Property and Debt in Family Law Matters

Under the provincial Family Law Act, each spouse is presumed to keep what he or she brought into their relationship and to share in the things they acquire during their relationship. The same rules apply about debt; spouses are presumed to share responsibility for the debts that accumulated during their relationship. The federal Divorce Act doesn't talk about the division of property or debt.

This page provides an introduction to the division of property and debt between spouses and how the property rules of the Family Law Act are different from the "Family Relations Act, the rules about property that apply to couples who are not spouses, and some of the income tax issues that can come up when dividing property. The pages that follow will go into the rules about the division of property and debt in a lot more detail.

Dividing Property and Debt under the Family Law Act

The parts of the Family Law Act about the division of property and debt apply to people who are spouses. The definition of spouse for these parts of the act are a bit different from the rest of the act. For the division of property and debt, a spouse is:

1. someone who is married or was married to someone else; or,
2. someone who is or was living in a "marriage-like relationship" with someone else for at least two years.

People who lived together for less than two years are not spouses for these parts of the Family Law Act, whether they've had a child together or not.

Property and debt can be divided under the terms of a cohabitation agreement or a marriage agreement that the spouses made around the time they began to live together, or under the terms of a separation agreement that they made around the time they separated. If the spouses can't reach an agreement, a court can make an order about the division of property and debt.

Court proceedings for the division of property and debt must be started within two years of:

1. the date of divorce or annulment for married spouses; or,
2. the date of separation for unmarried spouses.

=Family Property, Excluded Property and Family Debt

The Family Law Act talks about three things when it comes to dividing property and debt, family property, excluded property and family debt.

All property owned by either or both spouses at the date of separation is family property. This includes things like real property, bank accounts, pensions, business, debts owing to a spouse and so forth. Family property is presumed to be shared equally between spouses, regardless of their use of or contribution to that property.

Excluded property is any property that is excluded from the pool of family property to be split between spouses. This includes the property a spouse acquired before the date of marriage or the date the spouses began living together, whichever is earlier, plus certain property acquired during the spouses' relationship, including:

1. property bought with the property brought into the relationship;
2. inheritances and gifts; and,
3. some kinds of insurance proceeds and court awards.

Excluded property is presumed to remain the property of the spouse who owns it.

All debt incurred by either or both spouses from the date of marriage or the date the spouses began living together, whichever is earlier, to the date of separation is family debt. Responsibility for family debt is presumed to be shared equally between spouses, regardless of their use of or contribution to that debt.

Beginning and Ending a Spousal Relationship

As you can see, certain dates in a couple's relationship are really important. The date a relationship begins, the earlier of the date the spouses marry or begin to live together, is the date separating the excluded property brought into the relationship from the family property acquired during their relationship and the date when the being to share responsibility for new debts. The date the spouses separate, generally speaking, marks the end of the accumulation of shared property and shared debt.

Becoming Spouses

Under s. 3(3) of the Family Law Act, a relationship between spouses begins

... on the earlier of the following:

(a) the date on which they began to live together in a marriage-like relationship;

(b) the date of their marriage.

Since the definition of spouse at s. 3(1)(b)(i) includes people who have lived together "for a continuous period of at least 2 years", once you have reached the two-year mark, you are a spouse and your relationship as spouses began two years earlier.

Separating

Although a married couple are married until they get a divorce, the key date for the division of property and debt under the Family Law Act is the date of separation.

spouses become, effective as of

Further Reading in this Chapter

• bulleted list of other pages in this chapter, linked

Page Resources and Links

Legislation

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Family Law Act, Divorce Act, Constutution Act 1867 at least

Links

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