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Difference between revisions of "Basic Principles of Property and Debt in Family Law"
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Basic Principles of Property and Debt in Family Law (view source)
Revision as of 19:18, 26 March 2013
, 19:18, 26 March 2013→Excluded Property
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<blockquote><blockquote><blockquote><tt>(iii) that is settled by a person other than the spouse; </tt></blockquote></blockquote></blockquote> | <blockquote><blockquote><blockquote><tt>(iii) that is settled by a person other than the spouse; </tt></blockquote></blockquote></blockquote> | ||
<blockquote><blockquote><tt>(g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).</tt></blockquote></blockquote> | <blockquote><blockquote><tt>(g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).</tt></blockquote></blockquote> | ||
To boil all this down, a spouse's excluded property is all property that the spouse owns on the date of cohabitation or the date of marriage, whichever is earlier. Other property acquired during the relationship can also be a spouse's excluded property, including: | |||
#gifts; | |||
#inheritances; | |||
#court awards; | |||
#insurance payments; and, | |||
#property held in a trust that was contributed by someone else. | |||
Perhaps most importantly, under s. 85(1)(g), excluded property includes property bought during the relationship with excluded property. Say, for example, that a spouse receives an inheritance of $10,000 and buys a collection of vintage Pyrex. The Pyrex collection would be spouse's excluded property because is bought with excluded property, even if the Pyrex collection was used in the day-to-day course of the couple's life together. Remember, whether something was "ordinarily used for a family purpose" is not a consideration under the ''Family Law Act''. | |||
====Taking Stock at the Beginning of a Relationship==== | |||
As you can see, it's rather important to know what you owned when you and your spouse began to live together. If you are just starting a relationship, here's what you do. Gather the documents listed below for the period which spans the date on which you and your spouse began to live together or got married, whichever is earlier: | |||
#statements for all financial accounts, including savings accounts, investment accounts, RRSP accounts and other retirement savings accounts; | |||
#statements for any workplace pension plans | |||
#statements for all credit accounts, including credit cards, loans, mortgages and lines of credit; | |||
#your personal income tax return, complete with all of the schedules and attachments; | |||
#your BC Assessments for all real property, or, if you want to be more accurate than that, proper appraisals; | |||
#black book or dealer quotes for any vehicles you own; and, | |||
#anything else that can | |||
Once you've gathered these documents, staple them together and keep them together in some place that you're not likely to lose them, like a safety deposit box. | |||
You should still be able to gather much the same collection of documents even if you've already been married or living together for some time. Banks and other financial institutions will give you copies of old statements, but there will be a charge; pension plan administrators should be able to provide old values; and, BC Assessments for past years are available online. You may, however, have a problem valuing old vehicles, especially ones that you've sold. | |||
====Keeping Track During a Relationship==== | |||
It's also important that you keep track of new excluded property acquired during your relationship and what's going on with the excluded property you brought into the relationship. It may be easiest to keep a journal that: | |||
#shows the dates and amounts of any inheritances, gifts, court awards and insurance proceeds received during the relationship; | |||
#tracks money received from the sale of excluded property, and what you did with the money, particularly if the money was pooled with your spouse's money to buy something; | |||
#tracks property bought in exchange for excluded property; and, | |||
#records any changes in the value of excluded property during the relationship. | |||
Remember, under s. 85(2) its up to the person claiming that property is excluded property to prove it. | |||
==Cohabitation Agreements and Marriage Agreements== | |||
''Cohabitation agreements'' are agreements signed by people who will be or are living together, who may or may not wind up getting married later on down the road. ''Marriage agreements'' are signed by people who will be getting or are married. Although there's no reason why these agreements can't be signed well into a relationship, they're usually signed at or shortly after the date the parties begin to live together or marry. | |||
These agreements are often used to say how property and debt will be handled during a relationship and in the event the parties separate and, under s. 93(1) of the ''Family Law Act'', they must be in writing and be signed by each spouse in the presence of at least one other person as witness. | |||
However, since many people are content with the basic plan for the division of property set out in the ''Family Law Act'', the question is often about what a cohabitation agreement or a marriage agreement can do that would be better than the division the act expects. Here are some ideas. An agreement could: | |||
#allow a spouse to keep not just his or her excluded property but the growth in value of his or her excluded property; | |||
#say that there will be no shared family property except for property that is registered in both spouses' names or which the parties agree in writing will be shared family property; | |||
#give a share of a spouse's excluded property to the other spouse, including a share which increases over time; | |||
#make all excluded property shareable family property; | |||
#say how property bought during the relationship will be owned if it's bought with both spouse's excluded property; or, | |||
#say what will happen if a spouse's excluded property decreases in value during the relationship. | |||
I'm sure there are options as well. | |||
==Cohabitation Agreements and Marriage Agreements== | ==Cohabitation Agreements and Marriage Agreements== | ||
