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Difference between revisions of "Assets of Couples (3:IX)"

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Assets of Couples (3:IX) (view source)

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Section 81 of the ''FLA'' outlines that each spouse is entitled to an undivided, one half interest of family property and is equally responsible for debt upon separation (''Stonehouse v Stonehouse'', 2014 BCSC 1057; ''Joffres v Joffres'', 2014 BCSC 1778). However, the ''FLA'' substantially changes what is considered to be family property, essentially allowing spouses to keep property they bring into a relationship and share only in the increase in value of that property and the net value of new property obtained after cohabitation.   
Section 81 of the ''FLA'' outlines that each spouse is entitled to an undivided, one half interest of family property and is equally responsible for debt upon separation (''Stonehouse v Stonehouse'', 2014 BCSC 1057; ''Joffres v Joffres'', 2014 BCSC 1778). However, the ''FLA'' substantially changes what is considered to be family property, essentially allowing spouses to keep property they bring into a relationship and share only in the increase in value of that property and the net value of new property obtained after cohabitation.   


The ''FLA'' carves out a category of excluded property under section 85. Excluded property is property that may have been included as part of the family assets under the functional test of the FRA: whether it was “ordinarily used” for a “family purpose”. A spouse has no right to property that is not used for a family purpose (''Remmem v Remmem'', 2014 BCSC 1552). Section 85 (1) of the ''FLA'' excludes property acquired by a spouse before the relationship between spouses began (''Cabezas v Maxim'', 2014 BCSC 767), gifts or inheritances to a spouse (''Thomson v Young'', 2014 BCSC 799), settlement of award of damages to a spouse as compensation for an injury or loss (unless for both spouses or to compensate for lost income of a spouse), and money paid under an insurance policy other than for property or loss of income. Any increases in the value of the excluded property that occur during therelationship are considered family property and are not excluded from division. Property that fits intothe above categories that is held in trust for the benefit of a spouse and property derived from property or the disposition of property of the above categories is also included in excluded property.The spouse claiming that the property in question qualifies as excluded property is responsible for demonstrating that it is (''Bressette v Henderson'', 2013 BCSC 1661). 
The ''FLA'' carves out a category of excluded property under section 85.  


This property division regime applies to all married spouses as well as all unmarried common law spouses who have lived in a marriage-like relationship for at least two years. The date of separation will be the relevant date used to identify the pool of family property to be divided (there is no longer a reference to a “triggering event”). However, it is the date of the hearing or agreement which determines the date of valuation of property. Spouses may choose to opt out of these property division rules but must make these different arrangements through an agreement.
Section 85 (1) of the FLA reads as follows:


Family property, defined at s 84, is all property owned by either or both spouses, acquired by one of both spouses after the date of cohabitation other than by disposition of excluded assets.
''The following is excluded from family property:
 
(a) property acquired by a spouse before the relationship between the spouses began;
(b) inheritances to a spouse;
(b.1) gifts to a spouse from a third party;
(c) a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for
* (i) loss to both spouses, or
* (ii) lost income of a spouse;
(d) money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for
* (i) loss to both spouses, or
* (ii) lost income of a spouse;
(e) property referred to in any of paragraphs (a) to (d) that is held in trust for the benefit of a spouse;
(f) a spouse's beneficial interest in property held in a discretionary trust
(i) to which the spouse did not contribute, and
(ii) that is settled by a person other than the spouse;
(g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).''
 
Any increases in the value of the excluded property that occur during the relationship are considered family property and are not excluded from division. The spouse claiming that the property in question qualifies as excluded property is responsible for demonstrating that it fits the definition under s 85(1) (''Bressette v Henderson'', 2013 BCSC 1661).
 
This property division regime applies to all married spouses as well as all unmarried common law spouses who have lived in a marriage-like relationship for at least two years. The date of separation will be the relevant date used to identify the pool of family property to be divided. However, it is the date of the hearing or agreement which determines the date of valuation of property. Spouses may choose to opt out of these property division rules but must make these different arrangements through an agreement.
 
Family property is defined at s 84(1):
 
''(a) on the date the spouses separate,
* (i) property that is owned by at least one spouse, or
* (ii) a beneficial interest of at least one spouse in property;
(b) after separation,
* (i) property acquired by at least one spouse if the property is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either, or
* (ii) a beneficial interest acquired by at least one spouse in property if the beneficial interest is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either.''


== C. Types of Assets ==
== C. Types of Assets ==
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