- - The parties disagree about whether they have a valid prenuptial or marriage agreement that governs the division of property.
Contact Our Edmonton Family Law Lawyers Today for a Consultation
Separation, including divorce, is often a highly emotional process, and disagreements about the division of assets are common. In situations where the division of property becomes complicated, the help of a family law professional may help to lend clarity to the process. At Verhaeghe Law, our team of dedicated family lawyers would be happy to address any questions you may have. For professional help determining how to divide assets in a divorce, contact us to schedule a consultation today.
*Please be advised, this article does not constitute legal advice, but is intended as a general overview of a legal topic. For legal advice, please contact an Edmonton family lawyer.