Property Division for Divorcing Couples
Canadian law regards marriage as an equal partnership. Regardless of whether a spouse is the primary breadwinner or makes a lower income than their husband or wife, their contribution to the union is considered equal to their partner’s.
One of the most challenging parts of divorce is determining how to divide property. Unfortunately, divorce can trigger feelings of uncertainty and insecurity. Couples may attempt to regain a sense of control by attaching exaggerated importance to matrimonial assets, often creating emotional battlegrounds, especially over items that hold emotional value.
Whether you are legally married or in an “adult interdependent relationship,” also known as a common-law relationship, the property division during a divorce proceeding in Alberta is governed by the province’s Family Property Act.
How is Shared Property Divided?
Family property is typically divided into three main categories:
- Property that will not be divided
- Property that may be divided unequally
- Property that will be divided equally
Property that will not be divided might include items owned before the marriage, a direct gift from a third party, or an award or settlement from an insurance claim not related to property (e.g., accident benefits after a motor vehicle collision, disability benefits, etc.)
Property might be divided unequally in certain nuanced situations where one spouse believes they should be fairly entitled to a larger share than their partner. For example, if the value of a shared property has increased due to the sustained efforts of one party, they may believe they should be entitled to a larger share. A judge will determine what is fair based on a variety of factors, including:
- The roles and contributions of the spouse during the relationship
- The length of the relationship
- Any pre-existing agreements or prior court orders
- The income, earning capacity, liabilities, obligations, and resources of the spouse
- And possibly more
Property that is usually divided equally typically includes significant assets and debts that came to be owned during the marriage. These can include:
- Real estate, vehicles, furniture, and other personal items or collections of value
- Investments, insurance policies, and pensions
- Business interests
- And possibly more
A couple's shared property can also include debts incurred during the marriage. These might include credit card debts, unpaid loans, mortgages, lines of credit, overdrafts, and other financial obligations.
Division of property can be particularly challenging .Sometimes, a judge can order the sale or transfer of one spouse’s assets to the other.
The first step in the property division process is to make a detailed list of all shared assets and debts, including what was owned before, during, and after the separation. This information must be shared via a Disclosure Statement. Spouses can also file a Notice to Disclose application if their partner has not provided their requisite information.
Certain items may need to be valued or appraised if spouses are unsure of or cannot agree on their worth. To do so, they might consider how much a particular item would cost to replace or make a market comparison to assess the value of similar items. Couples and their lawyers may wish to hire expert appraisers to determine the worth of property whose value might change over time, such as business interests or collectible items.
Protecting Your Property
If you suspect your spouse may not behave reasonably in your divorce proceedings and might sell or try to hide shared property without your knowledge, consider taking steps to protect what’s yours. You may wish to update your passwords, ensure all future bank and credit transactions require both your signature and your spouse’s, and update any beneficiaries to your estate.
Contact Verhaeghe Family Lawyers Today
* Please note that the information in this article is not intended as legal advice but rather as a general overview of family law. If you are seeking legal advice, please consult with a lawyer.