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Difference between revisions of "Property and Debt in Family Law Matters"
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Property and Debt in Family Law Matters (view source)
Revision as of 22:40, 20 March 2013
, 22:40, 20 March 2013→Dividing Property and Debt under the Family Law Act
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In other words, to separate one spouse must announce the end of the relationship and then take steps which would demonstrate an intention to end the relationship. Separation is discussed in more detail in the _________ page. | In other words, to separate one spouse must announce the end of the relationship and then take steps which would demonstrate an intention to end the relationship. Separation is discussed in more detail in the _________ page. | ||
===Property Brought Into the Relationship=== | ===Property and Debt Brought Into the Relationship=== | ||
For most couples, property brought into a relationship will form the largest component of a spouse's | Under s. 85(1)(a), property that was brought into a relationship is excluded from the pool of family property that is supposed to be divided equally between spouses. Under s. 96, the court "must not" order a division of excluded property, except in limited circumstances. A spouse is therefore entitled to keep the excluded property he or she owns. Under s. 85(2), however, it is up to the person who's saying that property is excluded property to prove that the property is excluded property. | ||
For most couples, property brought into a relationship will form the largest component of a spouse's excluded property. However, when most people marry or move in to live together counting up their assets is not the foremost thing on their mind. This means that you may wind up having to do some historical accounting to figure out what you had one, two or more years ago. Whether you're just starting a relationship or are trying to figure out what you once had, these are the documents you need to look for: | |||
#bank statements for the period which includes the date you began to live together or got married, whichever came first; | #bank statements for the period which includes the date you began to live together or got married, whichever came first; | ||
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It will be a harder to look back in time to figure out the value of things like cars, motorcycles, trailers, boats, snowmobiles and so on. If you're entering a relationship now, it will be helpful to look up the Canadian Black Book or Kelly Blue Book Canada estimated values for vehicles. Boats and trailers may need to be specially valued by a dealer. | It will be a harder to look back in time to figure out the value of things like cars, motorcycles, trailers, boats, snowmobiles and so on. If you're entering a relationship now, it will be helpful to look up the Canadian Black Book or Kelly Blue Book Canada estimated values for vehicles. Boats and trailers may need to be specially valued by a dealer. | ||
===Property Acquired During the Relationship=== | ===Property and Debt Acquired During the Relationship=== | ||
In most circumstances, the property either or both spouses acquire during their relationship will be family property, but there are some important exceptions. | In most circumstances, the property either or both spouses acquire during their relationship will be family property, but there are some important exceptions. | ||
===Family Property=== | |||
Under s. 84(1) of the ''Family Law Act'', family property is the property owned by one or both spouses on the date of their separation, including any property bought after separation with family property. Section 84(2) give some examples of specific assets that are family property, including: | Under s. 84(1) of the ''Family Law Act'', family property is the property owned by one or both spouses on the date of their separation, including any property bought after separation with family property. Section 84(2) give some examples of specific assets that are family property, including: | ||
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#bank accounts, savings, pensions and RRSPs. | #bank accounts, savings, pensions and RRSPs. | ||
Family property also includes the amount any excluded grows in value after the date the spouses' relationship began or after the excluded property was acquired, whichever is later. | Family property also includes the amount any excluded grows in value after the date the spouses' relationship began or after the excluded property was acquired, whichever is later. | ||
Under s. 81, family property is presumed to be shared between the spouses equally, regardless of their use or contribution to that property. | |||
====Excluded Property==== | ====Excluded Property==== | ||
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#property held in trust, providing that the spouse didn't put the property into the trust. | #property held in trust, providing that the spouse didn't put the property into the trust. | ||
===Dividing Property: An Example=== | Excluded property that is acquired during a relationship is presumed to remain the property of the spouse who owns it. However, under s. 85(2), it is up to the person who's saying that property is excluded property to prove that the property is excluded property. | ||
====Family Debt==== | |||
Under s. 86, family debt is all debt incurred by either or both spouses during their relationship up to the date of their separation, but can include debt incurred after separation if the debt was incurred to maintain family property, like a loan taken out to pay the property taxes. | |||
This definition means that debt incurred by a spouse before the spouses married or began to live together is that spouse's personal debt; it's only the new debt that they share. Under s. 81, responsibility for family debt is presumed to be shared between the spouses equally, regardless of their use or contribution to that debt. | |||
===Dividing Property and Debt: An Example=== | |||
Let's look at an example to make things a bit easier to understand. | |||
<blockquote>Harkamal moved in to live with Baljinder in his home in 2009, when Baljinder's home was worth $300,000; Baljinder has no mortgage.</blockquote> | |||
<blockquote>Harkamal starts going to college in 2010 and because she's not working, she takes a personal loan to help pay for her tuition fees, lab fees and textbook costs. Baljinder keeps working while Harkamal is at school, and with his income, he pays for the property takes, car insurance, utilities and groceries and so forth. He's also able to put some money away into RRSPs.</blockquote> | |||
<blockquote>Harkamal and Baljinder separate in 2013. When they separate, Harkamal owes $12,000 for her personal loan, Baljinder's house is worth $400,000 and Baljinder has put saved $30,000 in RRSPs.</blockquote> | |||
In this example, Baljinder's house is his excluded property. It was worth $300,000 when Harkamal began living with him, and it has increased in value by $100,000. | |||
The family property is the RRSPs that Baljinder saved, plus the increase in value of Baljinder's house during the relationship. | |||
The family debt is Harkamal's loan which was incurred entirely during the parties' relationship and is now up to $12,000. | |||
Baljinder would get: | |||
#$300,000 as the value of the home he brought into the relationship; | |||
#$50,000 for one-half of the growth in the value of his house to the date of separation; | |||
#RRSPs worth $15,000; and, | |||
#responsibility for $6,000 of Harkamal's loan. | |||
Harkamal would get: | |||
#$50,000 for one-half of the growth in the value of Baljinder's house; | |||
#RRSPs worth $15,000; and, | |||
#responsibility for the remaining $6,000 of her loan. | |||
==non-spouses== | ==non-spouses== | ||
