When spouses separate in British Columbia, most situations result in family property being divided equally. This applies to both married couples as well as couples that are in “marriage-like relationships”, such as common-law and cohabitating couples.
There are three exceptions to an equal division of family property:
- If there is a pre-existing agreement, such as a Prenuptial Agreement or a Cohabitation Agreement that states otherwise;
- If the couple agrees to an unequal division of family property, usually by way of a Separation Agreement; and
- If the Court finds that dividing family property or debt equally is significantly unfair to one party.
In this blog post, we will expand on the second and third exceptions.
What is Family Property?
Before we discuss the law relating to equal and unequal divisions of property, we will first establish what exactly qualifies as family property.
In most cases, when you make a purchase, that item or property belongs to you. However, in a marriage, this is often not the case.
The reason is that the law seeks to treat the “homemaker” and the “breadwinner” as equals. Giving everything to the ‘breadwinner’, and leaving the ‘homemaker’ with nothing after separation would be extremely unfair.
While the terms “homemaker” and “breadwinner” may sound antiquated, this principle continues to apply to households where one spouse makes significantly more income than the other, and where the other spouse contributes significantly more time to the household.
“Family Property” is everything that you and your spouse had on the day of your separation. This includes both assets and debts, such as: the family home, RRSPs (pension funds), investments, bank accounts, insurance details, pensions, mortgages, credit cards, and income tax.
What am I entitled to in a divorce?
In most cases, you and your spouse will each be entitled to a 50% share of all Family Property.
You will also be entitled to any “Excluded Property” in your name, and your spouse will be entitled to any “Excluded Property” in their name.
“Excluded Property” is anything accumulated before or after your separation, as opposed to “Family Property”, which is accumulated during the relationship.
Common examples of Excluded Property include gifts and inheritance. Put another way, Excluded Property may be anything that was voluntarily given to one person as an individual as opposed to having been given to the married couple togethe
When is equal division of Family Property ‘unfair’?
Nature of the Relationship
The nature, length, and state of your relationship could become factors when the Court decides how your property will be split. For example, when the relationship has only lasted for a short time, there may be exceptions to the 50/50 split rules.
The Court may also consider more complex situations such as when the career pursuits and success of one spouse have been enabled by the other spouse. This may change the balance of the entitlements, as one spouse’s contributions directly helped the other spouse’s individual career.
The Value of Assets and Debt
The financial situation of each party may also be taken into account. The newest laws in British Columbia are centered around treating both spouses as equals, and recognizing the balance of financial and temporal contributions to the household.
The Court may also depart from the usual 50/50 split if the debt will burden one party significantly more than the other. An example is in situations where considerable debt has been acquired, especially when the debt is more than the value of the house.
The Court may also take into consideration situations where the actions of one spouse have caused the value of the house to decrease. For example, if one spouse has caused damage to family property it may be considered unjustified to punish the other party. As such, the Court will weigh the division accordingly.
In most cases after a divorce, the assets and debts that each spouse receives will be split into equal amounts. The above examples are only some of situations which may lead to an unequal yet fair division of Family Property. This division can be achieved through a Separation Agreement drawn up by a lawyer, or by commencing an action in BC Supreme Court.
If you feel that a family property division may be unfair to you, contact us today!