When a couple divorces it’s never easy on them or their children. Adding to the stress of divorce is how property is divided after the couple has separated and divorced.
While divorced couples could settle these issue by themselves if they agree on how to split their property, in many cases there is a dispute between couples as to who should get what. Even if there is no dispute, couples often follow the provincial/territorial guidelines in regards to how property should be divided.
All provinces and territories have equalization legislation that dictates that family property is to be divided fairly between the spouses. Even though the theory that it’s supposed to be equal division of assets, it’s not always the case.
The concept of property in family law
Usually, and depending on the provincial/territorial law, family property is thought of as possessions used for family purposes.
The term “property” in family law doesn’t just mean real estate. Property encompasses a whole array of the tangible and intangible: the matrimonial home, RRSPs and employment pensions, stocks, bonds and other investments, cars, bank accounts, and more. Even items one may not necessarily think of could be considered family property, such as: a washer, dryer, camping equipment, dishes, etc.
The idea is that the items were used and shared by both spouses.
For example, if just one of the spouses is thought to have owned an item, it will usually be considered family property if:
- It has been ordinarily used or enjoyed by both spouses (and/or their children) while they were living together; and
- It has been used or enjoyed for shelter or transportation for the family, or for household, educational, recreational, social or aesthetic purposes.
There are some things that may not be considered property for the purposes of equalization, including:
- Property acquired by one spouse before the marriage;
- Property one spouse received as a gift;
- Property one spouse received by inheritance and more.
There are also items where it’s not clear whether they are family property or not. Example of that are jewellery and hobby collections. If there is a question as to whether something is or isn’t family property, the court will often decide.
How is property divided between spouses?
Each spouse is entitled to one half of the value of the property that they have accumulated during the marriage.
There are several steps to the process.
The first step is usually, that the value of each spouse’s property is determined at the date of valuation.
Some examples of a date of valuation are, the earliest of:
- The date the spouses separate and there is no reasonable prospect that they will resume cohabitation;
- The date a divorce is granted, etc.,
The next step is that assets are calculated and then debts are subtracted from assets.
Then the value of each asset the person brought into the marriage is determined, followed by subtraction of the date of marriage assets from the valuation date assets for each spouse, after which you will get the net family property amounts for each spouse. The higher NFP is then subtracted from the lower NFP. The difference between the two is divided in half, and the spouse with the higher NFP then will have to pay this amount to the spouse with the lower NFP.
Given how complicated issues surrounding the division of property are, it is advisable that a lawyer be consulted.
Splitting Up The Yukon Law on Separation
Dividing Property at Separation: Married Couples Alberta