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Difference between revisions of "Dividing Property and Debt in Family Law Matters"
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Dividing Property and Debt in Family Law Matters (view source)
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'''Step One''' | '''Step One''' | ||
:To divide property and debt under the ''Family Law Act'', you first have to figure out whether you're a "spouse" as defined by section 3(1)(a) or 3(1)(b)(i). You must either be married or have lived with your partner in a marriage-like relationship for at least two years. | |||
If you're not a spouse, ''stop'' and read the discussion in the introductory section of this chapter, [[Property & Debt in Family Law Matters#Property claims and people who aren't spouses|Property & Debt]], about the property rights of people who aren't spouses. People who don't qualify as spouses are entitled to share in property that they both own, and may have an interest in property only one of them owns under the common law relating to trusts and equity. | :If you're not a spouse, ''stop'' and read the discussion in the introductory section of this chapter, [[Property & Debt in Family Law Matters#Property claims and people who aren't spouses|Property & Debt]], about the property rights of people who aren't spouses. People who don't qualify as spouses are entitled to share in property that they both own, and may have an interest in property only one of them owns under the common law relating to trusts and equity. | ||
'''Step Two''' | '''Step Two''' | ||
:Next you need to look at any ''cohabitation agreement'' or ''marriage agreement'' that you may have signed earlier in your relationship to see whether it talks about property or debt. | |||
If you have an agreement about property, ''stop''. Section 94(2) says that you cannot apply for a division of property if there's a written agreement about property or debt until that agreement is set aside. Accordingly, if you have an agreement about property that you want to vary or set aside, you must seek an order from the court. | :If you have an agreement about property, ''stop''. Section 94(2) says that you cannot apply for a division of property if there's a written agreement about property or debt until that agreement is set aside. Accordingly, if you have an agreement about property that you want to vary or set aside, you must seek an order from the court. | ||
'''Step Three''' | '''Step Three''' | ||
:Next you have to check that you're making your claim within the ''time limits'' set out in section 198(2). Married spouses must bring their claims for the division of property and debt within two years of the date of their divorce or a declaration that their marriage is a nullity; unmarried spouses must bring their claims within two years of the date of their separation. | |||
If you're outside the time limits, ''stop''. Talk to a lawyer to confirm that you're out of time and ask about whether you're within the limitation period to ask for an interest in property under the common law relating to trusts and equity. | :If you're outside the time limits, ''stop''. Talk to a lawyer to confirm that you're out of time and ask about whether you're within the limitation period to ask for an interest in property under the common law relating to trusts and equity. | ||
'''Step Four''' | '''Step Four''' | ||
:Now you have to figure out whether there's ''another court'' somewhere outside of British Columbia that has the authority to make an order affecting you, your spouse, and your property. Most of the time the <span class="noglossary">answer</span> to this question will be no. | |||
However, if: | :However, there may be a problem if: | ||
::*you and your spouse lived somewhere else for a long time, | ::*you and your spouse lived somewhere else for a long time, | ||
::*there is a court action commenced in another jurisdiction seeking the same or similar relief, | ::*there is a court action commenced in another jurisdiction seeking the same or similar relief, | ||
::*you have property outside of the province, or | ::*you have property outside of the province, or | ||
::*you have a cohabitation agreement or a marriage agreement that requires the laws and courts of another place to be used | ::*you have a cohabitation agreement or a marriage agreement that requires the laws and courts of another place to be used. | ||
:The problem is this. If another court can make an order, you then have to figure out under section 106 whether the courts of British Columbia should be dealing with your proceeding at all. | |||
If your case is better dealt with by another court, ''stop'', because you'll need to start a court proceeding there. If not, you can continue here. | :If your case is better dealt with by another court, ''stop'', because you'll need to start a court proceeding there. If not, you can continue here. | ||
'''Step Five''' | '''Step Five''' | ||
:Now you have to start sorting what you have into ''family property'' and ''family debt'', and ''excluded property'' and ''personal debt''. Start from the assumption that everything you have is family property and family debt and then work backwards. | |||
:Property and debt that you got ''after you separated'' is generally the separate property or separate obligation of each spouse, with two main exceptions: | |||
::*property bought after separation with family property is also family property (i.e. if the source of the funds used to buy the property can be traced back to family property), and | ::*property bought after separation with family property is also family property (i.e. if the source of the funds used to buy the property can be traced back to family property), and | ||
::*debt incurred after separation to maintain family property is family debt. | ::*debt incurred after separation to maintain family property is family debt. | ||
:Property you got ''during your relationship'' is generally family property, except for certain kinds of property that are excluded from family property. These include: | |||
::*inheritances, | ::*inheritances, | ||
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::*excluded property which is then gifted by one spouse to the other. | ::*excluded property which is then gifted by one spouse to the other. | ||
:Property that you got ''before your relationship'' is generally excluded property that only you will keep, unless you have gifted it to your spouse. The increase in the value of the property you brought into the relationship is ''family property'' even where the original amount remains excluded. You will likely remain responsible for debt you brought into the relationship. | |||
'''Step Six''' | '''Step Six''' | ||
:Next you need to figure out what everything is worth and where it is. This will be the hard part. | |||
:For ''excluded property'' and ''personal debt'', what you need to know is: | |||
::*What was the value of each asset on the date immediately before you began to live together or got married, whichever came first? | ::*What was the value of each asset on the date immediately before you began to live together or got married, whichever came first? | ||
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::*Have you incurred any new debt after the date of your separation? Did you add to any debts incurred during your relationship after separation? If so, how much new debt have you racked up? | ::*Have you incurred any new debt after the date of your separation? Did you add to any debts incurred during your relationship after separation? If so, how much new debt have you racked up? | ||
:For ''family property'' and ''family debt'', you need to know: | |||
::*What is the value of each asset now? | ::*What is the value of each asset now? | ||
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'''Step Seven''' | '''Step Seven''' | ||
:Now that you've got the numbers worked out, you may want to think about whether an ''equal division'' of family property and family debt would be "significantly unfair," bearing in mind the factors listed in section 95(2), which includes, but is not limited to, the duration of the relationship and whether a spouse, after the date of separation, caused a significant decrease or increase in the value of the family property or family debt beyond market forces. If it wouldn't be significantly unfair, then split the family property and family debt equally and go on with your life. If it would be significantly unfair, then you've got to figure out what a fair split looks like and I wish you the best of luck sorting this out in a speedy manner. | |||
:Finally, you may also want to think about whether there's a reason to share in some or all of the ''excluded property''. Excluded property can be divided if there's property outside of British Columbia that ought to be family property but can't easily be divided, or if it would be "significantly unfair" not to share excluded property, bearing in mind the factors listed in section 96(b). If there's no reason to share excluded property, carry on. If there is a reason to share that property, then you've got to figure out what a fair division looks like. | |||
==Orders for the division of property and debt== | ==Orders for the division of property and debt== | ||
