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Property Division Rules for Divorces and Separations

The current Family Law Act enacted in 2013 in British Columbia set up new rules for property division in divorces and separations. Courts are now directed to divide family property equally. Family property is everything a couple owns or owes on the date of separation, with certain exceptions. Jointly and separately owned property are included as family property, again with certain exceptions.

Property one of you owned before you got married or entered a common-law relationship isn’t included as family property. This is called excluded property. That means you don’t split the value of it equally if you separate or divorce. However, if the property increases in value while you live together, the increase is considered family property. You must divide the increased value.

So, for example you owned a house when you started living together. Your spouse wouldn’t be entitled to an equal share of the house’s total value after you separate, but your spouse would be entitled to half of the increase in the house’s value since you started living together.

Excluded property also includes property bought with excluded property. For example, if you owned a condominium before you got married and sold it to buy the family home after you got married, you can “trace” the value of the excluded property (the condominium) that went towards the new family property. You don’t have to share this portion.

Some assets acquired during the relationship like individual inheritances and gifts are the property of one spouse and not subject to division.

Debts are treated like assets during property division. Joint and separate debts are divided equally between married and common-law spouses. Post-separation debt related to the care of family property is also divisible.

The division of family property must occur within prescribed time limits. For married spouses, the deadline to apply for property division falls within a two year window following divorce. For unmarried spouses, a separation date begins the two year count down.

Equal division is the standard, but there are instances when courts divide family property unequally if it would be significantly unfair not to do so. A court will review the history of the relationship and the couple’s finances to determine whether equal division is also fair. Some considerations may be length of marriage, the source of family debt, or a spouse’s individual contributions toward a partner’s career. The standard to meet the definition of “significantly unfair” is quite high and it is advisable to get legal advice in this regard.

 

This article is for general information only and is not legal advice.