Property Division
In Alberta, the Family Property Act sets out how to divide property for married and unmarried couples who are adult interdependent partners. If a married couple separated before January 1, 2020, this property division is governed by the Matrimonial Property Act.
Property acquired by either married couples or adult interdependent partners is divided equally. This includes property, whether owned jointly or separately. There may be circumstances where it is considered unjust and inequitable to do so.
Certain property is not marital property. It is considered exempt from matrimonial property distribution. Property before marriage or the start date of the adult interdependent relationship, gifts from third parties, inheritances, tort awards for damages and insurance proceeds fall into this category. This kind of property needs to be identified and traced to today. If it was spent, discarded, consumed, this exempt claim is lost. Income or proceeds from exempt property are treated differently. If exempt property was put into joint property, other rules apply. The law on exemptions is complex.
The valuation date for marital property is date of trial, which in effect means the most current date. Since most people don’t go to trial to settle their property, by agreement they can choose another date to value their assets and debts.
Spouses/partners are required to disclose all of their property. This will mean gathering documents and information about it to establish values. A Statement is prepared which lists their assets, debts and exemptions. Reviewing and being aware of this information is important before signing off on the final Settlement Agreement.
Couples can make their own agreements about their property. There are legal requirements to be able to do so. Before signing their Agreement each spouse/partner must have independent legal advice from their own lawyer. Each must acknowledge in writing before their lawyer that they are aware of the nature and effect of the agreement, their possible future claim to the property which that spouse/partner intends to give up, and that they are executing that agreement voluntarily without compulsion.
There are couples who are cohabiting but neither are married nor adult interdependent partners by legal definition. These common-law couples may have claims to the other’s property if they can establish a claim for “unjust enrichment”. Simply put, one partner gave the other something which benefited that partner to the detriment of the one who gave it. There must be no legal reason for that partner giving it, such as it was a gift or contract. In this case, there are legal remedies. This area of law is complicated. It is much simpler and less expensive if these couples can come to an agreement on how to treat their property in this relationship.
At Peaceable Settlements we can assist you in mediation or collaboration to consider all of your property and agree on dividing it, or it can be settled in arbitration. The terms can be written into a Settlement Agreement or Arbitration Award. When the legal steps are completed, you can rely on it and have peace of mind knowing your property division has been finalized.
Resource:
- Property division guide (PDF) – Centre for Public Legal Education Alberta